California’s new fast-food law establishes a politically appointed council with unprecedented power to regulate the industry by setting worker wages, hours, and other working conditions.
California’s new fast-food law establishes a politically appointed council with unprecedented power to regulate the industry by setting worker wages, hours, and other working conditions. The law applies to any fast-food chain in California that has at least 100 stores nationwide sharing a common brand. This is not just government overreach on steroids. This bill essentially kills the franchisor-franchisee model within the industry and will almost certainly destroy thousands of jobs by driving up the cost of doing business and increasing the level of automation in the industry.
The new law couldn’t have come at a worse time. According to the most recent data from the Bureau of Labor Statistics, employment in California’s fast-food industry remains nearly 20 percent below its pre-pandemic level (representing a loss of more than 75,000 jobs). Even more disturbing is that industry employment continued to decline even after the height of the pandemic, losing another 25,000 jobs between the spring of 2020 and the spring of 2021 (data for 2022 are unavailable).
The average fast-food restaurant is marginally profitable, with profit margins averaging between 6 and 9 percent in normal times, and franchisee capital requirements are large, sometimes requiring $2 million or more to get a franchise up...
Although on appeal the court distinguished that there was new information in the claim, the court ultimately found the new information was not material, nor was it plead with particularity. The U....