Impact of Zoning and Regulations on Fast Casual restaurants

 I just got off the phone with a 10 unit fast casual franchisee going on a 20 minute rant on the impact of Obamacare. He calculated  that it will cost him an extra $500,000 a year or 3-4% of his net income. His margins are only 7-9% so this is significant hit to his bottom line. That $500,000 equates to 2-3 new units he won't be able to open since it costs him about $200,000 in cash to open a new restaurant.  Obamacare is particularly punishing to small restaurant chains and retailers and will kill jobs.  It's not easy to raise prices and pass the costs on to the consumer, but that will happen to some extent.  The result is a slowdown in new restaurant openings or slower rate of growth.
      In addition, more cities are passing new zoning regulations to prevent restaurants from operating a drive thru lane.  This makes it difficult to find new locations for fast food and fast casual chains.  In Ft. Worth, TX the new MU-2 zoning in many dense urban areas of the City require 2-3 story buildings on the street with parking behind and drive thru hidden making it very difficult to make a drive thru work. In Dallas the City is working on an overlay District on 450 prime acres at Valley Mall and Galleria at Preston and LBJ that totally eliminates drive thru.  Also, in Arlington, TX  the City is creating an Entertainment Overlay District on 2,800 acres around Cowboy Stadium and Ranger Stadium at I-30 and Collins that also eliminates all new drive thru restaurants. Some restaurants receive 40% or more of there business from the drive thru lane so this will significantly affect sales.
    The small business franchisees are a major driver of job growth in this country. Increased regulations will curb that growth.