External audit 2.

Political

These factors determine how much the business is affected by government policies. It could be the
health and safety laws, taxes, trade policies, labor laws, environmental laws, trade restrictions, or any
number of other laws.

- Government can have a significant impact on business, particularly large corporations. And every
business should carefully consider the business decision and the candidates who support or oppose the
fast food industry. Some political action taken by various government departments may result in
regulations that affect companies in a variety of ways, including menu, payroll, customer satisfaction,
profits, and some standers. Fast food companies are typically concerned with the rule-making process in
order to become more acquainted with some closely related rules. Furthermore, fast food companies
typically prefer political candidates who will benefit their development and will vote for them in order to
have a voice in issues affecting the industry, such as nutritional labeling, obesity-fighting programs,
minimum wage increases, and affordable housing.

Economic

Businesses can use these factors to plan their short- and long-term objectives. Economic growth,
interest rates, exchange rates, inflation, consumer purchasing power, and other factors are all examples
of economic factors.

Fast food restaurants remain strong, a number of economic factors can have a significant impact on the
bottom line.

• labor costs - Many fast food workers are paid an hourly wage that is equal to or slightly higher than
the national minimum wage. Activists across the country are fighting to raise the minimum wage,
claiming that even working 40 hours a week, employees cannot live on such low pay. If a significant
increase in employee pay is mandated, this could have a significant impact on fast food company profits,
menu prices, or both.

• fuel prices - When fuel prices rise, suppliers raise the prices of essential items at fast food restaurants
to cover the increased transportation costs. Customers often pay higher menu prices as a result, as
restaurants must make a certain profit margin to cover operating expenses.

• economic decreases - Restaurants are affected by economic downturns, but fast food restaurants are
less affected because many people choose upscale options instead. According to "The Economist" in
2010, fast food restaurants did a better job of coping with the recession in 2008 than their more
expensive rivals. During a recession, many customers choose more cost-effective dining options to
better fit their budgets.

• price of key ingredients - Because price increases for fast food menu items are typically short-lived,
restaurants typically absorb the increased costs. Even if high prices only last for a short time, this can
have a significant impact on profits at the bottom line.

Social

This factor includes sociocultural factors that aid businesses in developing a supply-demand model.
Traditions, cultural values and beliefs, population growth, age distribution, career outlook, and other
factors are among them. Companies can also determine a potential market by studying these factors.

•Customers' actions in relation to both the international and local markets are complex.Customers
readily adopt or accept fast food chains' dynamic or contemporary behavior. The fast food industry is
heavily influenced by health and lifestyle trends. Restaurants are under pressure to introduce low-
calorie, healthy dishes as a result of customers' shift toward healthy and clean eating as a means of
staying in shape. People's awareness of health has grown significantly thanks to social media

Technological

The technical parameters encompass a variety of factors that influence a company's production,
distribution, and communication processes, including innovation, automation, and technical awareness.

•These technologies are reshaping the way fast food restaurants serve their customers just a few
decades later, during the era of ubiquitous connectivity and the Internet of Things. We can already see
how these companies are combining technologies to create new experiences for their customers in
response to the way that their customers are living their lives. In essence, technology is making it
possible for customers to get their fast food even faster.

The fast food industry has benefited from a few technological advancements over the past few years.
We are beginning to see instances of restaurants utilizing technologies to enhance customer
engagement and experience.

Environmental
The ongoing environmental crisis has increased public awareness of environmental issues. These include
raw material scarcity, recycling, pollution, carbon footprint, and others. Companies must follow the rules
because the key to success is sustainability.

• The fast food industry has harmed the environment greatly. Since the majority of products sold in the
industry are based on meat, like chicken burgers, more and more animals need to be raised for meat
and eggs. Because animal excrement contains gases that contribute to global warming, large-scale
animal keeping is unquestionably harmful to the environment. Another drawback is that these animals
must be kept on vast tracts of land that have already been cleared. The ecosystem is harmed by this.
Overgrazing also has an impact on the productivity of the land. Another drawback is the amount of
packaging that comes with fast food, especially takeout. In addition, lifestyle diseases are becoming
more prevalent. The people don't have enough time to prepare meals because they live a busy life.

Legal

This legal factor of the PESTEL analysis includes factors related to advertising, consumer rights, health
concerns, and product safety. A legal matter arises when government policies are broke

• Legal considerations are crucial to the restaurant industry, particularly for global operations.
Businesses' growth and expansion strategies must also change in response to the changing legislation.

• Product safety falls under the legal factors of food quality and hygiene. These are two essential factors.

•The restaurant industry must take into account not only safety standards but also the minimum wage
and employee welfare if it wants to grow consistently in any given environment.