San Francisco chain McDonald’s has reportedly become the latest casualty of California’s new $20 minimum wage.
The McDonald’s at the Stonestown Galleria shopping mall, about eight miles southwest of downtown San Francisco, closed permanently on Sunday after more than 30 years in the area.
“This is a heartbreaking day for my family,” franchise owner Scott Rodrick said. According to ABC7.
Rodrick attributed the closure to a variety of factors, but said a newly enacted law raising the statewide minimum wage from $16 to $20 an hour pushed the business over the edge.
Combined with his landlord’s refusal to negotiate a long-term lease, high property taxes and mall tenant fees (all of which combined to make the Stonestown McDonald’s his restaurant company’s most expensive location to operate), the new wage increases were too much to keep the store afloat.
“It has been a pleasure for me and my entire team to serve the 19th Street and Ingleside area for over 30 years,” the franchise owners wrote in a note posted on the door when the store closed.
“All of our valued team members have been offered the opportunity to continue working either with my restaurant company or at their local McDonald’s,” Rodrick added.
Many businesses across California have closed since the new minimum wage went into effect on April 1.
One of the most recent closures was Arby’s Roast Beef, which had been on Sunset Boulevard in Hollywood for 55 years, but closed its doors in early June.
“Inflation has increased food costs dramatically, and a $20 an hour minimum wage has been a killer,” General Manager Gary Hash previously said. He told the Los Angeles Times.
Taco chain Rubio’s Coastal Grill was forced to close dozens of locations across the state in June and filed for Chapter 11 bankruptcy protection days later.
Fast food chain Foster’s Freeze also closed a location near Fresno, blaming the new minimum wage as the immediate cause of its closure.
In other instances, the costs of raising worker wages are passed on directly to customers.
Chains including McDonald’s, Wendy’s, Burger King, Starbucks and Chipotle have raised prices in California by up to 8%.
As a result, customer visits to these chain stores have decreased, According to analytics firm Placer.ai.
