Some large companies were considering hiking prices on their menu to cover the costs.
Fast-food workers across the state were celebrating a boost to their minimum wage today thanks to a new California law taking effect, but some large chains were considering hiking prices on their menu to cover the costs.
“One of the reasons that the prices have gone up a lot faster in the fast food industry relative other industries is the fact that markup has also gone up, which is basically the difference between prices and the actual operation costs that businesses incur in order to render their prices,” Bustamante said.
Industry representatives, including the California Restaurant Association, had indicated that the wage increase would be burdensome to some owners, noting that many fast-food outlets are operated by small business owners under franchise agreements with restaurant chains. The company provides “informed pricing recommendations” as its franchise locations, but final pricing is at the discretion of franchisees.
Yum! Brands previously stated “its franchisees independently own and operate their restaurants in accordance with local market dynamics and comply with all federal, state, and local regulations while continuing to provide quality service and food to our customers via carry out and delivery.”
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