also with the fat and cholesterol content of
the items offered by fast-food restaurants. As
a result, restaurants are changing their menus
and product offerings to emphasize, or
deemphasize, the benefits of their products.
In an effort to lure customers,
McDonald’s launched the new McLean
Deluxe, a burger that boasted only 9 percent
fat because of the use of seaweed substitutes.
Although purportedly healthier, the new
item costs the consumer a $0.20 premium
over the usual quarter-pounder, which has
twice the fat. McDonald’s also followed the
lead of other fast-food restaurants by switch-
ing to 100 percent vegetable oil from a blend
containing beef tallow for cooking fries and
hash browns. Encouraged by consumer
acceptance of these products, McDonald’s re-
placed its ice cream with low-fat yogurt,
introduced low-fat milk shakes, and even
added cereal and bran muffins to its menu. In
June 1991, McDonald’s introduced, as limit-
ed time promotional items, a 90-calorie Diet
Coke float and a 275-calorie grilled chicken
sandwich. Other fast-food restaurants, such
as Burger King and KFC, have also changed
their product offerings to cater to consumers’
health concerns. These changes reflect the
need of fast-food restaurants to change in
response to the needs and concerns of a
changing population.
Governmental Legislation
Teen Labor Laws.The fast-food industry
must also deal with changes in the legislation
that affect it. One such area of legislation is
teen labor laws. Current legislation prohibits
14- and 15-year-old persons from working
on school nights after 7:00 p.m., a time
when restaurants usually need a full staff to
deal with the dinner crowd. Representatives
in the industry have been advocating changes
in these restrictions to permit teenagers (1)
to work a maximum of four hours on days
before school days, one hour more than cur-
rently allowed, and (2) to work until 9:00
p.m. on school nights, two hours past the
current restriction. Industry advocates are
also seeking an extension of the cooking and
baking activities these workers are legally
permitted to perform. These proposed
changes would help ease the pressures on
restaurant managers who are attempting to
deal with the limited workforce. However,
the industry’s lobbyists met much resistance.
In fact, several legislators were seeking to
enact certain bills that would increase the
pressures on the fast-food industry’s hiring
practices. One proposed bill would substan-
tially increase penalties for serious infractions
of federal teen labor laws to include prison
terms for employers whose willful violations
resulted in the serious injury of a teenage
employee. Another provision of the bill
sought a requirement that all applicants
under the age of 18 secure a state-issued
work permit if they do not possess a high
school diploma. Industry representatives
believed that regulations such as these would
decrease the number of teenagers hired,
thereby hurting the exact individuals whom
the laws were designed to protect.Federal Minimum Wage Hike.Legislation
in other areas may also affect the fast-food
industry. On April 1, 1991, the federal mini-
mum wage rose from $3.80 to $4.25, with a
subminimum exception for persons who
have never before held a job. Payroll expens-
es generally account for 26 percent of all sales
dollars. According to a survey conducted by
Oregon State University, fast-food outlets
were relatively unscathed because the major-
ity of their employees already earn between
$5.50 and $6.00 an hour. Although full-serv-
ice restaurants were hit the hardest by this
legislation, labor is the second-biggest cost
for all restaurant operators.Mandated Health Plans.The food service
industry also faces an increase in labor costs
from legislation related to mandated health
plans. Legislators are pushing for a bill that
would require employers to provide all their
employees with health insurance or face a
special payroll tax of 7 percent to 8 percent.
The special payroll tax would then be used to
fund a federally administered insurance pro-
gram for low-income Americans. If enacted,
the industry feared that many small restau-444 ENTREPRENEURSHIP CASE