1. Reduce expenses in other areas
2. Accept the reduced profit
3. Find that the cost is offset by more productive employees either through morale increase or improved recruiting
The markets are highly competitive, and consumers will compare two stores: A, B and choose the cheaper.
As explained above, I don't take it as a given that increased employee wages require increased prices.
It's 15% "profit" on paper, but a franchiser is typically in debt for the first 12 years of the store before they make any "net profit".
So we're talking an industry where most of the so-called "capitalists" are in debt.
This is a hyper-competitive market place, and one play only adding on %s to their products will be a hit to their competitiveness.
They dont decided prices, the market does.
1. Go upmarket in some way, either sell nicer food with a better margin or higher more oroductive employees.
2. Through collective action of some kind get all competitors to raise their prices and pass the cartel profits to the worker (for instance a minimum wage law could accomplish this).