Once signed into law California will have the nation’s first Fast-Food Council. [Opinion]

If you are a fast-food junkie, take notice. Your value menu is about to see another big price increase.

Assembly Bill 257 which will allow a panel to set wages for workers in the fast-food industry is headed to Gov. Newsom’s desk for signature.

Once signed into law, California will have the nation’s first Fast-Food Council. Organizers sought to give workers say and improve working conditions and wages in this new legislation.

Yes, many of the fast-food jobs pay entry level or minimum wages. Those that own a fast-food franchise invest millions of dollars in the purchase of land, building and maintenance of the restaurant and yes in employees.

As a former Vice Chairman & Executive Vice President and Chief Administrative Officer of a corporation with multiple brand name franchises such as Duncan Donuts, Del Taco, Burger King, Subway, Dairy Queen, Denny’s, and others, I can tell you that the industry is already heavily regulated by various state and local government agencies. This new law just adds another layer.

Since my retirement five-plus years ago, the industry has changed. Since COVID hit, finding workers has also become more difficult. With the worker shortage, wages were voluntarily raised. In many cases those wage increases remain significantly higher post-COVID.

As consumers, we have also seen record inflation drive up the cost of your favorite menu items. A Big Mac, donut, cup of coffee, submarine sandwich, bean & cheese burrito, or a kid’s meal have also cost you at least 20% more.

Inflationary cost increases become “a pass through” and as you pull up to the drive-thru window you pay more. Now the question is how much more Assembly Bill 257 will cost the franchisee and independent owners of fast-food restaurants?

Despite what some think, owning a franchise is very hard work. This means long hours for the franchisee or independent owner. It means paying property taxes, income taxes, regulatory fees, and wages for employees, franchise fees, and some franchise owners provide generous medical benefits.

For decades, In & Out Burger has set the high standards for wages and benefits of its team members, and it shows in product, quality and popularity. Privately held since its inception in Baldwin Park, California they live up to their slogan “In & Out, it’s what a hamburger is all about.”

How expensive your Dairy Queen Dilly Bar becomes is too soon to tell. The full effects of this new law will take time to be felt by owners and consumers like you and me.

No doubt having team members at the table is a good thing. I have found some of the very best ideas to improve operations and safety often come from the team members doing the work and not the corporate offices.

One former law maker told me, “This bill will just mean automation and fewer workers at fast-food restaurants.” Only time will tell.

Like most laws passed in the Golden State, this law won’t become effective until January 2023.

So, maybe it’s time to head for the Golden Arches for a No. 1. That’s a Big Mac, fries, and a medium drink for you healthy eaters. Toss in the Apple Pie for a dessert.

Image Sources

  • Hamburger and fries: Pexels