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California’s&nbsp;<a href="https://www.dir.ca.gov/dlse/minimum_wage.htm?utm_source=1851franchise.com&utm_medium=article&utm_campaign=is-the-fast-food-minimum-wage-increase-in-california-hurting-franchises-2726602" target="_blank" rel="nofollow">Fast Food Franchisor Responsibility Act</a>, which went into effect on April 1, included a $20 minimum wage increase for fast-food workers. This wage hike has caused some chains to&nbsp;<a href="https://1851franchise.com/californias-new-fast-food-bill-sparks-concerns-among-franchisees-in-the-state-2724051#stories">raise prices</a>, resulting in a noticeable decline in customer visits. Data from&nbsp;<a href="http://placer.ai/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=is-the-fast-food-minimum-wage-increase-in-california-hurting-franchises-2726602" target="_blank" rel="nofollow">Placer.ai</a> showed that before the wage increase, California's quick-service restaurants&nbsp;<a href="https://www.entrepreneur.com/franchises/how-californias-20-minimum-wage-is-changing-franchising/475784?utm_source=1851franchise.com&utm_medium=article&utm_campaign=is-the-fast-food-minimum-wage-increase-in-california-hurting-franchises-2726602" target="_blank" rel="nofollow">had slightly better year-over-year visit trends</a> compared to the national average, but this trend reversed since April.The wage increase applies to limited-service restaurants where customers order and pay before eating. This legislation emerged from extensive negotiations between the fast-food industry and labor unions, marking a significant shift in labor rights and economic policy in California.Employees in the service industry have long been underpaid, and this new&nbsp;<a href="https://1851franchise.com/what-ongoing-pushes-for-increased-minimum-wages-mean-for-the-franchise-industry-2726303#stories">wage increase</a> is attempting to address the issue. However, businesses need to recoup the costs somewhere and many are passing the added expense onto the consumer. Alternatively, some franchises are reconsidering their current expansion goals and labor needs.In response to the increased operational costs, some franchises are rethinking expansion in the state. For example, Rubio's Coastal Grill closed 48 locations, citing the high cost of doing business in California. Similarly, two Pizza Hut franchisees laid off delivery workers in anticipation of the wage hike.Many are wondering whether or not California could be setting the bar for labor rights and economic policy; however many are also cautious about the impact this could have on businesses. The long-term effects of this wage hike remain to be seen, but early indicators suggest it is reshaping the fast-food landscape in California, with potential implications for other states considering similar measures.To read the full story from Entrepreneur,&nbsp;<a href="https://www.entrepreneur.com/franchises/how-californias-20-minimum-wage-is-changing-franchising/475784?utm_source=1851franchise.com&utm_medium=article&utm_campaign=is-the-fast-food-minimum-wage-increase-in-california-hurting-franchises-2726602" target="_blank" rel="nofollow">click here</a>.Every great franchisee had help buying a franchise. Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=is-the-fast-food-minimum-wage-increase-in-california-hurting-franchises-2726602" target="_blank" rel="nofollow">www.1851growthclub.com</a> and start your journey.

Increased Minimum Wage in California is Affecting Franchises

1851 Franchise

California's recent $20 minimum wage for fast-food workers, effective April 1, has started to impact franchises, leading to higher menu prices and reduced foot traffic. 

Is the Fast-Food Minimum Wage Increase in California Hurting Franchises?

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HomeTeam Inspection Service

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How a Chance Encounter Led This Father-Son Duo to a Thriving Home Inspection Business

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Sola Salons

Photo of Campbell family, featuring Austin and Nick Campbell

Building a Legacy Through Sola Salons: The Campbell Family’s Journey in Franchising

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Sparkle Squad Window Cleaning Services

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Sparkle Squad: How This Founder-Led Window Cleaning Franchise Is Changing the Industry

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World Gym

The Mental Benefits of Strength Training: Boost Confidence, Reduce Stress and Improve Clarity

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Harri

Connected Workforce: What It Means for Large Multi-Unit Franchisees Facing Labor Challenges

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Is the Fast-Food Minimum Wage Increase in California Hurting Franchises?

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