Washington is calling out private equity-funded restaurant chains

Sen. Elizabeth Warren (D-Mass.) has turned restaurant food quality into a policy talking point. In a video titled "Why Food Chains Taste Worse and Cost More," she argued that private equity ownership has contributed to a decline in quality at many large U.S. restaurant chains, naming Jersey Mike's, Subway, Panera, and TGI Friday's. The video drew about 100,000 combined likes across Instagram and Facebook, according to the report. Restaurant Business Magazine, which first reported the story, observed that Congress rarely targets restaurants by name over product quality; lawmakers more often address labor issues, such as Sen. Bernie Sanders' support for Starbucks baristas seeking a union contract.

The centerpiece of Warren's argument is Jersey Mike's, which Blackstone acquired in 2024. Warren said customers subsequently complained of smaller portions and lower-quality ingredients even as prices increased. The article notes a counterpoint: Jersey Mike's franchisees set their own prices, and CEO Charlie Morrison said in late 2025 that the company had made a "deliberate decision" to rely less on price increases. Warren's framing follows what she described as the private equity playbook of buying a business, adding debt, cutting costs, and distributing profits to investors.

Warren used the video to promote the Stop Wall Street Looting Act, first introduced in 2019 and reintroduced in September 2026 by Warren and a group of congressional allies. As described, the bill would hold private equity firms liable for the debt of companies they acquire, close PE tax loopholes, and restrict firms' access to acquired companies' public funds, including 401(k) plans, among other provisions. The article reports mixed reactions from the business community. Separate legislation targeting private equity's influence in the housing and healthcare industries is also under consideration.

The article cites several restaurant examples to support the broader concern: Red Lobster's bankruptcy, which it attributes in part to decisions made under former owner Golden Gate Capital; two Friendly's bankruptcy filings under Sun Capital; the closure of Sprinkles Cupcakes 13 years after founder Candace Nelson sold it to private equity; and Panera Bread's shift away from baking bread in-house under JAB Holding. The publication characterizes the situation as a catch-22, in which restaurants need outside funding to grow but may face cost pressures and quality trade-offs. It suggests the proposed legislation could provide regulated funding that preserves quality, reasonable prices, and avoids bankruptcy, though it presents this as an assessment rather than a conclusion.