California has recently announced an increase in its minimum wage for fast food workers, raising it to $20. This move has raised concerns among fast food franchise owners, who fear losing customers due to the inevitable rise in food prices.

 

Franchisees are adjusting prices to offset the minimum wage increase but fear this could drive some diners to seek more affordable options at casual dining chains like Chili's and Applebee's.

 

Unlike fast food restaurants, these chains are not subject to the new minimum wage, meaning they are not expected to raise prices to the same extent. This disparity could lead to a reduction in the price gap between fast food and casual dining restaurants.

 

The new $20 wage specifically applies to workers in limited-service restaurant chains, where diners generally do not receive table service and pay for their meal before consuming it. These chains must have at least 60 locations nationwide to be affected by this change.

 

In response to the minimum wage increase, fast food restaurants in California have begun raising prices on their products to cover the additional costs. This increase represents a 25% hike above the state's general minimum wage.

 

Concern among fast food franchise owners is palpable as they strive to balance operational costs with customer satisfaction in an increasingly competitive and ever-evolving market.