The National Owners Association, representing McDonald’s franchisees in California, has criticized the state’s recently-passed AB 1228 as “draconian” and financially burdensome. In a memo obtained by FOX Business, the association stated that the legislation will have a projected annual cost of $250,000 per McDonald’s restaurant, which franchisees cannot absorb under the current business model. The bill includes provisions such as raising the minimum wage for fast-food workers to $20 per hour, applying to restaurants with at least 60 locations nationwide (excluding those that make and sell their own bread), and establishing a 10-person council to govern fast-food chains and set guidelines for working conditions and wages.
Governor Gavin Newsom, when signing the original version of the legislation, expressed a commitment to ensuring that fast-food workers share in the state’s prosperity and have a stronger voice. The bill was passed by the state Senate last Thursday. In response to AB 1228, the National Owners Association called on franchisees, suppliers, and McDonald’s to take specific actions to support California franchisees. These included establishing political action committees (PACs) and lobbying efforts, reducing costs in operations to save money for fast-food restaurants, and directing potential price increases towards operational improvements and labor-related research and development.
The NOA memo also raised concerns about a deal between a small coalition of franchisors, including McDonald’s, the National Restaurant Association, and the International Franchise Association, and the Service Employees International Union. The coalition allegedly negotiated the terms of the legislation without involving franchisees. The NOA warned that the passage of AB 1228 in California could set a precedent for similar efforts in other states and stressed the importance of remaining unified.
McDonald’s responded to the legislation by stating that AB 1228’s terms are different from the previous version of the bill, which the company deemed harmful. McDonald’s claimed to have worked collaboratively with the California Owner/Operator Task Force and others to protect the franchisees’ ability to make local business decisions and preserve their restaurants and employees. The company mentioned initiatives such as referring AB 257 to California voters in 2024 and increasing political engagement in the state. McDonald’s has formed a cross-functional team to develop an action plan and pilot innovative solutions based on best practices from other jurisdictions with similar legislation.
Overall, the National Owners Association’s memo showcased the concerns of McDonald’s franchisees in California regarding AB 1228 and called for support and action to mitigate the financial impact. McDonald’s responded by highlighting its efforts to protect franchisees’ interests and develop strategies to adapt to the legislation.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
