[crowcroft]

Not entirely relevant to the article, but another factor that is rarely discussed. You need to assume people know about both widget companies.

You often see a McDonalds or Wendy's outcompete lower price/higher quality alternatives, simply because it's a brand people can recall.

[gowld]

What is lower price than McDonalds or Wendy's for a substitutable good

Economy of Scale is powerful.

[cogman10]

There's a weird thing happening in the US where all the restaurant suppliers have consolidated. What that means is you likely won't see competitive prices anywhere else not due to scale but due to the input price being fixed regardless of who you are.

I believe McDonalds is still somewhat independent in it's sourcing. IDK about wendy's. But Burger King is absolutely just another Sysco reseller at this point.

That means a lot of the smaller burger stands end up just selling the same stuff as every other burger stand. Food that tastes a lot like my high school cafeteria did (hint, also Sysco).

The only real lever any food business can pull is in facilities and staffing. The price of the food is fixed and there's no real competition to be had.

[yndoendo]

The city I live in has number of locally owned restaurants that easily compete against McDonalds and Wendys price point. I find the quality of food to be better.

Lack of communication to outsiders and visitors about those that compete against such establishments is key. The larger organizations have more capital to advertise and help capture that economic arena.

Personally, when I travel, I go out of my way to find local establishments over large franchises because the former slowly siphons out the local economy to some CEO that gets paid millions. The latter helps keep the competition local economy health. I haven't given Starbucks a penny in over 7 years and plan to never fund their organization ever again.

[crowcroft]

I find this less true where I live (New Zealand) where there are a lot of small takeaway shops that are often competitive on price.

In general though the ease at which the market can recall a brand has a direct connection to market share, loyalty and in turn pricing power.

https://en.wikipedia.org/wiki/Double_jeopardy_(marketing)