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The reasons the McDonald's at San Francisco Stonestown mall closed

By
Updated  June 24, 2024 7:07am PDT
San Francisco
KTVU FOX 2

New California law takes effect with $20 minimum wage for fast food workers

Some fast food franchise owners say they are considering menu price hikes and slower hiring in response to California's new $20 hourly minimum wage. UC Berkeley labor expert says research shows historically, employment has not decreased during past minimum wage hikes.

SAN FRANCISCO - The McDonald’s at the Stonestown Galleria shopping mall in San Francisco closed Sunday after 30 years.

"We are thankful to have been part of your daily meal routine, either for an Egg McMuffin in the morning or a Happy Meal with the kids after an afternoon of shopping at Stonestown," read the announcement posted on the front door of the Winston Drive restaurant, The San Francisco Chronicle reported. 

Franchisee Scott Roderick told the Chronicle there were two main reasons for shuttering its doors: The price of the rent and California's $20 minimum wage for fast-food workers, which went into effect April 1. 

Democrats in the state Legislature passed the law in part as an acknowledgement that many of the more than 500,000 people who work in fast food restaurants are not teenagers earning some spending money, but adults working to support their families.

The law was supported by the trade association representing fast food franchise owners. But since it passed, many franchise owners have bemoaned the impact the law is having on them, especially during California’s slowing economy.

Alex Johnson owns 10 Auntie Anne’s Pretzels and Cinnabon restaurants in the San Francisco Bay Area. He said sales have slowed in 2024, prompting him to lay off his office staff and rely on his parents to help with payroll and human resources.

Increasing his employees’ wages will cost Johnson about $470,000 each year. He will have to raise prices anywhere from 5% to 15% at his stores, and is no longer hiring or seeking to open new locations in California, he said.

"I try to do right by my employees. I pay them as much as I can. But this law is really hitting our operations hard," Johnson said.

The Associated Press contributed to this report.