How have higher gas prices in recent months impacted your business? How are you dealing with the higher prices?

One of the top national stories over the last two months has been the skyrocketing gas prices due to the United States’ involvement in the war in Iran. Prices surged by more than 47 percent since the start of the Iran war in late February, reaching a national average of $4.39 to $4.46 per gallon by May 1.

The impact has been felt by residents and businesses across the country, including those in the restaurant industry. Franchise Update asked several multi-unit franchisees how the increased gas prices have impacted their business and how they are handling the surge. Perhaps the primary challenge is with customers themselves, as higher prices mean less discretionary spending. However, it also extends to additional operating costs with the supply chain and product distribution. Increased fuel prices also affect restaurants that offer delivery service as part of their business model.

Franchisees were consistent in how they are dealing with the higher gas prices. As in any tight economy, they are focused on increasing operational efficiency and reducing waste. They are also making sure to provide customers with greater value and experience for their dollar. As the war and rising gas prices continue, restaurant operators will need to prolong these practices to ensure returning business at their locations.

Between higher gas prices, the impact of tariffs, and inflation, the state of the economy is top of mind for most people in the country right now. Over the past year, we asked other multi-unit restaurant franchisees how the economy is affecting them, their employees, and their customers. They said rising costs have impacted real estate, staffing, and consumer spending habits. See the Franchisee Bytes section below to see how franchisees are handling the challenges of a struggling economy.

Andy Kumar

Company: Kumar McDonald’s
Brands: 19 McDonald’s
Years in Franchising: 8

Higher gas prices always ripple through our business in two ways: our guests feel the pressure in their household budgets, and our own operating costs rise through distribution and supply chain. In North Texas, we’ve seen customers become more value‑conscious, so we’ve doubled down on offering compelling everyday value without compromising speed or hospitality. Internally, we’ve focused on efficiency by optimizing delivery schedules, reducing waste, and using data to staff more precisely. The goal is to absorb cost pressures without passing them directly to the guest, and to keep our restaurants a dependable, affordable choice for families.

High gas prices make customers more value‑focused and increase our own supply chain costs. We’ve responded by tightening operational efficiency, reducing waste, and leaning into strong everyday value to keep McDonald’s an affordable option for our community.

Brian Bailey

Company: Team Bailey
Brands: 160 Domino’s
Years in Franchising: 38

Yes, higher gas prices have had a modest impact on our business, primarily through increased mileage reimbursement for our delivery team. We have absorbed those added costs rather than passing them on to our customers, because delivering strong, everyday value remains a core part of who we are.

Nandini Mangroo

Company: Five Guys Taverns, LLC
Brands: 3 Taffer’s Tavern
Years in Franchising: 6

We haven’t seen a significant direct impact from higher gas prices, but when costs at the pump rise, discretionary spending naturally becomes more cautious. Dining out becomes more intentional, which puts even greater emphasis on delivering an exceptional experience that truly feels worth it.

We stay focused on what we can control, including tight purchasing, precise labor management, and closely monitoring the cost of goods to protect margins without compromising quality. If we consistently deliver great hospitality, a strong product, and a memorable experience that is true to our tavern roots, guests will continue to choose to visit us, even in a more disciplined environment.

John Schissler

Company: J&M Hospitality
Brands: 10 Chicken Salad Chicks
Years in Franchising: 11

The only noticeable impact from higher gas prices for us has been from fuel surcharge increases by our vendors. Although the percentage increase is noticeable on the P&L, the dollar cost is relatively low.

Franchisee Bytes

How is the economy in your region(s) affecting you, your employees, your customers?

We’ve experienced unprecedented inflation over the past three years, which has impacted pricing industry-wide and limited discretionary income for our customers.
-Mike Kulp, CEO, KBP Brands, 828 KFC, 119 Arby’s, 85 Sonic, 56 Taco Bell

Every day, it gets more expensive to build, staff, and train for a new restaurant. We have to be considerate of this and nimble in our growth strategy. It’s not our job to make the rules; we just have to be the best at navigating them.
-Alex Karcher, Operating Principal, JCK Restaurants, 61 Carl’s Jr., 11 Jersey Mike’s Subs, 8 The Human Bean, 8 Dave’s Hot Chicken, 1 Hawaiian Bros Island Grill

Costs are up across the board, but we’ve seen that guests continue to prioritize healthy, convenient options like Playa Bowls. We’re adapting by improving operational efficiency, managing costs thoughtfully, and continuing to innovate with our menu so that guests always feel good about their experience.
-Misha Punwani, Multi-Unit Franchise Owner, 16 Playa Bowls

Our guests have less to spend, which means we must overdeliver when they choose us for a meal. As a company, we have thrown our profits into remodels, which cost more to complete than even two years ago. It’s a tough time for everyone, but we are committed to focusing on controlling those costs we can and not skimping in areas where it makes a difference.
- Tamra Kennedy, Franchise Operator, Twin City T.J.’s, 6 Taco John’s

The past few years have been a roller coaster, and everyone is seeking some stability. We have tried to look at our costs and find ways to not increase menu prices unless it is absolutely necessary.
-Andy Cabral, CEO, Vigario Management, 25 Dunkin’, 9 Baskin-Robbins

The economy hasn’t significantly impacted us thanks to our mobile model, which keeps overhead low and operations agile. This flexibility helps us retain staff and adapt to market changes, allowing us to continue serving our customers affordably even in high-cost or economically uncertain regions.
-Yunus Shahul, Franchise Owner, Smartfoods Group, 24 Cousins Maine Lobster, 1 German Doner Kebab

The federal government shutdown had a significant impact on the economy in our region and, as a result, directly affected both our employees and customers. Our staff was concerned about their jobs and whether our businesses would be able to endure a stressed economy. Likewise, customer visits declined in large part due to economic uncertainty. A significant number of business closures, coupled with the government woes, make for a very delicate economic outlook. We are all affected, whether directly or indirectly, by the uncertainty.
-Clement Troutman, CEO, Troutman Management, 2 Tropical Smoothie Cafe, 1 PJ’s Coffee of New Orleans