California's $20 Minimum Wage Strains Fast Food Franchise Owners

California's recent implementation of a $20 minimum wage for fast food workers has placed significant financial strain on franchise owners across the state. Many operators are grappling with the need to reduce employee hours and cut jobs to manage increased labor costs. Lawrence Cheng, a franchisee managing several Wendy's locations in Southern California, shared that he has had to reduce his staff from over a dozen to just seven for afternoon shifts, often stepping in to cover shifts himself to maintain operations. The challenges posed by the wage hike are not unique to Cheng. Scott Rodrick, who owned a McDonald's at Stonestown Galleria near San Francisco, recently closed his business, attributing the decision to the economic pressures exacerbated by the wage increase. He noted that the combination of California's changing economic landscape and new legislative mandates severely limited his restaurant's ability to survive. Other fast food establishments, including Red Lobster and Arby's, have also shut down locations in response to similar pressures. Juancarlos Chacon, who operates nine Jersey Mike's locations in Los Angeles, has been forced to raise menu prices and adjust staffing schedules to prioritize busier lunch hours. He expressed that this was the first time in his 25 years in the industry that he felt compelled to increase prices so significantly. Customers are also feeling the impact, often opting to remove items from their orders to cope with rising costs. The $20 minimum wage for fast food workers in California stands $4 above the average wage for other industries in the state and more than double the federal minimum wage of $7.25, highlighting the growing divide in labor costs across sectors.