---
title: "WSJ: Increase wages or expand?"
url: https://burnaze.com/article/e00ec350-d27e-43ae-8d26-bbbc78c7cdc8
source: "1851 Franchise"
original_url: https://1851franchise.com/wsj-increase-wages-or-expand-1542
category: "Restaurants"
industry: "Restaurants"
topics: ["Development & multi-unit"]
published: 2015-04-28T16:11:00.000Z
modified: 2026-11-01T13:41:04.250Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/8d777f385d3dfec8815d20f7496026dc4433.png
---

# WSJ: Increase wages or expand?

**TL;DR:** Franchises like McDonald's are raising wages to attract workers, but labor costs are increasing, forcing some chains to put expansion plans on hold. Toppers Pizza has been forced to put expansion plans on hold due to increasing labor costs.

*originally published in 1851 Franchise on 2015-04-28. [Read the original](https://1851franchise.com/wsj-increase-wages-or-expand-1542).*

## Story

Franchises are paying the cost of being the boss, and right now that often means forgoing expansion plans.

The Wall Street Journal reported that franchises like McDonald’s are raising wages in an attempt to beat out competition for workers. However, for brands like Toppers Pizza, trying to keep up increases labor costs, which would then have to be passed on to customers.

The pizza chain is unwilling to do this, and has been forced to put expansion plans on hold instead.

“We don’t want to be the first ones to increase prices,” Kendall Richmond, chief financial officer of Toppers Pizza, told the Journal. “We’re looking at every line item on the expense side and looking at where we can decrease costs.”

Richmond went on to tell the news source that for every $1-an-hour increase in wages, total labor costs rise 0.75 percent. At the same time, not raising wages to retain employees can come with its own costs, including the expense of training new workers.

In short, today’s franchises face a number of difficult decisions, balancing keeping employees happy with a healthy wage against plans for opening new locations across the country.

## Entities

- 1851 Franchise (publication)
- Restaurants (sector)
- McDonald's (company)
- expansion plans (topic)
- Toppers Pizza (company)
- labor costs (topic)
- wage increase (topic)
- franchise challenges (topic)

---
Originally reported by 1851 Franchise (https://1851franchise.com/wsj-increase-wages-or-expand-1542). Summarized by Burnaze (https://burnaze.com/article/e00ec350-d27e-43ae-8d26-bbbc78c7cdc8).