Fast Food Industry Analysis Paper

The fast food industry is impacted by factors as tax, interest rates, exchange rates, and labor market. During a recession, unemployment and high gas prices factor in to consumer spending on food. The industry receives a majority of its revenue from foreign markets. The profits are converted to U.S dollar. The exchange rate plays a major role if the dollar appreciates against other currencies. For example, if the dollar appreciates higher than the euro, then the industry profits will decrease due to the exchange rate. Domestically, fast food chains are expected to increase at a rate of 1.7% per year (Zwolak, 2010). New entrants forecasted to grow at a rate of 1.3% (Zwolak, 2010). For the most part, fast food chains will be opening new restaurants faster than new entrants coming into the

The rate of saturation in the market is the most likely reason for the differences between new restaurants and new entrants. While the economy has experienced a downturn, the employment rate is expected to increase at an annual rate of 1.1% to 4.13 million by 2015 (Zwolak, 2010). The industry expects to hire more employees to meet rush hour periods. In 2015, the industry projects 12.6 employees per restaurant (Zwolak, 2010). Employee wages are projected to grow to $12,600 per employee (Zwolak, 2010). Previously, the industry averaged $12,300 per employee (Zwolak, 2010). Overall, employee wages and employment is projected to rise due to the economy recovering from the recession. With a purchase, customers can expect to pay a state tax. Also, some city or county may require an additional local tax. The sales tax ranges from zero to 7% (Zwolak, 2010). Many state sales tax average is 6.0% to