RESTAURANTS HAVE THREE MAIN POLITICAL PRIORITIES THIS YEAR: SWIPE FEES, IMMIGRATION AND TRADE. | PHOTO: DIMITRI MORSON
of revenues. Because so many restaurants operate on the edge, it means simple challenges can wipe out their profits and drive them out of business. But these numbers are difficult for members of Congress to ignore, especially given the new and growing costs many res- taurants must pay simply to do business. “We have credit card fees and third-par- ty delivery fees and [increasing] prices from all our vendors,” Mike Axiotis, chairman of the association’s board and CEO of the Red Robin and Wingstop franchisee Lehigh Val- ley Restaurant Brands. “Rent has gone up. Taxes have gone up. To only make 2.8% prof- it margin doing the amount of work we do is The profitability issue is most at play when it comes to swipe fees. That’s also the issue on which the association is most confident. “I feel better about swipe fees every week than I did the week before,” Kennedy said. Swipe fees have quietly become a major expense for a lot of restaurants, typically competing with rent to be the third-biggest cost for restaurants. As many as nine out of 10 transactions are done with a card, mean- ing there’s a fee attached. The interchange fee averages about very, very difficult.” SWIPE FEES
2% in the U.S., where such fees are widely considered to be the most expensive in the world. In the European Union, for instance, such fees are capped at 0.2% for debit cards and 0.3% for credit cards. For an industry that generates such low profits on average, such fees stick out. “In my 13 years, that swipe fee has gone from a nickel to 15 cents,” Steven O’Neil, managing partner at The Manship Wood Fired Kitchen in Jackson, Mississippi, said at the conference. “That’s a 300% increase in just over a decade that I’ve been a manager and an operator.” To banks, however, such fees are impor- tant because they help fund the payment infrastructure and its security. They argue that cards increase frequency and ticket size and make the checkout process faster. The Electronic Payments Coalition (EPC) argues that credit card reward programs would dis- appear if the fees were capped, for instance. Consumers tend to like such rewards. Restaurants, nevertheless, believe they have an upper hand on that issue this year for multiple reasons. First: Affordability is a crucial issue heading into a midterm election, and anything that can be seen as addressing that issue has a chance. Second, legislators in Delaware recently advanced bills to curtail such fees.
Third, and most important: President Trump in January backed a U.S. Senate bill to introduce more competition in the cred- it card processing industry, known as the Credit Card Competition Act. Trump said the bill would end “out-of-control swipe fee rip- offs.” “I’m not buying champagne,” Kennedy said. “I’m certainly not chilling any. But we are definitely looking at a point where every elected [official] is going to say this is an un - tenable situation. We probably do need to figure out a solution. They can’t keep sweep - ing this under the carpet, which is what they’ve been doing for years.” IMMIGRATION Another issue, immigration, is a lot less cer- tain. Reform has been a political hot potato for four decades, undone by political dis- putes, concerns about border security and more pressing issues. The last time a major immigration bill passed was 1986. Yet it’s a crucial one for restaurants. More than one out of five restaurant work - ers was born outside the U.S., a similar per- centage to employers like meat packers or agriculture that help make up the industry’s supply chain. That means the issue could the- oretically impact both labor availability and the cost of goods.
APRIL 2026 RESTAURANT BUSINESS
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