This is part one of a three part series (dare I say exposé?) on the corporate restaurant industry.

Goodbye, Ruby Tuesday: an Indictment of the Corporate Restaurant Industry

The closing of so many chain restaurants is one of the few bright spots in an utterly dreary economic state. Corporate restaurants are a bane to American society. Making a buck is never wrong, but these companies have done so by enslaving workers, knowingly poisoning their customers and sabotaging small business. We should not be lamenting the fall of the corporate restaurant industry, but rather celebrate it by be prosecuting the CEO’s and politicians who conspired to create the nefarious beast.

The Big Bad Wolf – Mom and Pop Under Siege

One of the major differences between a locally owned restaurant and a corporate one is passion. Individuals who operate an eatery do not do so because they define success in monetary terms, they trend towards the romantic. They do what they do because they love it. Their mission is providing a memorable dining experience. They are often idealists, easy prey for corporate sharks.

Corporations who operate restaurants, on the other hand, are often run by people who have never worked in food service. They could just as easily hold the same position at a rental car company or furniture manufacturer. Their connection to the actual business they conduct is minimal at best. Their mission is not to insure a memorable dining experience but rather to manage the brand name.

In the battle to earn our dining dollars, the national chains have cut menu prices so low that shortcuts have been employed to control food cost. By importing much of their food from underdeveloped countries with poor health records and literally manipulating foods on a molecular level they have created a grocery list that seldom fluctuates in price and scarcely resembles the food it claims to be.

Twenty years ago the Dow Jones Industrial Average was 2168; it has in recent years topped 12,000 (an increase of over 550%). Likewise the average home went from $91,600 to $315,000 (a 244% increase) and the $24,450 annual income has more than doubled to over $50,000 a year. Since 1988 the US minimum wage has seen six pay increases with a seventh scheduled for July 2009. In that same time span the average cost of a chain restaurant entrée has only increased about 33%.

Since corporate restaurants pool the revenue from several locations they have a significantly greater source of capital to spend on advertising than locally owned establishments. Chief among the focus of this marketing barrage are the menu prices that seem to defy the laws of economics. Mom and pop shops have no recourse but to lower their prices to compete with those seen on TV placing their profitability in grave jeopardy.

The big chains exploit their buying power more than the current corporate whipping boy, Walmart, has ever done. A chain with 500 units can negotiate a price-per-pound on chicken that is of poorer quality than what the sole-proprietor serves. Though this is legal in every way the morality of the practice seems to change with the political climate. To compete on pricing many single unit owners are forced to use products that are below their personal standards thus losing their identity.

As a further kick to the metaphoric crotch, the chains use their substantial marketing budgets convincing the public that their steak dinner is in every way superior to a more expensive one at the local steak house. Teams of lawyers are employed to insure that the verbiage used does not meet the legal definition of false advertising. The same effort to satisfying the letter of the law is not put towards fulfilling the spirit of it.

The deceptive marketing does not end with inflated claims of meal quality but also inflated claims of service quality. Phrases like “When you’re here, you’re Family” and images of actual chefs working in the kitchen give diners a false impression that they will receive fine dining service at casual dining prices. Nothing could be further from the truth.

Do the corporate bosses want their units to provide poor service? Of course not, they know better service means more sales. But at the same time they have learned a little something about the American public, they will endure almost anything. Though their stated goal is great service, they’re unwritten goal is adequate service, translation – no complaints to the home office. Call it the ostrich approach to customer service, the issue only exists if it can be seen. As long as the service is not bad enough for the consumer to contact the home office then it couldn’t have been that bad. “Shut up, eat and get out.”

Of course, for this strategy to work the eradication of the individually owned restaurant is critical. No one needs any extra-milers mucking things by raising expectations. After all, low standards are easier to achieve.

Check out part two, Biting the Hand that Feeds.