There is a certain amount of investment needed to keep going. If you are going to close the restaurant next year you can keep the current tables, otherwise replace them before they get too worn out. Or maybe it is the fry machine at the end of life, replace it for $50,000. If the restaurant continues for a few more years it is worth it, to fix/replace things, but if the restaurant is doomed it is better to cut your loses.

Even in the best of times restaurants are the hardest business to run successfully. These are not the best of times, and (as always) it isn't clear what the future will hold.

I realize this was in hypothetical terms, but do fry machines really cost $50k!?

No. Perhaps the fully automated/robotic type that McDonalds uses do, but any restaurant that is spending $50k per fryer is insane.

McDonald's fryers are generally just standard commercial fryers with preset temperatures and timers. The only custom part is the (separate and standalone) machine that measures out standardized portions of fries into baskets, and while I'm sure they'd call it a trade secret it's really just a big plastic hopper and some sort of weight sensor arrangement.

Did McDonalds ever adopt the ones with built-in cleaning systems?

They really are that expensive, and not just the robotic ones.

Perhaps with the entire hood/exhaust and fire suppression system. But not a simple two basket fryer. When I bought mine (new) in 1995, they were roughly $3K. And this had a built-in filtering system.

Actually, to spend $50K on a fryer system is pretty hard:

https://www.webstaurantstore.com/63853/deep-fryer-with-oil-f...

A casual search shows machines costing from $1k to $42k: https://www.webstaurantstore.com/14389/electric-fryers.html

Dang, I can get a countertop fryer for $180?

Fried food's on the menu, boys! Quadruple bypass, here I come.

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Depends on size. Big ones were that much 20 years ago when I last priced them. Of course there are smaller models and used as well.

A standalone commercial fryer unit meant to be run 24/7 might cost you $1000-$2000 or so if you don't want any special features in it.

Sorry, should have been more specific! More correctly, they are debating if it's just time to retire now and be grandparents full time rather than risk losing a lot money in the restaurant due to increased prices, then being forced to retire.

I assume "closing down the restaurant and retiring" means they will sell the restaurant (or at least the property), but I am not sure to be honest?

Would raising prices 5 or 10% be so catastrophic to revenue that they couldnt even give it a few weeks? Or are they looking at a 50%+ price increase?

If they want to retire anyways, then good for them. But a lot of businesses have had to raise prices this year, including grocers, which are arguably restaurants only competition. I think folks would understand.

If raising the prices drives away customers, you have now lost a notable value if you try to sell. Brand perception is (almost) everything. Unless you offer something truly unique or exceptional, you're replaceable in just about every market.

There was a local beer taproom/bottle shop that I frequented a lot for years. Even as craft beer became more prominent and there were more local options, I liked it enough to keep going, but fundamentally there came a point where they raised their prices enough that I started going elsewhere, and once I broke that habit there was never a big reason to go back unless I was meeting someone else there once in a while.

In this case, "enough" was in the 20% range, but given what's happened to food prices lately I don't think 5-10% is a realistic number for a restaraunt either.

> If raising the prices drives away customers, you have now lost a notable value if you try to sell. Brand perception is (almost) everything. Unless you offer something truly unique or exceptional, you're replaceable in just about every market.

Agreed in general terms, but who is going to buy a business that cant even cover its costs? It sounds like this business has a negative expected value without raising prices.

Is this inflation creeping up in all the expected places? The value of goods is the same but the value of the USD is lower and thus we must increase costs. I don’t see it impacting brand perception if all prices go up.

They're just going to close... without risk of losing money by trying to raise prices and seeing what happens.

If your expected return on investment is negative, isn't the rational decision to not invest in the first place?