California Governor in PANIC as McDonald’s LEAVES the State

A McDonald’s restaurant that served customers for 30 years in San Francisco recently closed its doors forever.

This closure was not due to poor food quality or lack of customers but because the economics simply no longer work.

Scott Rodrik, the franchise owner, cited unprecedented economic changes and ill-timed legislative mandates as reasons for shutting down, calling the decision gut-wrenching for his family.

This story is far from isolated.

Over the past 18 months, California’s fast food industry has lost between 10,000 and 23,000 jobs, depending on the study.

The root cause lies in California’s minimum wage increase for fast food workers, which jumped from $16 to $20 per hour on April 1, 2024.

This 25% overnight increase affected more than 500,000 workers at approximately 30,000 fast food locations across the state.

While $20 an hour sounds like a win for employees, the reality is more complex.

Studies from reputable institutions—including the National Bureau of Economic Research and Berkeley Research Group—confirm significant job losses linked directly to the wage hike.

Even the union that advocated for the increase acknowledged the steep decline in employment.

The layoffs began even before the wage law took effect.

For example, Pizza Hut franchises preemptively eliminated all delivery driver positions, cutting over 2,000 jobs across Southern California and beyond.

Rubio’s Coastal Grill, a beloved chain credited with inventing the fish taco, abruptly closed 48 California locations and filed for bankruptcy, citing rising labor costs, reduced foot traffic, and increased expenses as fatal blows.

Franchise owners are feeling the pressure.

Alex Johnson, who operates 10 fast food locations, estimated that the wage hike would cost him an additional $470,000 annually.

Scott Rodrik, who owns 18 McDonald’s locations, raised prices by 5 to 7 percent in just three months and postponed essential capital expenses like equipment upgrades.

This forced choice between paying workers and maintaining facilities reveals a broken business model.

The human cost is stark.

At Fosters Freeze in Lore, California, the owner closed the store on the very day the wage increase took effect.

Employees were shocked, some thinking it was a joke.

One assistant manager shared that many workers would rather earn $16 an hour than be unemployed.

Furthermore, workers who kept their jobs often saw their hours slashed.

A study found that 89% of California’s fast food workers had reduced hours since the wage increase, and 35% lost supplemental benefits.

This means higher hourly wages but less overall income for many.

Prices have soared.

McDonald’s CEO Chris Kempczinski acknowledged that wage increases would necessitate higher prices.

Between September 2023 and December 2024, California restaurant prices rose nearly 14.5%, almost double the national average.

McDonald’s menu prices have doubled since 2014, with iconic items like the McChicken sandwich jumping from $1 to $2.99.

The company also noted that customers earning less than $45,000 a year are increasingly eating at home rather than dining out.

Not all franchises are failing.

Some, like the Harper Howey family, who own 21 McDonald’s in Los Angeles County, continue to operate successfully by adapting through careful cost management, such as scrutinizing food waste and portion control.

Yet, for many businesses, the pattern is clear: rising costs, rising prices, fewer jobs, and shuttered restaurants.

California’s fast food industry is undergoing a painful transformation.

Workers who remain employed earn more per hour but often work fewer hours.

Customers pay more for familiar meals.

And many franchises that cannot adapt face closure.

The consequences extend beyond hamburgers—they reflect broader economic challenges and uncertainties about the future of work in California and beyond.

For residents, workers, and policymakers, understanding these dynamics is crucial.

The decisions made today will shape the livelihoods of millions for years to come.