California McDonald’s franchise owner Scott Rodrick joins Barney & Company. to discuss California’s highly controversial $20 minimum wage increase.
California is asking fast food chains to come up with ways to meet the state’s new $20 minimum wage.
Scott Rodrick, one of McDonald’s franchise owners, said the company is considering raising menu prices and shortening business hours, and that cutting staff is “the last thing on my mind.”
“The past 12 days have literally been a whirlwind since this unprecedented law impacted our franchisees in California. Frankly, it has felt like an eternity,” Rodrick said in a statement. ” he said when appearing on the show.
McDonald’s CEO says fast food chain will focus on affordability amid anger over menu price hikes
McDonald’s logo near a restaurant on November 13, 2023 in Santa Monica, California. McDonald’s franchise owner Scott Roderick revealed that California’s new minimum wage law is exposing his restaurants to multiple financial hardships. (Jakub Porzycki/NurPhoto via Getty Images / Getty Images)
”We recognize that customers’ desire for higher prices is not unlimited. Therefore, you need to be careful and deliberate when setting prices to reduce margin pressure. “For me, charging $10 for an Egg McMuffin and $20 for a Big Mac just doesn’t work for a newbie,” he continued.
In anticipation of the new law, Rodrick raised prices by 5% to 7% from January to March. But he says more economic efforts are needed.
“Right now, the focus is on survival.”
Roderick, who owns 18 McDonald’s franchises in California, warned that the new law would likely have an “unprecedented impact” on the business model of California franchises.
“Pricing is a measure that independent business owners like myself can consider to mitigate this unusual and unprecedented impact on California franchise business models. But there are other issues as well. We need to grow revenue and reduce costs on the income statement to survive,” he said on Friday.
North Dakota Gov. Doug Burgum claims California’s new minimum wage law will affect all businesses in the state that sell food “coast-to-coast.”
“My family is celebrating 50 years in the McDonald’s business this year, and I plan to survive for another 50 years, so it’s going to be a combination of price. It’s going to be a combination of being smart about capital investment and labor efficiency.” “And we’re trying to expand our market share,” Rodrick continued.
Pizza chain raises prices in California to offset new minimum wage law
Despite the law, McDonald’s franchise owners stressed that laying off employees is “the last thing” they are considering.
“There’s a lot of discussion going on about restaurants, closing restaurants, laying off employees. Frankly, in my organization, that’s the least of my concern. I have 800 people “I have employees, 800 people running my restaurant. That’s the last lever I’m looking at,” he explained to FOX Business’ Stuart Barney.
Gavin Newsom’s approved $20 minimum wage bill takes effect April 1 and is already having an “unprecedented” economic impact on fast-food franchise owners, Scott Rodrick said. . (Getty Images/Fox News Digital/Photo Illustration/Fox News)
A radical way for fast-food franchises to fight the state’s new minimum wage law is to move operations elsewhere, something Roderick is sure to have reminded him of “several times.”
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“Right now, the focus is on survival. And a third-generation daughter just joined this business. So the question I have to ask her is, is she going to spend the next 50 years in a place like California and give it her all?” ‘Either she believes she should spend her time there, or she doesn’t.’Would it be wiser for her to run the franchise elsewhere?” he concluded.
