Inflation, the driving force behind many of the challenges businesses face today, caused one restaurant owner to charge nearly $16 for a BLT sandwich due to rising costs.
Brian Will, founder and CEO of Will Restaurants Investment Group, revealed a breakdown of his monthly expenses during an appearance on “Varney & Co.” After his friend confronted him about the price of a $16 BLT sandwich.
Will said the popular sandwich costs just $5 wholesale, but because of the need to cover operating costs, a meal that cost $12.99 three years ago now costs $15.99.
Will detailed his monthly expenses, shared insight into the business side of running a restaurant, and justified the soaring prices of his meals.
Will claims he is spending $20,000 a month to rent space for his restaurant in a “new mixed-use development,” which is “expensive” given the location.
“my utility [are] $6,000 per month. My birth in December [was] “$60,000 means we have a base cost of $86,000 the day we open our doors on January 1st,” Will explained.
“Food costs will be 32%. I have a gross profit of $11 on that sandwich. If I divide all my costs by my gross profit of $11, I get [have] “We had to sell 93,000 sandwiches before we made any money,” he continued.
Will Restaurants Investment Group was founded in 2010.
This leading restaurant management company owns and operates brands such as Central City Tavern, The Tavern House, The Derby Sports Bar, and Cantina Loca.
Will told Fox Business that he was “dealing with a different economic situation” than when he first signed the lease for the restaurant's location.
“Before COVID-19, we signed a contract with a fixed increase each year. We also have a personal guarantee, so the rent will not go down. It will continue to go up every year forever,” he stressed.
The commercial real estate industry continues to grapple with the effects of rising interest rates and remote work.
“Rent has increased, labor costs have increased by 30%, insurance premiums have increased by 40%, and rent has increased by 10%, while operating revenue per store has decreased by approximately $350,000,” the restaurateur emphasized.
“It's incredible how costs have gone up over the past three years. ”
