Is Your Restaurant Pricing for Customers or Franchisees?

 

When a legacy brand like KFC pilots two distinct value platforms in Cleveland and Tampa at the same time, it signals more than a tactical promotion. It signals strategic tension according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. The question every restaurant executive and franchisee must confront in 2026 is simple:

Are you pricing for customers — or are you pricing to protect franchisee margins?

That distinction is now determining market share winners and losers.

 

KFC’s Two-Test Strategy: A Case Study in Pricing Psychology

In the Cleveland-Akron-Canton market, KFC is offering seven days of consistent $8 value options:

·       7 tenders + 3 sauces

·       8 wings + 2 sauces

·       20 nuggets + 4 sauces

In Tampa Bay-St. Pete, the strategy shifts to $10 rotating weekday offers designed to build routine:

·       Monday: 24 nuggets

·       Tuesday: 8-piece bone-in

·       Wednesday: 10 wings

·       Thursday: 8 tenders

·       Friday: 24 nuggets

Two markets. Two theories:

1.       Everyday flexible value.

2.       Structured weekday traffic building.

The subtext? Consumers are trading down, frequency is soft, and value architecture must evolve.

 

The Value Environment: Consumers Are in Control

Since mid-2024, restaurant traffic has softened across quick-service and fast casual. Industry data shows:

·       Nearly 60% of consumers now say price is the #1 driver of restaurant choice.

·       Over 40% report reducing restaurant frequency in favor of grocery prepared foods.

·       Digital coupon redemption has increased double digits year-over-year.

·       Third-party delivery remains pressured due to fee fatigue.

Consumers are not rejecting restaurants.
They are rejecting perceived overpricing.

Brands that understand this are leaning into transparent value platforms. Those that don’t are quietly capitulating market share.

 

Proof That Pricing for Customers Wins

Consider McDonald's.

Its Extra Value Meal architecture helped drive a 6.8% same-store sales increase in Q4. That growth did not come from premium burgers. It came from price certainty and bundled value perception.

Contrast that with brands that resisted value resets in 2024–2025, citing franchisee margin protection. Many experienced:

·       Negative traffic comps.

·       Shrinking market share among Gen Z.

·       Increased trade-down to grocery deli and C-store hot bars.

When value perception erodes, elasticity disappears.

 

Market Share Capitulation: The Pattern

In food retail and foodservice history, the pattern is clear:

1. Premium-Only Stance During Economic Pressure

Brands that insist on premium positioning during consumer contraction lose traffic first.

2. Late-to-Value Reaction

Once traffic drops, promotions become reactive and margin-destructive rather than strategic.

3. Franchisee-First Pricing

When operators resist national value platforms to protect short-term margin, customers defect to competitors offering consistency.

The result?
Permanent share transfer.

Quick-service chicken is now one of the most promotional categories in foodservice. If a brand does not defend its entry price points, competitors will.

 

The Franchisee Margin Myth

Let’s be precise.

Franchisees need profitability.
But customers determine revenue.

If pricing is engineered solely to maintain food-cost percentages and labor coverage without regard to perceived value:

·       Frequency declines.

·       Fixed costs are spread over fewer transactions.

·       Margins compress anyway.

Volume is margin’s best friend.

The most successful QSR systems understand that disciplined value platforms can:

·       Drive attachment (beverages, sides).

·       Increase digital app engagement.

·       Improve loyalty enrollment.

·       Boost lifetime customer value.

Why Structured Value Works

There is a reason the Tampa test uses weekday structure.

Behavioral economics shows that routine creates habit loops. If Tuesday becomes “Chicken Night,” you are not competing on price alone — you are competing on ritual.

Meanwhile, the Cleveland test explores variety within fixed price ceilings. That reduces cognitive friction and increases order confidence.

Both models recognize one truth:
Consumers want predictability.

 

Lessons from Outside Chicken

Look at pizza.

Domino's recently posted 3.7% Q4 same-store sales growth during an industry slowdown. Domino’s long ago mastered everyday value through mix-and-match deals and digital ordering ease.

Domino’s does not apologize for value.
It engineers it.

Grocery and C-Store Pressure Is Real

Restaurants are no longer competing only against restaurants.

·       Grocery prepared meals now offer family bundles under $20.

·       Convenience stores have upgraded fresh food programs.

·       Private-label meal kits are growing.

When a family of four can buy a deli rotisserie chicken, two sides, and rolls for less than a fast-food combo bundle, pricing strategy becomes existential.

 

Customers Come First — Always

The food industry is not a cost-plus business.
It is a perception-plus business.

If customers believe:

·       Portions are shrinking.

·       Prices are climbing.

·       Promotions are confusing.

They disengage.

But if customers believe:

·       Pricing is fair.

·       Portions are generous.

·       Value is consistent.

They reward brands with frequency and advocacy.

KFC’s test is important not because of the $8 or $10 price point.

It is important because it signals willingness to ask:
How do consumers want to buy right now?

That question must precede all margin modeling.

 

The Strategic Imperative

Brands must:

1.       Protect entry price points.

2.       Simplify value messaging.

3.       Use data to understand elasticity by market.

4.       Align franchisees around long-term traffic growth rather than short-term price resistance.

History shows that when brands price for operators instead of customers, the market corrects them.

And it corrects them harshly.

 

Three Insights from the Grocerant Guru®

1.       Volume cures most margin problems — irrelevance cures none.
If customers stop coming, cost controls will not save you.

2.       Everyday value beats episodic discounting.
Consistency builds trust. Surprise promotions build dependency.

3.       Price architecture is brand architecture.
When value erodes, brand equity erodes with it. Protect the customer first — franchisee profitability follows frequency.

The restaurant industry’s value war is not about discounts.
It is about discipline.

The brands that remember who pays the bill — the customer — will own the next cycle of growth.

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter