Independent Restaurant Coalition (IRC) Calls on Lawmakers to Prioritize Main Street over Wall Street as Policy Failures Push Local Restaurants to the Brink of Extinction

Washington, D.C. (February 25, 2026) – Independent restaurants across the country are facing unprecedented strain, driven not by a lack of effort or innovation, but by a convergence of policy failures and market abuses beyond their control. The Independent Restaurant Coalition (IRC) calls on lawmakers to step in now before inaction turns a solvable crisis into irreversible loss for communities nationwide.

Locally owned restaurants and bars operate on average net profit margins of just 3% to 5% in good times. There is no cushion. When food costs rise, equipment prices spike, labor becomes unstable, or fees quietly increase, those costs cannot simply be passed on to guests who are already spending more cautiously. Owners absorb the impact, rework menus, reduce service, or are forced to close. These pressures are systemic and they are accelerating.

Consumers are feeling the same squeeze. Diners are still eating out, but they are searching for value and spending and tipping less than they have in years. Independent restaurants are caught between rising operating costs and tighter household budgets, unable to raise prices enough to survive or cut costs without undermining quality.

At the same time, independent restaurants are competing in an economy shaped by market concentration and policy choices they did not create. Tariffs on imported food, beverages, and essential equipment hit small operators immediately, while large chains are shielded by national contracts. Immigration enforcement has destabilized a workforce that is essential to restaurant operations. Credit card swipe fees and delivery app commissions now rival or exceed profits, extracting value without accountability. Reservation scalping and supplier consolidation add further volatility and cost. 

Restaurants are also being penalized for how they compensate their teams. Under current policy, tipped income is exempt from taxation, while service charges used in place of tipping remain fully taxable, even when they are used to pay wages and benefits. This creates an uneven system that punishes restaurants pursuing more stable, equitable compensation models.

These pressures compound. They do not exist in isolation. The result is a business model under constant strain, even as independent restaurant owners continue to adapt, innovate, and invest in their teams and communities.

“When independent restaurants are asked to compete in an economy stacked against them, the outcome is predictable,” said Erika Polmar, Executive Director of the Independent Restaurant Coalition. “Unchecked credit card fees and delivery app commissions, combined with workforce instability and rising costs driven by policy choices, are erasing already thin margins. Without action, we will continue to lose the local businesses that anchor communities across the country.”

When an independent restaurant closes, the loss goes far beyond one business. Communities lose jobs, gathering places, foot traffic, and economic anchors that cannot be replaced by national chains or digital platforms. Independent restaurants are not just cultural assets. They are local infrastructure.

The Independent Restaurant Coalition is calling on policymakers to act with urgency to restore balance, competition, and fairness. Independent restaurants are not asking for favors. They are asking for a level playing field so they can continue serving as economic and cultural foundations in communities across America.

About the Independent Restaurant Coalition 

In March 2020, the restaurant and bar community formed the Independent Restaurant Coalition (IRC) to save the independent restaurants and bars from the devastating impacts of the COVID 19 pandemic. We continue to fight to create meaningful change for independent restaurants and bars nationwide by providing strong advocacy centered on making sure that independent businesses are being seen, heard and supported by federal policy makers. For more information or to sign up for newsletters, please visit independentrestaurantcoalition.com.