Fast Food Fallout: Why California's Chains Are Crumbling

By Mike Fishmore | May 8, 2024

Minimum wage

The era of fast food chains in the golden state may be coming to an end due to minimum wage increases and inflation.
 

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The implementation of a $20 minimum wage for most fast-food workers in California has disrupted this traditional business model. Franchise owners can no longer sustain their operations with minimal wages, as the burden of increased labor costs looms large.
 

Challenge of inflation

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Furthermore, the challenge of inflation is driving up the prices of essential ingredients such as beef, poultry, and vegetables. Fast food giants, heavily reliant on these key ingredients, are faced with a dilemma: absorb the rising costs and risk financial instability, or pass on the expenses to consumers, potentially alienating their price-conscious customer base.