Some California restaurants face stark realities, burdens after minimum wage increase

But for some -- and not just fast food franchise owners -- the newly raised bar for compensation also marks a pivotal point for restaurants to remain competitive in an already difficult post-pandemic landscape. The industry with famously thin margins is once again being pushed to make monetary and operational adjustments to stay afloat, all without compromising consumer expectations.

"Coming out of a time where restaurants, who were essential workers during the pandemic and fought so hard to keep their doors open and to keep teams employed, now have another major impact on our ability to keep our teams happy and to keep our doors open, and to continue to offer affordable options for our diners," she continued. "It's another massive challenge on the heels of just kind of getting our feet back on the ground.

Valdez, who previously worked in fine dining at Thomas Keller's Bouchon in Beverly Hills, opened "with a pooled house and that was groundbreaking at the time," she said of the equitable pay structure that divides tips between the kitchen and service staff evenly. Ultimately, Valdez said this culmination of increased costs for operators have to go somewhere: "It's going to shift the landscape for the diner -- we are going to see increased menu prices and that is just a byproduct of of this."Even Michaela Mendelsohn, who was appointed to Gov. Gavin Newsom's Fast Food Council last fall before AB 1228 was signed into law, is seeing the immediate financial impact on her restaurants.

To cut costs and stay afloat, Mendelsohn said their restaurants have had to reduce hours by roughly more than 10%, simplify menus, and implement new technologies such as automated ordering kiosks, which she explained can have a long learning curve for customers and hasn't helped save any money in the short term.

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