What does a slice of cheese, an order of nuggets,
and your liter of cola have in common? They all seem inexpensive,
but actually have a much higher cost than you might think. Here's why Burger King is so cheap.
Just like other fast-food chains, Burger King only sells menu items that make the franchise cold,
hard cash. This also means that the chain only stocks a limited inventory of ingredients that
it repeatedly uses to make different meals. For example, when Burger King introduced its tacos
in 2002 — a rather surprising offering for the franchise at the time — it didn't have to invest
in a lot of additional ingredients since it already used lettuce, tomatoes, and cheese in
other menu items. Additionally, in 2021 Burger King announced that it will reduce its already
limited list of menu items in the U.S. to speed up its drive-thru service and increase its sales.
The average mark-up for a product is 100%,
but some items are sold at much more than their actual worth. The average mark-up on a restaurant
soda is a massive 1,150% since it's nothing more than a mix of syrup and carbonated water. As such,
it's little wonder that Burger King makes so much money on the product. Other cost-effective items
are ice cream and fries, since they can be made in large quantities and aren't labor-intensive.
Burger King has been luring customers to its restaurants with low-priced menu items for years.
"Do you want to Dimpus-size your order for a quarter more?"
"Want me to puchi-size your face for free?"
In 2021, Burger King launched its $1 Your Way menu consisting of four items priced at just $1.
While savvy customers will stop at ordering a $1 burger,
an item said to bring Burger King only 6 cents, most will also spend money
on soft drinks and fries — the two most heavily marked-up items at Burger King.
Burger King's seemingly affordable Kids Meals also bring in adults who are bound to purchase more
expensive items from the menu for themselves. This strategy also sets kids up as future customers of
the franchise. And the King doesn't seem to deny this ploy: According to the Burger King website,
by trying the Kids Meals, "you can find your favorite flavor early in life."
While they may appear to be a cheap addition to your main meal,
side dishes such as Chicken Nuggets or Mozzarella Sticks bring in a lot of profit for Burger King.
This is because sides are usually tiny and prepared in bulk, which makes them
both cheap to produce and fast to serve. In addition, opting to add so-called staples such
as French fries or a soft drink to your burger takes the franchise's profits to another level.
Burger King also makes plenty of money on an item that at a first glance may not
even appear to be an extra — cheese. While the Burger King website depicts a cheesy Whopper,
the burger doesn't actually come with cheese,
and the addition will cost you dearly. Geoffrey James from Inc. explains:
"I recently ordered a Whopper and, as usual, the order-taker asked, 'Do you want cheese with that?'
Rather than answering, I asked, 'How much does the cheese cost?' The answer was '50 cents.'"
Cheese doesn't even appear on the menu as an add-on, nor as a separate item on the receipt.
So unless you ask — or see this video — you'll never find out how much it actually costs.
Most people order a value meal thinking they're saving money,
when they're actually getting additional items that they may not have ordered otherwise — usually
French fries and soda — both of which are huge money-makers for the franchise. Let's do the math
Or at least, lets do the rough math. A Whopper Jr. value meal costs a bit over five bucks. If
you were to buy these items separately, you would pay a little over two dollars for the Whopper Jr.,
and around three fifty for the soft drink and the small fries. Basically,
you’re saving about 50 cents with the “value meal” and getting items might not even want.
Fast food joints often run a variety of marketing campaigns, such as price discount
coupons or two-for-one offers. While these may sound appealing, sometimes restaurants
don't actually deliver on the promise. And Burger King is a case in point. In 2018,
the franchise was sued for charging customers more for two Croissan'wich breakfast sandwiches
with a BOGO coupon than they would otherwise have paid for a single item.
Perhaps one of the biggest reasons why Burger King is able to keep its prices so low is the
sheer quantity of food sold. With thousands of restaurants worldwide, the chain's profits are
all about scale. The franchise also makes a lot of its money by selling discounted items
using a concept called elasticity of demand. As The BBC explains
"If the firm lowers price 5% and quantity sold rises by 10%,
then demand is elastic and total revenue will rise."
One of the reasons why Burger King's items are so cheap is the company's ability to buy ingredients
in bulk, ensuring huge discounts. Since nobody wants to lose a client as big as Burger King,
the franchise has huge negotiation power when it comes to prices.
And the franchise often looks to outside markets to source their ingredients.
Burger King's sourcing practices have backfired in the past. A few years ago,
Burger King was linked with a company in Brazil that grazes cattle on protected forest land.
The franchise received an F in the 2021 Chain Reaction report for not taking "public actions
regarding antibiotics in their supply chains." In 2013, the franchise's beef was put into question
after a European meat supplier was accused of selling horse meat advertised as beef.
Like its fast food competitors, Burger King uses cheap labor.
"A What?"
"A liter of cola."
"Liter of cola. Do we make Liter of cola?"
Burger King pays its team members $9.73 per hour. So if a Burger King employee puts in
40 hours per week, 52 weeks a year, their annual pay will clock in at $20,238, less than half of
the median annual wage in the U.S. So it's not surprising that in 2021, the entire staff at a
Burger King in Nebraska resigned, leaving a sign outside the restaurant that read:
"We all quit ... Sorry for the inconvenience."
In an attempt to cut their employee expenses even further,
Burger King recently started installing self-service kiosks at its stores.
The Manager of Burger King at the Manchester Airport, Wayne Tailor, said,
"They've increased our productivity 10 times. We have more staff to assemble the orders,
we can increase the speed of service and general productivity within the unit."
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