Health Concerns and Legislations

In 2010, menu labeling of calories became mandatory in the United States thanks to the
Affordable Care Act. (For more information on the Affordable Care Act see appendices*) Since
then, some of the biggest QSR companies have seen a dip in revenue. From 2013-2015,
McDonalds annual revenue in the United States went from $8.85 billion to $8.56 billion. (See
Figure ) Customers in the United States are given a lot of information on how bad fast food is
for you and we are seeing shift in trends. If you look back at Figure 1, you will notice that
recently the fast casual industry is growing while the fast food industry is declining. Fast casual
outlets rose by 10.4% in 2014, compared to only 6.1% for quick service restaurants. Chipotle is
currently boasting 20% annual growth rates, showing that consumers are beginning to value
quality and healthiness more than they have in the past (Nath, 2015).

Market Deregulation and Subsidies

Market deregulation is important to the QSR industry. In most countries, the government is not
heavily involved in the Fast Food industry which is good for the competition. Australia, Canada,
New Zealand and the United States are a few of the countries with the highest deregulation and it

is no coincidence that 3 of the 4 countries listed are ranked in the top 6 for most McDonalds and
Yum! Brand stores in the world. (See figure ) These countries, along with the other leaders in
total stores (China, UK, France) are also some of the top leaders in farm subsidies. A study done
in the United States in 2007 showed that subsidies cost the average consumer an additional $216
in taxes and $104 in higher grocery prices (For more information on subsidies, see appendix *).
The increase in grocery prices is giving consumers more of a reason to spend their money at
quick service restaurants. Market deregulation and subsidies play a role in the QSR industry and
countries with less regulated markets and more agricultural subsidies have higher fast food
consumption. (Vogli, et. al., 2013)
Find example of how countries have less regulations

Kiosks
Technology is always advancing and companies are always looking for ways
to put themselves above their competition. Companies are beginning to

implement kiosks that allow the customer to complete their order without
having to deal with a cashier. A kiosk is a touchscreen pad that allows the
customer to customize their order without having to deal with a cashier.
Adding kiosks will reduce the time it takes for a customer to receive his food
as well as decrease labor costs for these companies, which is becoming more
and more important to the industry now that minimum wage is increasing
(Horovitz, 2016). (For more information on minimum wage reference
appendix *) Although Panera is a fast casual restaurant, their success with
kiosks is a reason fast food companies should follow. Panera implemented a
kiosk in a store by Fenway Park in 2012 and has reported that 60% of their
lunchtime transactions are completed on the kiosk. Wendys President, Todd
Penegor, announced that some franchises have began increasing prices to
offset the new wage hikes. (See Figure ) His plan is to implement these
kiosks in over 6,000 Wendys locations before the end of the year to help
reduce labor costs and to keep prices of their products competitive (Graham,
2016).

Future of the Industry

Improving the operations of your business in the QSR industry the most
important thing to do if you want to stay competitive. The way the industry
currently stands, large chains have a very large competitive advantage
because of their buying power and branding. (See Appendix * on branding)
This may no longer be the case. With the way technology is advancing, there
is a small fast food chain that has figured out a way to reduce the service
time and food waste. The company Zaxbys implemented a robotics-based

