California’s decision to raise the minimum wage for fast food workers to $20 an hour has significantly impacted the restaurant sector, resulting in the closure of at least 16 fast-food locations in the Fresno area since early 2025.
This wave of restaurant closures has left numerous empty storefronts in cities like Fresno, Clovis, Hanford, Merced, Kerman, and Visalia. Franchise owners are expressing concerns that the skyrocketing labor costs are compounding existing challenges, such as increasing food, insurance, and utility expenses.
Brands affected by this trend include KFC, Carl’s Jr., Five Guys, Wendy’s, Popeyes Louisiana Kitchen, and Jack in the Box.
Restaurant owners argue that these closures highlight the tough environment for fast-food businesses in California, where rising expenses continue to outpace sales.
“Almost 80% of operators anticipate overall cost increases across utilities, insurance, labor, and food,” noted Giotto Condi, the CEO of the California Restaurant Association.
On top of this, consumers are pulling back on dining out due to economic concerns, leaving business owners strained under the weight of escalating costs and declining demand.
“In this industry, with profit margins hovering around 1% to 3% on average in California, there’s hardly any room for error,” Condi remarked.
The $20 per hour wage went into effect on April 1, 2024, after Governor Gavin Newsom approved Assembly Bill 1228, which specifically targets chain fast-food establishments with at least 60 locations nationwide. For context, the statewide minimum wage stands at $16.90 an hour.
Since this law was established by the California Legislature, it bypassed a public vote, meaning residents won’t have a chance to weigh in on a statewide wage mandate.
For franchisees, the increased wages come directly from business earnings, complicating matters for small business owners already facing a slew of rising costs.
KFC appears to be among the most affected, with six closures spanning from downtown Fresno to Clovis since 2025, including a newer location in northwest Fresno. This year also saw the shutdown of its Kerman branch.
Carl’s Jr. has shuttered three locations in the Central Valley, including the Fresno site at First Street and Shaw Avenue. The McKinley Avenue restaurant closed earlier in the year, followed by the Visalia branch just last month.
Five Guys closed its Merced outlet on June 26 and its Hanford branch shortly after on July 4. Jack in the Box has also ceased operations at its Cedar and Neath Avenue location, while Popeyes is set to shut down its First Street and McKinley Avenue site in spring 2025. Wendy’s plans to close its downtown Fresno restaurant by late 2025 and its West Shaw Avenue location has already closed earlier this year.
In the midst of this turmoil, the California Fast Food Council, which is designed to oversee the fast-food industry, has not convened in months, even with a $1.1 million budget provided by taxpayers. It hasn’t held a full meeting since a minor subcommittee hearing back in February 2025.
Commissioner Nick Hardeman stepped down in May 2025 after being appointed to another state housing commission by Newsom. The lack of a new appointment means that the council cannot meet legally, despite state law requiring at least biannual meetings.
