Over the last year, we’ve seen quite a few examples of how politics affect restaurants. Changing U.S. federal policies in areas like immigration, global trade, and state/city level debates on minimum wage laws, among other things, have created new challenges for restaurant owners, operators, and employees. On the other hand, new policies such as the No Tax on Tips rule will likely benefit restaurant owners and workers alike.
We may not have much control over what goes on in Washington, the state capitol, or city hall, but we can control what happens in our own restaurants. So what can you do to navigate the restaurant business challenges and take advantage of the opportunities that can come with major policy changes? We’ve got a few tips below.
But first, let’s consider a recent example of how politics affect restaurants.
In the fall of 2025, we endured the longest federal government shutdown in U.S. history. With nearly 1.4 million federal employees either furloughed or working without pay, the 43-day shutdown was especially hard on restaurant owners in Washington, D.C. Without the federal employees on lunch break, without the happy hour crowd, without the usual flow from out-of-town visitors – restaurants in the nation’s capital lost a tremendous amount of business.
The shutdown may be over, but it showed us clearly how politics affect restaurants, regardless of your political affiliation. If you own a restaurant in the capital, the shutdown was difficult no matter who you voted for. This is just one example of how political events can create restaurant business challenges.
As Back of House Director of Marketing Hilary Young points out, “Politics have seeped into so many different industries, and the hospitality sector is included.” Among other issues, Hilary cites changes to local minimum wage laws, new tax-on-tip rules, and federal immigration policies, observing that “so many political decisions are forcing restaurant operators to make difficult choices every day.”
A number of federal policies and initiatives enacted in 2025 have had a direct impact on the restaurant industry.
Altogether, these conditions are impacting labor supply and food cost, as well as increasing revenue risk.
We don’t have much control over outside forces like government shutdowns and immigration policies. But there are a lot of internal forces that we can control. With a little creativity and the right technology, you have the power to offset some of the biggest restaurant business challenges our industry faces today.
Adding catering to your arsenal can be a great way to add a sales channel and improve profitability. There is an enormous opportunity in catering, especially for restaurants that already have the kitchen space and equipment to do it. Expert Market Research forecasts that the catering industry will almost double in size over the next ten years, topping $140 billion in revenue by 2035.
We spoke about catering a few months ago with App8 CEO Elias Hage. App8 is an innovative platform that can help restaurants automate their catering operations. Elias told us that catering offers a few major advantages over traditional restaurant service, especially as restaurants look for ways to push back against shrinking profit margins.
“With catering, your ticket size is going to be much larger. And the net profit margin on a catering operation and order is 50% to 100%, so it can be up to double that of your average restaurant operation,” Elias explained. At a time when tariffs are cutting into already-slim margins, adding catering to your business could be a game changer.
Consumers are feeling their own cost pressures and making different decisions on when and where they eat out. Many restaurant owners are seeing a slowdown in foot traffic as a consequence. Hosting private events can be a great way to reverse this trend for your restaurant. After all, says Hilary, “No matter your politics, people are still looking to celebrate milestones, birthdays, anniversaries, and other special occasions in a group environment.”
Tripleseat’s Chad Wozniak agrees. The VP of Sales for the all-in-one event management software company explains that “The benefit of booking events for restaurants is that no matter how large or small your business is, every restaurant has an opportunity to increase its throughput, even during off-peak times.”
Event hosting can also be a great way to bring more predictability to your operation. As Hilary explains, “With events, restaurants have lead time to plan and prepare their orders, which means there’s far less guesswork involved in food inventory management.”
Loyalty programs work…if you use them correctly. Pocketbook pressure, price increases from tariff and trade policy, and personal values are causing people to think twice about how they spend their money. So how can you convince them to spend their money in your restaurant? A good loyalty program can be one of your most powerful tools of persuasion.
“People love getting discounts or free things,” Hilary points out. “Even if they don't actually need those things, they will go out of their way to make sure those freebies or savings don't go to waste. If people know that they'll get a free bottle of wine upon the 10th visit to your restaurant, they'll choose you over a competitor.”
Research from the National Restaurant Association (NRA) supports this observation. The NRA says consumers are more likely to spend money in your restaurant if they feel like their interactions are being recognized and rewarded. The NRA reports that 78% of customers said they were more likely to visit a restaurant where they could earn points.
And that’s just one way you can use your loyalty program. There are all kinds of loyalty program options to choose from. Look for options that provide some of the following:
At a time when high costs are causing consumers to pull back on spending, be proactive about getting your regulars through the door.
Immigration and border policies have disrupted the labor supply for the restaurant industry. According to the Center for Migration Studies, nearly half a million undocumented immigrants work in the U.S. as servers and cooks.
Current border policy and enforcement has reduced the number of people from this traditional pool of restaurant workers who are coming into the U.S. At the same time, a higher rate of detentions and deportations is cutting into the size of the current restaurant workforce.
For restaurants that are struggling to fill in the gaps, automation may be able to help. For instance:
In each of these examples, the goal is to automate tasks that can be handled by machines so that human workers in short-staffed restaurants can focus on more meaningful tasks like cooking and customer service.
Tariffs have created new cost and supply chain issues for restaurants. Combine this with state-level politics protecting specific industries or environmental policy goals, and the price of ingredients is more unpredictable than it ever was. Menu engineering can help you offset these costs and uncertainties.
But menu engineering is about more than just a few creative updates. It’s really about using data-driven insights to make key strategic changes to your menu.
“By taking an analytical approach to your food inventory, you can strategically plan your menu around what will sell and you can remove what typically goes to waste,” says Hilary. “With the right technology, you can actually forecast best-sellers based on a variety of factors and make smarter menu choices.”
As long as food cost uncertainty continues to impact your profit margins, one of the best things you can do is look for potential causes of waste in your own menu. “In the end,” says Hilary, “less waste always improves your bottom line.”
Policies and administrations change all the time. The real key to survival is finding ways to adapt and drive business, no matter who’s in charge. We believe the right tools and technology can help you stay nimble and profitable regardless of how politics affect restaurants.
Schedule your free, personalized consultation with one of our Back of House technology experts today and we’ll figure out exactly what you need to succeed in any environment.