• Thu. Sep 28th, 2023

    The Impact of California’s Fast Food Bill on McDonald’s Franchise Owners

    ByEmma Wolukau-Wanambwa

    Sep 19, 2023
    The Impact of California’s Fast Food Bill on McDonald’s Franchise Owners

    The National Owners Association (NOA), a group representing over 1,000 McDonald’s franchise owners, has criticized California’s recently passed fast food bill, calling it “draconian.” The legislation, known as AB 1228 or the Fast Food Franchisor Responsibility Act, introduces new standards for wages, working hours, and other conditions related to the health and safety of fast-food workers.

    However, the NOA argues that the law imposes costs that small business owners cannot absorb within the current business model. According to the group, 95% of McDonald’s restaurants in California are locally owned and operated by small business owners, who may struggle to meet the new requirements. They estimate that the new legislation could cost each McDonald’s restaurant around $250,000 per year.

    The bill applies to fast-food chains with at least 60 locations nationwide, excluding those that make and sell their own bread. It introduces a significant increase in the minimum wage, raising it to $20 by April 1, 2024, which is almost $5 higher than the state’s current minimum wage of $15.50. Additionally, the bill establishes a council to govern fast-food chains and set guidelines for wages and working conditions. Critics argue that this council’s limited scope could lead to lawsuits against franchisees, potentially forcing corporate headquarters to exert more control over local operations.

    California Governor Gavin Newsom has until October 14 to sign or veto the bill. The NOA expresses concerns that if the bill passes, it could encourage similar efforts in other states, jeopardizing franchisees’ ability to make local business decisions. Roger Delph, a California McDonald’s franchisee, emphasizes the need for unity among franchise owners to prevent this bill from gaining traction elsewhere.

    – California’s AB 1228 legislation, or the Fast Food Franchisor Responsibility Act
    – California Governor Gavin Newsom
    – The National Owners Association (NOA) representing McDonald’s franchise owners.