It's not just the peanuts, but when you compare local hole-in-the-wall joints and chain restaurants, folks have to realize that a huge chunk of the money they are paying at a chain is going towards advertising costs and expensive real estate, instead of food and labor costs. Food and labor costs contribute to overall quality, where as advertising and real estate do not. The hole in the wall place may be off your beaten path and harder to find, but that just means their expenses are focused on food and labor (it also means they are probably more likely to go out of business but that's another matter). If I ever moved to another part of town, I'd leave the food the same, just charge more to cover the crazy high mortgage. Current location does limit prices, of course (I'm way cheaper than chains like 5G and Waffle House across the board but still catch flack about prices because of location).
And the labor cost factor is very important. You go to a chain and you are dealing with kids that don't give a ####. They move on, you rinse and repeat with new underpaid workers that don't give a ####. Meanwhile, I've go a staff that averages about 20 years of experience. They are preparing your order when they see the car pull up and want to know how "your mom and dem" are doing. It's a whole different ball game.
I get people asking about expanding and adding locations all the time, but I really can't imagine doing it without raising prices, along with cutting quality and wages. I've got no interest. I know I'll never get rich doing it this way, but that's fine. I'm a simple man. I just love my job and want to keep it.
Anyway, sorry for the tangent. I'm a little drunk already because I've got to get up and go to work at 5AM on my "day off" tomorrow. Point is, you find a hole in the wall that's out of the way, and it's probably really good food at a great price for a number of reasons.