Investors Face Challenges in Fast Food

Fast-food workers in New York City staged a walkout yesterday, requesting higher wages and the right to unionize. Their current wages are $8.90 per hour on average; they are requesting $15 per hour. This would be a dramatic jump that would increase costs significantly for franchisees, and while $8.90 may be a very difficult wage to live on, investors are going to want to watch how these extra costs are managed or passed on to consumers, if the protestors' higher wage demands are met. Meanwhile, three analysts downgraded Yum! Brands (NYSE: YUM  ) , owners of such restaurants as Taco Bell and KFC, which caused shares to drop 9%. Here, Motley Fool analyst Blake Bos tells us that the company's fundamentals are still intact and that it has reaffirmed guidance, but expectations may have been too high.

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