Service economy differentiates itself on a multitude of dimensions, of which price is just one. By that notion McDonald's should've driven everyone out of business because who's going to buy a $5 or $7 or $10 burger when a $1 cheeseburger is available? Gas station coffee or vending machine coffee should've destroyed all other coffee businesses, as what fool would pay $4.50 for a cup of coffee when a 50c cup is available at the corner 7-11?
You'll have different segments indeed. Say we keep it simple and you got two: a luxury one and one for the (poor) masses. Most people won't be able to afford the luxury one, so they'll grab the cheap one. (The cheapest one is still either not drinking coffee at all, drink it at a place where its free ie. at work, or bringing your own coffee in a vacuum can.)
Generally (the exception being catering to travellers such as a drive-in near a highway) you won't see a McDs in a rich neighbourhood, and you won't see a luxury restaurant in a poor neighbourhood. Neither the customers nor the workers live nearby.
Also, don't forget people are loyal to brands.
As a final note, I'd be rather interested to see which local brands have disappeared over the years, if that can be attributed to fast food businesses such as McD's.
As for you not buying the view, that is exactly what was being described in the link with first hand experience from a taxi driver in The Netherlands (heavily regulated market by law) which I posted elsewhere [1].
[1] http://www.taxibelangen.nl/ervaringen-ex-uber-chauffeur/
see this post for example with programmers : https://news.ycombinator.com/item?id=14334469