For the past several years, QSR operators have dealt with rising inflation. As food, labor, and occupancy costs have grown, QSRs have had to stay disciplined on pricing, efficiency, and margins.
That pressure hasn’t gone away. But another cost is starting to show up across the industry, one that can behave very differently from the rest: fuel.
Fuel isn’t something most QSR operators track directly, but it runs through several key expenses. Unlike food or labor, fuel costs can be volatile. They don’t follow the same steady pattern as other inputs, and fuel’s position in the supply chain can impact businesses more quickly than other factors.¹
A cost that shows up across the business
Fuel prices have the most visible impact on the cost of supplies and the cost of distribution. When gasoline and diesel prices rise, so do the costs of transporting ingredients, packaging, and supplies to the store. Those increases tend to show up in an operator’s P&L, even if underlying food costs haven’t changed.
Delivery is another pressure point. Off-premises ordering remains a meaningful part of the QSR model, and fuel costs directly affect the economics of each order. When those costs move higher, margins on delivery orders can tighten quickly.
What it looks like at the unit level
Consider multi-unit operators with a mix of suburban and highway locations.
As fuel prices rise, they’ll likely start to see freight surcharges added to their suppliers’ invoices. At the same time, their delivery costs could start edging up and driver availability may become less consistent.
On their own, these changes may not have a dramatic impact. But together, they can compress margins, especially on high-volume delivery items like combo meals, chicken orders, and family bundles where pricing is already tight.
In response, operators will typically adjust their operations: updating select menu prices; scaling back lower-margin promotions; tightening inventory; and delaying nonessential capital spending. Given the fluctuating nature of fuel prices, operators may need to make these decisions much more frequently to keep their financial performance on track.
Consumers get pinched, too
Of course, rising fuel costs don’t just affect operators. Consumers feel the pinch, too.
Gas is one of the most visible household expenses. According to the U.S. Bureau of Labor Statistics, the average U.S. household spent $2,400 on gasoline in 2024, equal to about 3 percent of a household’s total annual budget.1
Even modest increases in fuel prices can affect spending decisions. These increases influence how often people dine out, what they order, and how far they’re willing to drive for a meal.
Customers who are more cost-sensitive may consolidate trips, lean toward lower-priced items, or seek promotions as their fill-up prices increase.
How operators can better plan amid rising fuel prices
Unlike food or labor, fuel costs can move quickly. They don’t always follow the more deliberate pattern as other inputs, and their impact is more difficult to anticipate.¹ When costs become volatile, planning becomes less precise and forecasts may need to be revisited more often.
Ultimately, this shortens the planning horizon. Operators must place more weight on flexibility and keep their options open on pricing, inventory, and capital timing.
Rising fuel costs also make it challenging to balance margins amid fluctuating customer store traffic. Instead of broad price increases, QSR operators must be more targeted in how they manage pricing and promotions. At the same time, better inventory control, tighter labor scheduling, and smoother kitchen operations can help offset cost pressure that can’t be managed directly. Maintaining liquidity on the balance sheet is also a critical part of navigating pricing volatility.
A different kind of cost pressure
Fuel costs can add another layer of uncertainty to inflation and ultimately impact how QSRs are managed. Operators who can stay disciplined while adjusting to fuel price changes quickly will be better positioned to manage what comes next. Fuel may be only one part of the cost structure, but it has become one with a truly immediate impact.
Footnote
- U.S. Bureau of Labor Statistics. Consumer Expenditures – 2024. December 19, 2025
Mark Wasilefsky is the Head of the Restaurant Franchise Finance Group at TD, where he leads the bank’s efforts to support growth, acquisitions, and innovation in the restaurant and franchise sectors. He brings over two decades of experience in investment and commercial banking, with a deep specialization in franchise finance. Before joining TD, he was senior vice president at RBS Greenwich Capital. Mark holds an MBA in Finance from Western New England University and a BA in economics from the University of Connecticut.
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