The owners of four Fatburger franchises in Los Angeles are raising menu prices and shortening workers' hours to offset an impending California law that would raise the minimum wage for fast-food workers to $20 an hour. and abolished paid leave.
Marcus Wahlberg, who owns the popular outpost, said he was forced to take drastic action because his salary is expected to jump 30% under the new law.
“Franchise owners will be forced to take drastic measures, which will cause significant hardship to workers.” he told Business Insider.
Walberg said he will increase prices at his four restaurants by up to 10% when the law takes effect April 1. He just raised menu prices by 8% last year.
One of his current locations in Los Angeles sells the Original Fatburger, which includes one beef patty and “creations” that include lettuce, tomato, onion, pickles and relish, for $7.75.
“This is scary because customers are already complaining that the prices are too high,” Wahlberg said.
Fatburger's fast-food rival McDonald's has also raised prices by 20% in the past two years, and analysts say Golden Arches has lowered the price of its signature Big Mac combo in California in response to a minimum wage increase. We expect the price to go up to $15.
Wahlberg also told Insider that the company is saving money by reducing employee hours.
“We’re not hiring new people to fill jobs,” he said. “We have a very tight schedule.”
As part of another cost-cutting effort, Wahlberg said he has eliminated the paid leave program at Fatburger franchises “to prepare for wage increases in 2024,” according to Insider.
He first started implementing PTO for his employees three years ago, when employees were entitled to up to 72 hours of paid time off per year.
“We can't afford to do that anymore,” he said, calling it “a real shame.”
Walberg did not immediately respond to the Post's request for comment on LinkedIn.
Meanwhile, several Pizza Hut franchises in California announced they plan to lay off delivery workers in preparation for a minimum wage increase scheduled to take effect within three months.
Pizza Hut stores in Los Angeles, Orange, San Bernardino, Riverside and Ventura counties are reportedly affected.
Many franchises expect to rely on third-party delivery apps like Uber Eats, GrubHub, and DoorDash in the spring.
