People are fine with making their own food. It has a big benefit in that you can make it exactly how you want. Restaurant food makes the most sense for things which are difficult to make or require expensive equipment or the most prep.

I don't feel its a matter of people passing or not. Its a matter of how often they pass. People, in aggregate, will just eat out less. Whether this means restaurants will, at the end of the month, make more or less money, I don't know (I suspect its less, because it seems most of the costs are pretty constant; the food itself is a minority of the pie).

why should consumer over pay for anything?

If another restaurant can make a profit by increasing efficiency and keep prices low, they win over one that doesn't. And restaurants have no real business moat - recipes for most things are known, and it's mighty hard to invent something totally new.

Let's imagine that all restaurants raise their prices like the article claims. Suddenly, the margins at 19%. Let's also assume that consumers are willing to pay, but if they find something of similar quality but cheaper, the will move. Then one self-interested restaurant owner could simply lower their price by a bit, and they will make more money than their competition.

And so all restaurants have to do the same. So the margin of 5-9% is what you end up with.

TBH, as an investor, if you're given a 9% return on investment, i think they would be ok. It's not great, but it's not the worst. 19% margin is too high: most junk bonds are returning something like 8-10% (sure some are like 20%). Is running a restaurant riskier than junk bonds?

Personally I think it's mostly the last one: I know what sandwiches are "worth" and you are trying to fleece me, or your high price is because you are bad at running a business and it's not my problem. No one likes to be conned or make up for someone else's mistakes, that stings a lot more than just paying a few dollars more. I've noticed a vaguer version of that train of thought in my own head more than once.

The calculus is, what percentage of Americans can afford $15-$20 per sandwich on a regular basis? And how does that revenue compare to current revenues?

edit: Though, this throwing around of prices is perhaps not very effective. Reasonable prices for sandwiches in SFC, NYC, or Seattle will be much higher than a midwest capital, which will still be higher than some rural diner. The point stands, however, that there's a breaking point which has nothing to do with principles or indignation and everything to do with household economics.

I'd pay $13-15 for the doner in the article for sure. (NYC)