McDonalds is a bit of an outlier here; they have incredibly predictable food costs due to high levels of standardization and a worldwide inventory network. The

McDonalds is a bit of an outlier here; they have incredibly predictable food costs due to high levels of standardization and a worldwide inventory network. The franchisees have a certain amount of leeway on pricing, some of which is dictated at the corporate level down, but it's based on bona fide expenses. If local regulatory conditions cause your labor cost to go up, they are absolutely allowed to (and will) raise prices to compensate.