Gov Newsom leaves Panera Exempt from CA Min Wage?

[storewanderer]

The exception for chains that have less than 60 locations is interesting. What if McDonald's rebranded their restaurants? For example, rebrand 59 restaurants as Ronald McDonald's Hamburgers or Grimace's Burgers. Would that allow below $20 per hour wages?

It has to be less than 60 restaurants total in the chain nationwide. So I guess if they rebranded in groups of 59 units maybe they could get around it. But I don't see the franchisors ever letting that happen.

Higher prices mean more royalties for the franchisors. The franchisors have very few corporate operated stores in CA. Burger King, Carls, Arbys, Wendys, McDonalds, used to have bases of corporate stores in California but over the years they sold most/all of those stores off as part of refranchising programs. Carls and McDonalds still have a few corporate stores in CA but the others don't.

So the franchisors just sit back, collect royalties, and let the local franchisees deal with this CA law, the increase in prices that will result from it, angry customers, the staffing cuts they are making, etc. As long as units don't actually close this is a win for the franchisors who get the benefit of increased royalties from the higher revenue from the higher prices that will occur.

The consumer is the main loser again.

Also I heard Starbucks isn't covered under the law. They sell all the same things as these fast foods... whatever.

[HCal]

The exception for chains that have less than 60 locations is interesting. What if McDonald's rebranded their restaurants? For example, rebrand 59 restaurants as Ronald McDonald's Hamburgers or Grimace's Burgers. Would that allow below $20 per hour wages?

I don't know about this law in particular, but many laws define a chain as restaurants that have certain common characteristics, such as name, menu, decor, etc. Just rebranding some locations while keeping everything else the same would probably not be sufficient. Now if McDonald's converted 59 locations to serve tacos and pizza, that might be considered a separate chain.

[storewanderer]

The exception for chains that have less than 60 locations is interesting. What if McDonald's rebranded their restaurants? For example, rebrand 59 restaurants as Ronald McDonald's Hamburgers or Grimace's Burgers. Would that allow below $20 per hour wages?

I don't know about this law in particular, but many laws define a chain as restaurants that have certain common characteristics, such as name, menu, decor, etc. Just rebranding some locations while keeping everything else the same would probably not be sufficient. Now if McDonald's converted 59 locations to serve tacos and pizza, that might be considered a separate chain.

We can give an example immediately. That new "CosMcs" or whatever it is format they are trying in IL. It currently has... 1 location. Since that is a separate chain from the standard McDonalds, I don't think a CA unit would fall under this law, until that chain goes to 60 units nationwide.

[Brian Lutz]

The exception for chains that have less than 60 locations is interesting. What if McDonald's rebranded their restaurants? For example, rebrand 59 restaurants as Ronald McDonald's Hamburgers or Grimace's Burgers. Would that allow below $20 per hour wages?

I don't know about this law in particular, but many laws define a chain as restaurants that have certain common characteristics, such as name, menu, decor, etc. Just rebranding some locations while keeping everything else the same would probably not be sufficient. Now if McDonald's converted 59 locations to serve tacos and pizza, that might be considered a separate chain.

We can give an example immediately. That new "CosMcs" or whatever it is format they are trying in IL. It currently has... 1 location. Since that is a separate chain from the standard McDonalds, I don't think a CA unit would fall under this law, until that chain goes to 60 units nationwide.

Actually 2, they just opened another one in Dallas.

[Alpha8472]

What if McDonald's had planned CosMc's all along so that they could open up CosMc's in California under a lower wage scale? The restaurants would gradually expand the menu to include practically everything on the McDonald's menu.

[storewanderer]

What if McDonald's had planned CosMc's all along so that they could open up CosMc's in California under a lower wage scale? The restaurants would gradually expand the menu to include practically everything on the McDonald's menu.

I think even if the next 57 of those are in CA it won't matter much. 57 units to that franchisor don't mean much. They're letting the franchisee deal with the higher wages and other logistical requirements of the new law. And letting the customer pay more. Meanwhile revenue goes up and they get more money as the franchisor not only from royalties but also in the many buildings they own from building rent since the rent is based on revenue.

I wouldn't be surprised if some of these investment group backed franchisors who may be well connected to CA politicians came up with this whole law because they're going to benefit the most here from the increased royalties.

[BillyGr]

The exception for chains that have less than 60 locations is interesting. What if McDonald's rebranded their restaurants? For example, rebrand 59 restaurants as Ronald McDonald's Hamburgers or Grimace's Burgers. Would that allow below $20 per hour wages?

Possibly they could get that to work legally, but would it make any difference in reality?

After all, if all the bigger chains are being forced to pay that $20/hour, would these "rebranded" places be able to hire people if they wanted to pay a lower rate?

Seems the same will likely occur for even independently owned places, save maybe a few really well-known ones that keep employees for decades (as they are likely either at that rate already, or are more loyal to their companies and would be willing to accept a bit lower pay if the company needs to do so to continue operating profitably).

[storewanderer]

The exception for chains that have less than 60 locations is interesting. What if McDonald's rebranded their restaurants? For example, rebrand 59 restaurants as Ronald McDonald's Hamburgers or Grimace's Burgers. Would that allow below $20 per hour wages?

Possibly they could get that to work legally, but would it make any difference in reality?

After all, if all the bigger chains are being forced to pay that $20/hour, would these "rebranded" places be able to hire people if they wanted to pay a lower rate?

Seems the same will likely occur for even independently owned places, save maybe a few really well-known ones that keep employees for decades (as they are likely either at that rate already, or are more loyal to their companies and would be willing to accept a bit lower pay if the company needs to do so to continue operating profitably).

The wage will need to go above $20 per hour even at places not covered by the law. Otherwise they won't get staff.

There is a lot more to the law than just the $20 per hour wage... that will add costs and complexity to the operations.