Are Restaurant Owners Overcharging You? The Hidden Profits Behind Your Favorite Spots
Hello, it’s Earnest Mann here! In today’s episode, I’m breaking down the hidden markups and questionable practices behind restaurant pricing—a peek into the reality of restaurant costs that might just surprise you. We all love a good deal, especially at places like Costco, where prices seem fair. But what happens when business owners turn those deals into huge profits at your expense?
What You Didn’t Know About Restaurant Markups
I noticed a couple at Costco stocking up on bulk items that restaurants typically use—cheap cooking oil, bulk pepper, and low-quality toilet paper. Observing their purchases, I realized they were likely local restaurant owners. These hidden details, like the coarseness of pepper or cheap bathroom supplies, reveal just how far some go to maximize profit while minimizing quality.
Eye-Opening Profit Margins on Drinks and Food
I found out they sold $0.28 drinks for a whopping $2.75, marking up by 163%! With such high-profit margins, it’s no wonder some restaurants close, not from lack of profits but from owner greed. Here, I also explore common reasons restaurants fail—not from a lack of customers, but due to mismanagement, inflated owner expectations, and prioritizing profit over quality.
How to Spot These Tricks When You Dine Out
Next time you’re in a new spot, check the pepper grinder, toilet paper quality, and the cost of simple items like a soda. These small details often reveal the true priorities of the establishment. As a former restaurant insider, I know these “tricks of the trade” and want you to be aware of what you’re really paying for.
Closing Thoughts
Thanks for tuning in to this episode! I’ll be here every Monday and Friday, sharing insights that help you spend your money wisely. Don’t forget to hit subscribe and share this show with friends—it helps the channel grow and keeps this information coming your way.
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I just want you to know that by being
here you're appreciated for your
curiosity always a sign of intelligence
and wisdom which means through you
despite all the crazy there is hope for
the world yet thank you for being
here when you go to Costco probably the
last thing that's on your mind is being
ripped off you might be worried about
spending more than your budget allows
especially considering the hard times
we're living in right now but generally
speaking you're looking forward to all
those good deals especially at the food
court $1.50 for an all beef hot dog and
a drink are you kidding me who the hell
would argue with that well I'm not going
to argue with that but I am going to
make you aware of something going on
there that you may not have even
considered now you might say I have a
curious streak in me and I often
remember and pay attention to things
that most people wouldn't and in my life
it's been both a blessing and a curse
but I'm mentioning this so you'll
understand how it is that I came to know
what it is I'm about to tell
you to my understanding it's common
knowledge that many people who own
businesses such as restaurants shop at
Costco and you can tell this by simply
looking at the items in their shopping
cart a person for instance who has a
very large amount of toilet paper
napkins and margarine is more than
likely to be a restaurant owner
it's especially obvious when they buy
large quantities of cheap cooking oil
and margarine the extremely lowcost and
lowquality food they in turn serve
you in their
restaurants what I just said will allow
me to segue right into the type of
criminality you should be aware
of so there was this man and woman I
noticed at Costco
uh who each had a cart and they were
obviously together both of them had
their cards full of the kind of things
you most often use in a restaurant and
how do I know this you may ask well I
was in the restaurant business for
several years I know a hell of a lot of
the tricks of the trade and apparently
so did this couple it is also one of
several reasons why I got out of the
business I actually rather enjoy having
a clear conscience and being able to
sleep at night something that apparently
can't be said for many restaurant owners
including the ones I just mentioned I'll
explain how I found that out for certain
in a few
moments allow me for example just to
give you this Insight next time you go
into a restaurant that's totally new to
you regardless of the decor the weight
staff or anything else when you sit at
your table look at the pepper
shaker in most cases you'll find the
pepper to be a very coarse grind as I
said this is pretty typical a quality
black pepper will be in a fine grind and
only cost a small amount more than
coarse black pepper but it's speaks
volumes about the owner because more
than likely they're a cheap
skate and cut cost anywhere and
everywhere they can not to keep prices
and cost down yet another lie
but actions solely intended to maximize
thievery pure and
simple the same general rule applies to
many other items they may use for their
restaurant
the second biggest one to look out for
is not just the condition of the
bathroom but the quality of the toilet
paper if the toilet paper is so low
quality and bad that you'd actually
rather wipe your ass with sandpaper I
would strongly suggest finding another
place to give your hard-earned money to
Simply consider this if they don't give
a damn about the quality of their Pepper
or toilet
paper how much quality and love do you
think they're going to put into the
actual
food so now I'll get back to the
original so I was paying attention to
what this couple had in their cart and
one of their items was a variety of
sugar-free drinks I made a mental note
of the case price because I was also
really interested in getting some for
myself which I in fact did so after
doing some quick calculating the price
per drink ended up being less than
around 28 cents which is a good deal
unfortunately the criminal business
owners who like just about all
restaurant businesses owners
today continuously declare their love
for their customers and the way they
demonstrate that love Fest is by having
profit ratios for their food and drink
that would make many corporate minded
entrepreneurs have a financial wet
dreams over in this case profit ratios
that were quite
criminal you
see that couple as it turns out runs a
local Patio Restaurant I know this
because I just happened to run across
them when I was out and about and
remembered them and I also remembered
exactly those drinks they bought at
Costco which they were selling for
$2.75 that's right $2
75 holy Christmas
criminal so remember the drink
originally cost around $28 cents each so
if I'm generous and more than double
that cost to 60 cents each that's still
a whopping profit ratio of around
73% but no that's not enough profit
ratio for the greedy sons of at
$2.75 each that's an obscene profit
ratio of 163%
and that's just for the drink
not including the
food and everybody wonders like it's
some kind of mystery why
restaurants are closing right and
left that's why every time I hear these
thieving bastards whining and bitching
and complaining about how they're not
yet making any
money I can tell you with absolute
certainty it's an absolute
lie the overwhelming number of cases out
there if a restaurant goes out of
business it's mainly for one reason only
greed to which I just gave you a
perfectly good example
of unless we are talking about a case of
extreme physical mismanagement the
business being run into the ground
because of physical mismanagement
such as a let's say you have a
40-year-old uh restaurant owner who in
the last year divorced his wife of many
years and has been banging a 20-year-old
hottie ever since who naturally became
the restaurant's manager and also just
happens to have a heavy cocaine
Habit in the vast majority
of well in the vast majority of cases P
es the restaurant simply cannot afford
the level of profit ratios that the
owner has set it's not material cost
it's not labor it's the fact that they
are so completely arrogant that if the
business is not producing obscene profit
ratios it's simply not worth their
time a lot of business owners especially
restaurant owners tend to have a very
inflated view of the value of their time
and I have dealt with this too many
times to
remember I'm going to wrap this up by
saying this is not the case 100% of the
time and there can be cases with very
odd circumstances that could force a
formally successful restaurant to have
to close their
doors but before you get all teary eyed
as you listen to the violin and piano
music gently in the background as an
10:06
owner explains how he simply cannot go
10:09
on don't forget to check the pepper the
toilet paper and how much he charges for
a
Coke so don't run your restaurant or
life into the ground Park your ass here
every Monday and Friday at 6:00 a.m. on
10:28
YouTube on more the same time and days
10:31
of my podcast please do hit the
10:34
Subscribe and notification Bell as it
10:37
really does help the channel
grow Compliments are great but the best
compliment you can ever give me is to
tell a
friend until next time this is earnest
10:51
and I usually am
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