Margins of heavily franchised full-service restaurant chains
DineEquity (99% franchised) and Denny’s (91%) are shielded
from the higher costs associated with a European-style
restaurant model that eliminates tipping and raises prices.
Franchisees would pay the higher labor, rent, credit card and tax
expenses that would likely result if the U.S. restaurant industry
adopts this system. Ruth’s Hospitality Group (55%), Buffalo Wild
Wings (53%) and Brinker (45%) also have a significant number of