management system that starts the cooking process when a customer enters
the restaurant and gives employees specific instructions to expedite cooking
and service. Since implementing this technology, Zaxbys has reported a
$60,000 increase in annual gross profit per store as well as an $8,000
reduction in food waste (For more information on Zaxbys, reference
appendix *). The system is relatively cheap and is a way that will allow
smaller fast food chains to compete with these large chain restaurants
(Coulter & Noone, 2012).
References:
Make Them Eat Cake
http://web.b.ebscohost.com.proxy.library.ohiou.edu/ehost/detail/detail?
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%40sessionmgr105&vid=0&hid=123&bdata=JnNpdGU9ZWhvc3QtbGl2ZSZz
Y29wZT1zaXRl#AN=90176614&db=bth
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Kiosks Keep Their Cool
https://www.qsrmagazine.com/ordering/kiosks-keep-their-cool
Horovitz, B. (2016, April). Kiosks Keep Their Cool. QSR Magazine. Retrieved From
http://qsrmagazine.com/.
Applying Modern Robotics Technologies to Demand Prediction and
Production Management in the Quick-Service Restaurant Sector
https://journals.ohiolink.edu/pg_200?
113367907279700::NO:200:P200_ARTICLEID:321708154
Noone, Breffni M., & Coulter, R. Craig (2012). Applying Modern Robotics
Technologies to Demand Prediction and Production Management in the
Quick-Service Restaurant Sectoe. Cornell Hospitality Quarterly, 53(2), 122133

Wendy's Serves Up Big Kiosk

Expansion As Wage Hikes Hit Fast
Food
http://www.investors.com/politics/policy-analysis/wendys-serves-up-kiosksas-wages-rise-hits-fast-food-group/

Graham, J. (2016, May 12). Wendy's Serves Up Big Kiosk Expansion As Wage Hikes Hit Fast
Food. Retrieved September 02, 2016, from http://www.investors.com/politics/policyanalysis/wendys-serves-up-kiosks-as-wages-rise-hits-fast-food-group/

History of Minimum Wage

http://bebusinessed.com/history/history-of-minimum-wage/
Be Businessed. History of Minimum Wage. (2016). Retrieved September 02, 2016, from
http://bebusinessed.com/history/history-of-minimum-wage/

The influence of market deregulation on fast food consumption and

body mass index: a cross-national time series analysis
http://www.who.int/bulletin/volumes/92/2/13-120287/en/
De Vogli, R., Kouvonen, A., & Gimeno, D. (2013, September 23). The influence of market
deregulation on fast food consumption and body mass index: A cross-national time series
analysis. Retrieved from http://www.who.int/bulletin/volumes/92/2/13-120287/en/

Fast Food Versus Fast Casual

http://www.investopedia.com/articles/investing/020515/fast-food-versus-fastcasual.asp
Nath, T. (2015, February 05). Fast Food Versus Fast Casual | Investopedia. Retrieved September
02, 2016, from http://www.investopedia.com/articles/investing/020515/fast-food-versus-fastcasual.asp
Riedl, B. (2007, June). How Farm Subsidies Harm Taxpayers, Consumers, and Farmers, Too.
Retrieved September 04, 2016, from http://www.heritage.org/research/reports/2007/06/howfarm-subsidies-harm-taxpayers-consumers-and-farmers-too
http://www.heritage.org/research/reports/2007/06/how-farm-subsidies-harmtaxpayers-consumers-and-farmers-too

W. (2014, March 11). Agricultural Subsidies Remain a Staple in the Industrial World. Retrieved
September 04, 2016, from http://www.worldwatch.org/agricultural-subsidies-remain-stapleindustrial-world-0
http://www.worldwatch.org/agricultural-subsidies-remain-staple-industrialworld-0
E. (2015, January 08). Fast-food nations. Retrieved September 04, 2016, from
http://www.economist.com/fastfood
http://www.economist.com/fastfood
DATA FOR GRAPH
Statista. China - hospitality industry revenue until 2015, by restaurant type | Timeline. Retrieved
September 04, 2016, from http://www.statista.com/statistics/277039/hospitality-industryrevenue-in-china-by-restaurant-type/
http://www.statista.com/statistics/277039/hospitality-industry-revenue-inchina-by-restaurant-type/
Gale, F. (2013, October 24). U.S. Exports Surge as China Supports Agricultural Prices. Retrieved
September 04, 2016, from http://www.ers.usda.gov/amber-waves/2013-october/us-exports-surgeas-china-supports-agricultural-prices.aspx#.V8ze-pMrIch
http://www.ers.usda.gov/amber-waves/2013-october/us-exports-surge-aschina-supports-agricultural-prices.aspx#.V8uwbpMrIcg
PCRM. (2013). Agriculture and Health Policies in Conflict: How Subsidies Tax our Health:
Government Support for Unhealthful Foods. Retrieved September 04, 2016, from
http://www.pcrm.org/health/reports/agriculture-and-health-policies-unhealthful-foods
http://www.pcrm.org/health/reports/agriculture-and-health-policiesunhealthful-foods
FederalRegister. (2014, Fall). Dodd-Frank Wall Steet Reform 324 in the last year. Retrieved
September 04, 2016, from https://www.federalregister.gov/regulations/0910-AG57/foodlabeling-nutrition-labeling-of-standard-menu-items-in-restaurants-and-similar-retail-food-estab
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References

