8 Major Restaurant Chains With a Bad Reputation
Reputation, as Warren Buffet once said, takes 20 years to build and five minutes to lose—and few businesses know this better than fast-food chains. In 2019, leading brands like McDonald's, Burger King, and Taco Bell spent an incredible $5 billion on promotion and advertising.
What Buffet's aphorism does not mention, though, is that the rules around reputations work a bit differently for major corporations. While an individual career might be derailed in five minutes by a scandal or controversy, a "ruined" reputation is, for a billion-dollar company like McDonald's or Starbucks, survivable.
For Pete's sake, isn't the McDonald's of 2022—the one that recently reported $23 billion in annual revenue—the same McDonald's that all but admitted in 2012 that it was selling its customers "pink slime" burgers? Far from the be-all and end-all it might seem to be, reputation is, for the biggest fast-food brands, just another annual expense.
So here's a look at nine fast-food chains with damaged, sullied, or lost reputations. Has it actually affected the business?
For more fast-food news, check out 8 Worst Fast-Food Burgers to Stay Away From Right Now.
Starbucks has been getting flack recently for increasing prices on popular menu items. The price hikes have been seen as evidence of "corporate greed," following Starbucks' announcement of profit growth of 31% in the most recent quarter.
Price gouging aside, the coffee chain has also come under criticism for its handling of unionization votes at several of its stores in Buffalo, N.Y. (an effort which has since spread to 54 other Starbucks locations in 19 states). According to store employees in Buffalo, Starbucks attempted to influence the outcome of union votes through a number of underhanded tactics, including intimidation of employees, vote packing, and store closures.
Chick-fil-A is the golden child of the fast-food industry. For the past seven years, the chain has topped the American Customer Satisfaction Index, outpacing the industry average last year by a full five points, and in 2020, it was the third-largest chain in the U.S. by systemwide sales, reporting over $12 billion.
At the same time, the company's reputation has been and continues to be compromised by its association with the anti-LGBTQ cause. The chain first made headlines in 2012, thanks to news of over $5 million in donations to groups opposing same-sex marriage. Almost a decade later, the issue came up again, with Chick-fil-A's founder being tied to the National Christian Charitable Foundation, a group that has worked to undermine the Equality Act.
Although Chipotle is successful in terms of sales (the company reported $2 billion in revenue in its most recent quarter), its reputation has been marred in the past decade by recurring food safety problems.
Flying in the face of its "Food with Integrity" slogan, the chain suffered a series of foodborne illness outbreaks caused by Norovirus, Salmonella, and E. coli, which sickened more than 1,100 people between 2015 and 2018. Chipotle's negligent attitude toward maintaining health standards was serious enough to warrant criminal charges—the Justice Department charged Chipotle with violating federal law by adulterating food.
Jack in the Box
With perhaps one of the worst reputations for food safety, Jack in the Box was at the center of a massive E. Coli outbreak in 1993. Contaminated patties at Jack in the Box restaurants in Washington, Idaho, Nevada, and California caused the deaths of four customers and the hospitalization of 171.
Somehow, Jack in the Box still has a name in the restaurant industry, reporting its highest profits in 27 years last February.
A perpetual runner-up, Burger King was ranked America's least favorite fast-food chain in 2020, following a study on customer sentiments from Twitter. It's a brand that has sort of lost its way (and is losing its sales) and has developed something of a reputation as an also-ran.
Burger King was mocked in late 2021 for jumping on the "celebrity meal" trend, and its attempt to position itself as an LGBTQ-ally and opponent of Chick-fil-A was met with skepticism (Burger King having, itself, a poor record on LGBTQ rights).
By the numbers, Subway is doing just fine. The chain is the eighth largest in the U.S. by sales, and has reported its best sales in eight years last August, following a menu revamp. In the court of public opinion, though, it's a different story.
The sandwich chain has been drifting for a few years now, following the death of its founder, Fred DeLuca, in 2015. Lack of original leadership has translated into declining standards, with Subway losing five percentage points in its score last year on the American Customer Satisfaction Index. To say nothing of the recent scandal involving its tuna, the chain has also been routinely criticized for its treatment of franchisees.
BurgerIM's reputation took a turn for the worse in 2019 when it came to light that the burger chain was, more or less, a Ponzi scheme. The "gourmet burger" company expanded rapidly in the late 2010s, generating buzz with the opening of 200 stores in just three years—and then onboarding an additional 1,200 franchisees at $50,000 a pop.
When the franchisees realized that they'd been sold a bill of goods, they sued en masse, with BurgerIM eventually capitulating in early 2021, refunding the contracts for "pennies on the dollar." The chain is under new ownership now but some of its locations have gone rogue and rebranded with different names.
The beloved West Coast brand is one of the most successful in the fast-food industry, ranking among the top thirty-five largest brands by revenue in 2021 (an incredible feat, considering the entire In-N-Out system consists of just 361 stores).
And while business is booming, the chain has also suffered a backlash in the past year, following its refusal to adhere to Covid safety policies in its home state of California. In-N-Out restaurants in San Francisco and Contra County were temporarily shut down in late 2021, after refusing to comply with proof-of-vaccination requirements
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