Inflation, a driving force behind many of the challenges businesses face today, has caused one restaurant owner to charge nearly $16 for a BLT sandwich due to rising costs.
Will Restaurants Investment Group founder and CEO Brian Will broke down his monthly expenses during an appearance on "Varney & Co." after a friend confronted him about the price of his $16 BLT sandwich.
The wholesale cost for the popular sandwich is only $5 according to Will, but the need to cover operational expenses is what caused the meal that was once $12.99 three years ago, to become $15.99 today.
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Will detailed his monthly expenses, sharing insight on the business side of running a restaurant and justifying the rising price of meals.
Will spends $20,000 a month on renting a space that houses one of his restaurants in a "new mixed-use development," arguing it "costs a lot" given the location.
"My utilities [are] $6,000 a month. My labor in December [was] $60,000, which means I've got $86,000 of base cost the day I open the doors on January 1," Will explained.
"You figure in a 32% food cost. I have $11 of gross profit in that sandwich. You take all my costs divided by $11 of gross profit, and I [have] to sell 93,000 sandwiches just to get to zero before I can make any money," he continued.
Will Restaurants Investment Group was established in 2010. The premier restaurant management company owns and operates brands like Central City Tavern, The Tavern House, The Derby Sports Bar and Cantina Loca.
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Will told Fox Business that he’s "now dealing with a different economy" than when he first signed the lease for the eatery’s location.
"We signed our lease pre-COVID with fixed increases every year. And I have a personal guarantee, so my rent isn’t going down. It’s going up every year forever," he stressed.
The commercial real estate industry continues to grapple with the rise in interest rates and the impact of remote work.
"My revenue per operation has dropped about $350,000 per store while my rent has gone up, labor is up 30%, insurance is up 40%, rents up 10%," the restaurateur stressed.
"It's incredible what my costs have gone up over the last three years."