NORRIS, J. (2013). Make Them Eat Cake. Foreign Policy, (202), 1. Retrieved
From web.a.ebscohost.com
Horovitz, B. (2016, April). Kiosks Keep Their Cool. QSR Magazine. Retrieved From
http://qsrmagazine.com/.
Noone, Breffni M., & Coulter, R. Craig (2012). Applying Modern Robotics
Technologies to Demand Prediction and Production Management in the
Quick-Service Restaurant Sectoe. Cornell Hospitality Quarterly, 53(2), 122133
Graham, J. (2016, May 12). Wendy's Serves Up Big Kiosk Expansion As Wage Hikes Hit Fast
Food. Retrieved September 02, 2016, from http://www.investors.com/politics/policyanalysis/wendys-serves-up-kiosks-as-wages-rise-hits-fast-food-group/
Be Businessed. History of Minimum Wage. (2016). Retrieved September 02, 2016, from
http://bebusinessed.com/history/history-of-minimum-wage/
De Vogli, R., Kouvonen, A., & Gimeno, D. (2013, September 23). The influence of market
deregulation on fast food consumption and body mass index: A cross-national time series
analysis. Retrieved from http://www.who.int/bulletin/volumes/92/2/13-120287/en/
Nath, T. (2015, February 05). Fast Food Versus Fast Casual | Investopedia. Retrieved September
02, 2016, from http://www.investopedia.com/articles/investing/020515/fast-food-versus-fastcasual.asp
Riedl, B. (2007, June). How Farm Subsidies Harm Taxpayers, Consumers, and Farmers, Too.
Retrieved September 04, 2016, from http://www.heritage.org/research/reports/2007/06/howfarm-subsidies-harm-taxpayers-consumers-and-farmers-too
W. (2014, March 11). Agricultural Subsidies Remain a Staple in the Industrial World. Retrieved
September 04, 2016, from http://www.worldwatch.org/agricultural-subsidies-remain-stapleindustrial-world-0
Economist. (2015, January 08). Fast-food nations. Retrieved September 04, 2016, from
http://www.economist.com/fastfood
Statista. China - hospitality industry revenue until 2015, by restaurant type | Timeline. Retrieved
September 04, 2016, from http://www.statista.com/statistics/277039/hospitality-industryrevenue-in-china-by-restaurant-type/
Gale, F. (2013, October 24). U.S. Exports Surge as China Supports Agricultural Prices. Retrieved
September 04, 2016, from http://www.ers.usda.gov/amber-waves/2013-october/us-exports-surgeas-china-supports-agricultural-prices.aspx#.V8ze-pMrIch

PCRM. (2013). Agriculture and Health Policies in Conflict: How Subsidies Tax our Health:
Government Support for Unhealthful Foods. Retrieved September 04, 2016, from
http://www.pcrm.org/health/reports/agriculture-and-health-policies-unhealthful-foods
FederalRegister. (2014, Fall). Dodd-Frank Wall Steet Reform 324 in the last year. Retrieved
September 04, 2016, from https://www.federalregister.gov/regulations/0910-AG57/foodlabeling-nutrition-labeling-of-standard-menu-items-in-restaurants-and-similar-retail-food-estab