California is forcing fast food chains to get creative to afford the state’s new $20 minimum wage.
Scott Rodrick, a McDonald’s franchise owner, is considering higher menu prices and shorter hours, saying layoffs are the “last thing” he’s considering.
“The last 12 days since this unprecedented law hit franchisees in California have been a whirlwind in every sense of the word. “Honestly, it feels like forever,” Rodrick said during an appearance on “Varney & Co.”
CEO of MCDONALD’S SAYS THE FOOD CHAIN WILL FOCUS ON AFFORDABILITY WITH NO REVEALING ABOUT MEAL CANCELATIONS
“I am aware that my customers’ desire for higher prices is not unlimited. So if I’m going to price to reduce margin pressure, I need to do it wisely and with a plan. Charging $10 for an Egg McMuffin or $20 for a Big Mac is a no-brainer to me,” he continued.
In anticipation of the new law, Rodrick increased his prices by 5 to 7% between January and March. However, he says further economic efforts are necessary.
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Rodrick, who owns 18 McDonald’s franchises in California, warned that the new law would likely have an “unprecedented impact” on California’s franchise business model.
“Price is a lever that an independent business owner like me can use to mitigate this extraordinary, unprecedented impact on the franchise business model in California. But there are other things too. I need to somehow increase sales and reduce costs on my profit and loss statement.” [profit and loss] to survive,” he said Friday.
“This is the 50th year that my family has been in the McDonald’s business and I plan to fight and survive for another 50 years, so it will be a combination of the price. “It’s going to be a combination of looking at capital expenditure and looking at work efficiency sensibly.” “And I’m trying to grow my market share,” Rodrick continued.
Pizza chain raises prices in California to compensate for new minimum wage law
Despite the law, the McDonald’s franchisee stressed that laying off employees was the “very last thing” he would consider.
“There’s a lot of discussion on this topic about restaurants, closing restaurants and laying people off. Honestly, in my organization, this is the very last thing I pay attention to. I have 800 people, 800 people running my restaurants. That’s “The last lever I’m looking at,” FOX Business’ Rodrick told Stuart Varney.
One drastic way fast food franchises have taken action against the state’s new minimum wage law is by moving their business elsewhere, which Rodrick admittedly has crossed his mind “a few times.”
“Right now the focus is on survival. And a third-generation daughter has just joined the company. “So the question I have to ask her is whether she thinks she should spend the next 50 years in a place like California and be okay with it, or would it be wiser for her to franchise somewhere else?” he concluded .
Original source of the article: The California McDonald’s franchisee’s shares are struggling with the “unprecedented” impact of the new minimum wage