In addition to owning and running El Cholo Restaurant in Pasadena, Blair Salisbury and its business partner were franchising 20 locations at Daddy’s Chicken Shack. But the deal was made shortly after the two learned of something called the Rapid Recovery Act.
This means the Fast Food Accountability Accountability Standards Act, a California bill that will create a board selected by government policymakers to determine salaries, hours and working conditions for employees of franchise fast food establishments.
The bill, backed by unions, was passed by the California Senate Committee on Labor, Public Employment and Retirement on June 13 by a 3 to 2 vote and goes to the Assembly, where it is expected to be passed.
Supporters say it will give more than 700,000 fast food workers in California the opportunity to receive better wages and standards for the work environment.
Since learning of the bill, Salisbury’s partner and financial backers have dropped the deal, leaving Salisbury to decide for itself whether it is a viable business venture or not. Franchisees and owners of fast food chains such as Salisbury fear that if passed, the bill, officially known as AB 257, will make it harder for these businesses to remain profitable.
Shaking things up
“If a law is signed, California could lead the nation in the fight for systemic change in the fast food sector,” MP Chris Holden, D-Pasadena, said in a press release in January.
AB 257 will completely transform the business model of fast food restaurants in California, starting with determining what characteristics make a fast food restaurant. For example, it must be part of a chain of 30 or more establishments with a similar brand across the country.
In the traditional business model, large fast food corporations do not manage individual locations. Instead, they are owned by the franchise and are managed. While this allows franchisees to build their own business, many say it has left room for unfair wages and poor working conditions. Thus, large corporations such as McDonald’s Corp. are not liable for workplace violations in restaurants operated by franchisees.
The bill will change this by establishing a Council for the Fast Food Sector within the Industrial Relations Department, and it will consist of 11 unelected people, elected by hand by the governor, the chairman of the assembly and the senate rules committee. The commission will consist of five representatives of government agencies, two employees, two employee advocates and one representative for franchises and corporations. They will meet at least once every three years to determine standard salaries, working hours and working conditions for fast food franchises across the country.
Concerns of the franchisee
Franchisors and franchisees argue that AB 257 is unnecessary and will do nothing but jump prices for customers.
“Union leaders continue to impose false accounts of widespread labor and wage violations in order to pass a law that will raise prices for millions of working Californians in tens of thousands of restaurants and eateries across the state,” the California Restaurant Association said in a statement. for news.
“Forcing over-the-counter restaurants to bear the brunt of increased staff costs and new workplace rules will mean higher prices for working families and prevent thousands of local restaurants from recovering from the pandemic,” the statement said. “With inflation at its 40-year high, this is the worst possible time for lawmakers to consider introducing a food tax on working Californians.”
In a statement, Jotte Condie, president and CEO of the Restaurant Association, said California already has “one of the strictest structures for worker protection and safety in the country,” noting that there is no need to repeal the existing system with a new commission.
Michaela Mendelssohn, owner of six El Pollo Loco locations in Los Angeles, has been a franchisee for nearly 35 years and a longtime advocate for LGBTQ + workers’ rights, working with the state senate to pass legislation banning harassment of LGBTQ + individuals.
“I spent nine years as the franchise president of El Pollo Loco, and also as a transgender businesswoman, working hard on the industry, trying to uphold the rights of transgender people,” Mendelssohn said. “Workers’ rights are very important to me.”
She went on to explain that California already has systems in place to take care of workplace safety, wages and benefits, noting that the state should focus on enforcing existing protections instead of “creating new layers of bureaucracy. which they will only hinder the implementation of what is already the best laws in the country. “
She also said that not enough workers know about their rights in the first place and hopes to one day see them included in the adaptation training. “I want to support the rights of my workers, but not,” Mendelssohn added.
She said being in the food business today is extremely difficult and there is little room for profit.
“The profitability of our business and the inability to finance growth has never been as difficult as it is now in my 35 years in the food business. That is the most that has drained our profits, “Mendelssohn continued. “The reason for this is the high price of food and the high cost of labor (because) the labor market is becoming much more difficult.”
Like Mendelssohn, Salisbury said the FAST move would be “devastating” for franchisees. He said he had seen many restaurants around him and that too many people were unaware of the economics of restaurant management.
The Salisbury family has been in the restaurant business for more than 100 years, but he said that if the bill is approved, he will have to find another job.
Asked for advice from people who want to become franchisees, Mendelssohn said they should wait.
Now, if someone came to me and asked, “Should I be a franchisee in California?” I would say, “Wait.” Wait and see what happens to this bill, because if it does, it will make being a franchisee a very unfavorable place.