California’s $20 fast food minimum wage balloons menu prices — with some chains increasing costs by nearly $2


You’ll be dropping a lot of dollars on that Whopper.

Menu prices at fast food chains across California have increased, as a new law went into effect requiring them to pay a $20-an-hour minimum wage to workers from Monday.

The Post checked menus at several restaurants in the Los Angeles area to see if the costs are already being passed onto consumers — with mixed results.

The biggest leap on was at Burger King, where a Texas Double Whopper meal cost $15.09 on March 29, but surged to $16.89 on April 1, a price whopping increase of $1.80 for the same meal.

The Big Fish meal also jumped from $7.49 on the menu before April 1 to $11.49 after — an increase of $4.

Most other items increased anywhere from 25 cents to a dollar.

Burger King did not respond to a request for comment. 

An LA-area Burger King enacted sharp price increases after the state’s controversial new minimum-wage lawGenevieve Wong

Burger King was not alone. At Hart House, a fast food chain founded by actor Kevin Hart, prices increased up to 25%. Before the law was enacted, large fries cost $4.49.

On April 1, that price went up to $5.99. Milkshakes of all sizes increased by $1.00, while most sandwiches went up by 50 cents each.

At a nearby In-N-Out Burger, the price hikes were more modest. Burgers went up about 25 cents, while sodas increased by a nickel.

Menu prices at Burger King in Los Angeles on March 29.

The price increase got mixed reviews from customers on Monday.

“It’s such a nominal increase,” says Shawn Fields, 40, who was buying lunch at In-N-Out.

“It seems like a reasonable amount.”

Menu prices at Burger King in Los Angeles after the prince increase on April 1

But not everyone agrees.

“To be honest, I don’t like it, because then everything else goes up,” Ivan Moreno, who was buying a meal at Burger King, told The Post.

“These people have to make a living one way or another, but then [the restaurants] have to up their prices.”

In-N-Out Burger also rasied its pricesGenevieve Wong
Before prices at In-N-Out.Genevieve Wong
After prices at In-N-Out.Genevieve Wong

Other restaurants checked by The Post showed no change, including Chick-fil-A, Wendy’s and McDonald’s.

One McDonald’s franchisee, though, says he’s had no choice but to raise prices already.

“As a business owner, when you’re dealing with this kind of extraordinary overnight change, you know, a 25% increase in wages, (no) stone has to remain unturned,” Scott Rodrick, who owns 18 restaurants in Northern California, told CNN on Monday.

Wendy’s prices remained the same — for nowGenevieve Wong
Wendy’s menu showed no price increases on April 1.

In the last three months, Rodrick has raised menu prices between 5% and 7% in anticipation of the new law going into effect.

Democrats in the state Legislature passed the law last year which raises the wages of more than 500,000 people who work in fast-food restaurants. The previous minimum wage was $16 per hour.

The law applies to restaurants offering limited or no table service and which are part of a national chain with at least 60 establishments nationwide.

Fast-food franchisees in California are desperately looking for ways to cut costs as the state's $20 minimum wage for workers at limited-service restaurants kicks in.

Proponents of the legislation say that it will help thousands of workers with basic living costs. But fast-food chains and their franchisees worry about the impact that the wage hike could have on their profits.

"As of today, I am well into the red," Michaela Mendelsohn, who owns six El Pollo Loco restaurants in California, told NBC Los Angeles on Monday, the day the new wage was introduced.

"We are losing money, so we are going to need to stop the boat from leaking by making changes," she said.

Some chains, including McDonald's and Chipotle, have said that diners in California should expect higher prices because of the legislation. But franchisees can largely set their own prices, and some are cautious about scaring off customers.

One McDonald's franchisee in Los Angeles County, for example, recently said her food would become "unaffordable" if she raised her prices enough to offset the new wage fully.

As a result, some locations are looking for other ways to absorb the higher wages without deterring diners:

1. Laying off workers

Some franchisees are laying off workers to cut their payrolls and avoid paying higher wages.

Two Pizza Hut franchisees in California said they planned to scrap in-house delivery to rely on third-party services instead, resulting in around 1,200 workers being laid off. A Round Table Pizza franchisee has also filed plans to lay off 70 delivery drivers this month.

A DoorDash delivery driver riding a bicycle
Some pizza franchisees are laying off delivery drivers and plan to rely on third-party services instead. Alexi Rosenfeld/Getty Images

Alex Johnson, an Auntie Anne's Pretzels and Cinnabon franchisee, told The Associated Press that he'd laid off his office staff and was getting his parents to help out instead.

2. Cutting hours and hiring less

But many franchisees say they don't want to lay off their workers.

Instead, some are cutting employees' hours and stopping hiring, like Marcus Walberg, who owns several Fatburger restaurants in Los Angeles. "We're being very tight on schedules," he told BI in January.

Other franchisees have made similar comments. Mendelsohn, the El Pollo Loco franchisee, told NPR that her preemptive price increases had already deterred some customers. "So really what's left is ... to reduce labor hours," she said. "And I hate saying that."

"I'm definitely not going to hire anymore," Brian Hom, the owner of two Vitality Bowl restaurants in San Jose, told The Wall Street Journal in March.

3. Dropping staff benefits

Walberg told BI in January that he'd stopped his restaurants' paid time off program to prepare for the wage increases.

"We just can't afford to do that anymore," he said.

4. Turning to order kiosks

Restaurants are turning to technology and automation to help reduce labor costs.

Sharon Zackfia, a restaurant analyst at William Blair, previously told BI that she expects digital order kiosks — currently a key focus area for some fast-food chains — to spread "even more quickly" in California. Kiosks mean that diners can place orders without having to speak to staff at a counter.

Wendy's order kiosk
William Blair analyst Sharon Zackfia expects some restaurants in California to turn to digital kiosks as labor costs rise. Grace Dean/Business Insider

Mendelsohn, the El Pollo Loco franchisee, told CNN that she was introducing order kiosks and was considering bringing in AI-operated drive-thrus.

5. Spending less on operations

Beyond labor, restaurants are looking for other ways to save on their operating costs.

"Can I turn my lights off? Can I not have the air conditioning on right now? Can I turn it on later?" Kris Stuebner, executive VP of operations at KFC and Wendy's franchisee Jem Restaurant Management Corporation told ABC 30 Action News. "That's things that we're looking at right now."

The higher wage is making some franchisees put off larger changes to their operations, too, including opening new restaurants.

Scott Rodrick, a McDonald's franchisee with 18 restaurants in northern California, told Fox News that he might have to postpone some major investments, like remodeling dining rooms and buying new grills, and would have to seriously consider whether he'd want to open new restaurants in the state.

Alex Johnson, the Auntie Anne's Pretzels and Cinnabon franchisee, told the AP that he wasn't looking at opening any more locations in California. "I have to consider selling and even closing my business," he said. "The profit margin has become too slim."

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