Stew Over State Board Restaurants
In addition to owning and operating the El Cholo restaurant in Pasadena, Blair Salisbury and his business partner were in the process of franchising 20 Daddy’s Chicken Shack locations. But that deal fell apart soon after the two learned of something called the FAST Recovery Act.
That means the Fast Food Accountability and Standards Recovery Act, a California bill that would create a board selected by state politicians to set wages, hours and working conditions for fast food franchise employees.
The bill, backed by unions, passed the California Senate Labor, Public Employment and Retirement Committee on June 13 by a 3-2 vote and is then going to the Assembly , where it should be adopted.
Backers say it would give California’s more than 700,000 fast-food workers the chance to earn better wages and work environment standards.
Since becoming aware of the bill, Salisbury’s partner and backers have pulled out of the deal, leaving Salisbury alone to determine whether it is a viable business venture or whether it is must also withdraw. Franchisees and owners of fast-food chains like Salisbury fear that, if passed, the bill, officially known as AB 257, will make it difficult for these businesses to be profitable.
Make things happen
“If signed into law, California could lead the nation in the fight for systemic change in the fast food industry,” Assemblyman Chris Holden, D-Pasadena, said in a press release in January. .
AB 257 would completely transform the fast food business model in California starting with defining the characteristics of a fast food restaurant. For example, it must be part of a chain of at least 30 similarly branded establishments nationwide.
In the traditional business model, large fast food companies do not manage individual locations. Instead, they are owned and operated by a franchise. Although this gave franchisees the opportunity to start their own business, many argue that it left room for unfair wages and poor working conditions. In this way, large companies like McDonald’s Corp. are not responsible for workplace violations at franchise-operated restaurants.
The bill would change that by creating a Fast Food Industry Council within the Department of Industrial Relations, and it will be made up of 11 unelected people hand-picked by the governor, assembly speaker and committee. Senate rules. The committee would be made up of five representatives from state agencies, two workers, two employee advocates and one representative each for franchises and corporations. They would meet at least once every three years to decide standard wages, hours of work and working conditions for fast food franchises across the state.
Franchisors and franchisees have argued that AB 257 is unnecessary and will only drive up prices for customers.
“Union leaders continue to spread a false narrative of widespread labor and wage violations in order to pass legislation that will raise prices for millions of California workers at tens of thousands of restaurants and food establishments across the country. state,” the California Restaurant Association said in a press release.
“Forcing counter-service restaurants to bear the brunt of rising employee costs and new workplace rules will mean higher prices for working families and hamper thousands of local restaurants as they are recovering from the pandemic,” the statement continued. “With inflation at its highest level in 40 years, this is the worst possible time for lawmakers to consider imposing a food tax on California workers.”
In a statement, Jot Condie, president and CEO of the restaurant association, said California already has “one of the most rigorous worker protection and workplace safety structures in the country,” noting that there was no need to replace the existing system with a new committee.
Michaela Mendelsohn, owner of six El Pollo Loco locations in Los Angeles, has been a franchisee for nearly 35 years and a long-time advocate for LGBTQ+ worker rights, working with the state senate to pass legislation prohibiting harassment of LGBTQ+ people.
“I spent nine years as franchise president of El Pollo Loco and also as a transgender businesswoman working a lot with the industry to try to support the rights of transgender employees,” Mendelsohn said. “Workers’ rights are a very important thing to me.”
She went on to explain that California already has systems in place to deal with workplace safety, pay and benefits issues, stressing that the state should focus on enforcing the protections already in place. place instead of “creating new layers of bureaucracy that will only hinder the enforcement of what are already the best laws in the land.
She also said there were not enough workers knowing their rights in the first place and she hopes one day to see them included in onboarding training. “I want to support my workers’ rights, but not like this,” Mendelsohn added.
She said being in the food business today is extremely difficult and there is little profit margin.
“The profitability of our businesses and the inability to finance growth has never been more difficult than it is today in the 35 years that I have worked in the food sector. Our profits were squeezed to the max,” Mendelsohn continued. “The reason is the high cost of food and the high cost of labor (because) the job market is getting much tougher.”
Like Mendelsohn, Salisbury said FAST’s passing would be “devastating” for franchisees. He said he had seen several restaurants around him close and too many people were uninformed about the economics of running a restaurant.
The Salisbury family have worked in the restaurant business for more than 100 years, but he said if the bill passes he will have to find another profession.
When asked for advice from people wanting to become a franchisee, Mendelsohn said they should wait.
“Now, if someone came to me and said, ‘Should I franchise in California?’ I would say ‘wait.’ Wait and see what happens on this bill, because if it comes to fruition, it will make being a franchisee a very unfavorable place.