The closure marks a significant impact of California’s new $20 minimum wage for fast food workers. Franchise owner Scott Rodrick described the decision as “gut-wrenching.”

He stated, “This is a gut-wrenching day for my family,” emphasizing the personal toll this closure has taken on him and his team.

The notice thanked the 19th Avenue and Ingleside neighborhoods for their patronage over the past three decades, reflecting the deep community ties the restaurant had established.

This law, effective April 2024, targets chains with 60 or more locations nationwide, aiming to improve worker wages but adding pressure on franchise owners.

Rodrick, like many franchise owners, struggled to cope with the increased labor costs, which significantly strained his business finances.

These rising costs, compounded by the $20 minimum wage mandate, created an unsustainable financial burden for his franchise.

He emphasized his commitment to his team, stating that most employees would likely remain within the McDonald’s network.

A Placer.ai study found that fast food chains raised menu prices by mid-single digit to mid-teen percentages to offset higher labor costs, impacting customer traffic and overall profitability.

The restaurant cited rising food, utility costs, and significant minimum wage increases as key factors in their financial struggles.

These restaurants leveraged competitive pricing strategies to attract customers who find fast food options less appealing due to higher prices.

Their marketing highlights the competitive edge sit-down restaurants have over traditionally cheaper fast food chains.

While the law aims to support workers, it also places significant financial pressure on franchise owners. The industry must adapt to balance fair wages with sustainable business operations in this evolving economic landscape.