I06-08

Question

In the 1920s and 1930s, many well-known chain restaurants—such as  Horn & Hardart ,  Howard Johnson’s ,  A&W Root Beer ,  Bob’s Big Boy ,  Dairy Queen ,  White Castle , and  Marriott Hot Shoppes —emerged in urban areas as walk-up lunch rooms, cafeterias, and hamburger stands. These early chains primarily served urban working populations. As suburban development and automobile travel increased by the mid-20th century, many chains adapted their layouts to include parking and drive-in service. Some new chains also appeared during this period, explicitly targeting automobile-based customers. These changes in design and audience contributed to a shift in how dining out was perceived, turning it from a work-related necessity into a form of entertainment.
 
In the 1950s, chain restaurant growth accelerated with the widespread use of the franchise model, originally developed by  Howard Johnson  in the 1930s. This model was successfully adopted by companies such as  McDonald’s ,  Kentucky Fried Chicken ,  Domino’s ,  Long John Silver’s ,  Burger King , and  Sonic . Unlike earlier centralized corporate chains, the franchise system allowed local owners to operate individual restaurants under contracts that standardized building design, menus, and service style. These agreements emphasized consistent quality and helped overcome the challenges of managing geographically dispersed locations.From the 1950s to the mid-1980s, the number of restaurants in the United States increased substantially. There were 127,000 restaurants in 1954 and 135,000 in 1967; by the mid-1980s, that number had more than doubled. By 1983, fast-food restaurants accounted for 40 percent of all U.S. restaurants, and Americans ate out an average of 3 to 4 times per week, spending 40 percent of their food budgets on meals prepared outside the home.
 
Breakfast-focused chains such as  IHOP ,  Perkins ,  Waffle House , and  Dunkin’ Donuts  began to expand in the 1960s. These initially catered to commuters and shift workers but soon attracted broader audiences, including families and teenagers seeking leisure activities. Later, traditional lunch-focused fast-food chains such as  Hardee’s  and  McDonald’s  added breakfast offerings in the 1980s, followed by coffee chains like  Starbucks  in the 1990s. These additions helped establish breakfast as a routine meal eaten outside the home.
 
The following chart shows how the share of total food spending on food away from home (FAFH) changed relative to food at home from 1987 to 2017.
 
 https://gmatclub.com/gmat-focus-tests/resources/import/img/I06-08.pngWhile restaurants are the largest source of food away from home (FAFH), Americans also purchase food from other venues, including sporting events, entertainment sites, hotels and motels, schools and colleges, retail stores, and vending machines. These outlets offer foods similar in type and nutrition to restaurant meals, but food service is not their primary purpose. In these cases, food may be purchased either to satisfy hunger or as a convenience while engaging in another activity.
 
From 1987 to 2017, only two FAFH sectors increased their share of total FAFH expenditures: restaurants and recreational places (such as movie theaters and sports venues). Recreational places rose from 2.1% of FAFH in 1987 to 3.6% in 2017. All other non-restaurant sectors—hotels and motels, schools and colleges, retail stores, and vending machines—declined as a share of total FAFH spending during this period.

Bunuel · Answer

Official Solution:

Early chain restaurants in the first half of the 20th century were largely focused on serving working populations in city settings. 
 
• Tab 1 states that many early chain restaurants, including walk-up lunch rooms, cafeterias, and hamburger stands, emerged in urban areas and served working populations. This expansion took place during the 1920s through the 1950s, which aligns with the first half of the 20th century. Supported.
 
 New franchised restaurant chains were regularly established throughout the 20th century. 
 
• Tab 1 discusses the development of the franchise model only starting in the 1930s and its expansion only beginning in the 1950s. Thus, there is no information provided to support the claim that new franchised chains were regularly established throughout the 20th century. Not supported.
 
 Most restaurant franchise chains in the 20th century were created specifically to serve automobile-based customers. 
 
• Tab 1 states that  many existing  chains adapted their layouts to include parking and drive-in service, and that  some new  chains were created with automobile-based customers in mind. However, it does not state or imply that  most  franchise chains had this focus. Since the statement overgeneralizes from limited information, it is not supported.

Correct answer:

Early chain restaurants in the first half of the 20th century were largely focused on serving working populations in city settings.  "Supported"

New franchised restaurant chains were regularly established throughout the 20th century.
  "Not supported"

Most restaurant franchise chains in the 20th century were created specifically to serve automobile-based customers.  "Not supported"

Bunuel · Answer

This MSR question and its solutions have been completely revised and improved.

I06-08

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Supported	Not supported
		Early chain restaurants in the first half of the 20th century were largely focused on serving working populations in city settings.
		New franchised restaurant chains were regularly established throughout the 20th century.
		Most restaurant franchise chains in the 20th century were created specifically to serve automobile-based customers.