Originally posted by dadudemon
With a pay increase to 18 an hour, I honestly think he doesn't know what is income looks like. I previously had a huge response typed up but decided not to go into details.Suffice it to say, 13.xx an hour will be the tipping point for QSR (quick service retail) at a busy store. 11.xx is the tipping point for a normal store.
Margins are determined by pricing, of course, and pricing can be determined by franchise owners. So perhaps 18 an hour is okay if they are charging $12 for a standard chicken sandwich. But even in Oklahoma, where they are $7, I cannot see them getting away with a $12 sandwich.
I doubt he's going to up the prices of the items more than 10%, if at all.
Still, my point was that unless it's a new store, he knows how much he takes in (average) per month compared to how much he spends on payroll (average), as fastfood restaurants are fairly stable month-to-month in terms of income and costs, unlike small independent restaurants which can fluctuate.
So unless he's a moron, he already knows how much the wage increase is going to cost him/bite into his overhead. Can't imagine he didn't crunch the numbers with his accountant first before doing this. Again, this is all on the premise that he's not a complete moron and knows the costs before implementing.