Restaurants are now making surprising closures in California as more announces come forward of the shutters in the golden state.
Rubio’s Coastal Grill has shut down almost 50 locations, blaming California’s new fast food minimum wage law.
Starting in April, the state implemented new legislation requiring fast-food workers to be paid $20 an hour, $4 more than the state’s $16 standard minimum wage.
Since this law kicked in, the Southwestern chain closed 48 locations as of last week, blaming it for making their business unsustainable.
Of the 48 locations closed, 11 were in Northern California, 24 were closed in the Los Angeles area and 13 were in San Diego, according to the restaurant.
“Making the decision to close a store is never an easy one,” the store said in a statement.
“Rubio’s Coastal Grill…after a thorough review of its operations and the current business climate, has decided to close 48 underperforming locations in California as of May 31, while keeping 86 stores in California, Arizona, and Nevada open.”
Jot Condie, president and CEO of the California Restaurant Association, told local ABC affiliate KXTV-TV that Rubio’s closings are just an early glimpse into what California can expect moving forward.
Condie also says if the state’s newly proposed $18 standard minimum wage is approved by voters in November, fast-food spots aren’t going to be the only ones jumping ship and leaving California.
“Daily headlines have chronicled job losses, reduced working hours, restaurant closures, and higher prices for California’s inflation-weary consumers as a direct result of this minimum wage hike,” Condie said.
“Feedback from our members suggests this has become a breaking point for many small restaurant businesses.”
And these companies raised food prices have been up since the law took effect, reports The-Sun.
“Since April in California, Wendy’s increased prices by 8 percent, Chipotle’s prices have increased by 7.5 percent, and Starbucks prices are up by 7 percent.”
McDonald’s also announced it will be raising prices, with many other fast-food franchises announcing hiring freezes as well.
Although fast-food companies are blaming this mandatory increase in wages for straining their pockets and forcing them to raise prices and cut back, much of the fast-food industry saw drastically increased markups over the past decade, helping pave the way for record-level industry profits, according to research by the Roosevelt Institute.
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Also Read: An Unexpected Retailer Is Now Closing All Stores in Illinois
Other Economy News Today
An unexpected restaurant now abruptly closes 7 locations in one state after revealing plans to shutter a total of 36.
TGI Fridays is closing a total of seven restaurants in one state as part of the company’s ongoing growth strategy.
This comes after the chain abruptly closed 36 locations across 12 states in at the beginning of the year, per The-Sun.
The restaurant chain will pull the plug on seven locations across the state of New Jersey in the coming weeks.
Today, Fridays will welcome in famished diners at its location in Brick for the final time.
“As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays,” said Weldon Spangler, CEO of TGI Fridays earlier this week.
“We are at the helm of a pivotal moment that will allow us to explore boundless advancement, expansion, and innovation to keep delivering ‘That Fridays Feeling’ that our fans know and love.”
Before the closures, TGI Fridays had about 270 US locations, according to the company’s website.
“As part of the store closures, TGI Fridays is offering more than 1,000 transfer opportunities, which represents over 80% of total impacted employees,” the company previously said in a statement.
“Our top priority has always been delivering a superior experience for each and every TGI Fridays guest, and we’ve identified opportunities to optimize and streamline our operations to ensure we are best positioned to meet – and exceed – on that brand promise,” said Ray Risley, US president and chief operating officer, in the release.
Eight other locations were sold to former CEO Ray Blanchette, a longtime stakeholder who will acquire the previously corporate-owned restaurants.
The sale comes as major changes have been made to the brand’s leadership, including the news of Weldon Spangler being made CEO.
“As we continue along our path of transformation to revitalize the Fridays brand and implement a long-term growth strategy, we see a bright future for TGI Fridays,” said Spangler in a statement.
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