In early June 2024, several articles appeared stating that the famous fast food chain McDonald’s was considering leaving California due to Governor Gavin Newsom’s minimum wage increase law.
However, it’s since come to light that these articles weren’t based on factual information. So, let’s find out what’s really going on and whether or not any McDonald’s restaurants will be closing their California locations this year.
“Fast Food Luxury: McDonald’s Considers Leaving California”
Several articles were published at the start of June 2024, telling readers that McDonald’s may be leaving the Golden State behind after Governor Gavin Newsom raised the minimum wage for fast food workers from $16 to $20.
Popular news outlets all shared their version of the intriguing story. However, it was one article in particular that received the initial confrontation from readers.
Reader Reached Out to Snopes Regarding the McDoanld’s Article
On June 11, 2024, DailySparkUp.com published the article “Is Fast Food Becoming a Luxury? McDonald’s Might Exit California as 80% of Americans Struggle to Afford Fast Food.”
And the very next day, a reader emailed another popular news outlet, Snopes, to find out whether or not this information had any validity. Snopes decided to investigate and find out if the article published by DailySparkUp and various other reputable sites came from any actual evidence.
Digging Into the Details Behind the McDonald’s Rumor
First, Snopes wanted to find out if “80% of Americans” were struggling to afford fast food, as the title claimed.
This statement turned out to be 100% true; a survey conducted by LendingTree in May 2024 reported that more than 78% of American consumers “view fast food as a luxury because it’s become increasingly expensive.”
McDonald’s Is “Reportedly” Leaving California
Snopes then investigated the claim that McDonald’s had made an announcement regarding closing their 1,300 restaurants in the Golden State.
The original article in DailySparkUp read, “McDonald’s is reportedly considering a drastic measure—exiting the California market altogether,” but it didn’t cite any source for this brazen statement.
The Article Continued to Blame Gov. Newsom for McDonald’s Exodus From California
The article continued, “Rumors swirl about the potential closure of McDonald’s 1,300 California locations due to these elevated operational costs.”
Author Kate Smith blamed California Governor Gavin Newsom’s increase in minimum wage for fast food workers for McDonald’s apparent decision to leave the state. Smith wrote, “[Gov. Newsom’s law] poses a considerable challenge for McDonald’s, especially in California, where they must now consider how to manage 70,000 employees being paid $20 per hour under the new legislation.”
Snopes Wondered if Kate Smith Is Even a Real Writer
To find out exactly where the writer, Kate Smith, got this information, Snopes did a deep dive into the DailySparkUp author.
They couldn’t find any additional information other than the site-provided bio, making them wonder if she really existed. Snopes even went as far as to say her photograph looked eerily similar to one that would be made by AI.
It’s More Likely That the McDonald’s Closing in California Rumor Started Elsewhere
While the investigation into author Kate Smith didn’t turn up any valuable information, the truth is that she is likely a copywriter who simply misread or misunderstood another similar title on the internet. Hence why she wrote “reportedly” when mentioning the McDonald’s closings.
Then, like a game of telephone, the story started spreading, with each news source using the others as evidence for their claim that McDonald’s “might” be closing some of its California restaurants due to the increase in minimum wage.
Is McDonald’s Actually Closing Its California Restaurants?
Let’s make one thing clear: McDonald’s, as a corporation, has made no mention of closing its California-based locations since Gov. Newsom’s minimum wage law went into effect. However, that doesn’t mean there is no truth to these rumors.
For example, Kate Smith may have read an article published by the CABIA (California Business and Industrial Alliance in USA Today, which explained, “A McDonald’s franchisee who owns 18 outposts in California is considering reducing store hours, hiking menu prices, and delaying renovations to offset the impact of the state’s $20 hourly minimum wage for fast food workers.”
Several McDonald’s Franchisees Have Announced Changes at California Restaurants
The truth is that many McDonald’s franchisees have announced that they will be either laying off employees, purchasing automated self-service kiosks to replace them, increasing their prices, and cutting back on store hours to negate the newly increased cost of labor in California.
Therefore, it’s not such a stretch to think that some franchisees with several locations may decide to close some to cut back on overhead costs and focus on thriving restaurants.
Other California Fast Food Restaurants Have Actually Closed Locations
Additionally, the statement that McDonald’s may choose to close a few of its many California locations might have simply been a theory based on the fact that several other fast food chains have already closed dozens of doors.
Since Gov. Newsom’s minimum wage law went into effect in April 2024, the CABIA reported that Rubio’s, a popular Mexican restaurant, closed “48 locations due to the ‘rising cost of doing business.’” It also wrote that MOD Pizza “shuttered some of its California locations” and that the owner of Vitality Bowls said that “closing stores is a last resort,” but one that they may have to take.
California Fast Food Chains Will Likely Make Changes, Thanks to Gov. Newsom’s Minimum Wage Law
It’s important to understand that while McDonald’s is not closing its 1,300 California locations, the company, and more specifically, its various franchisers, will likely be making some big changes this year in California.
From rising prices to cutting back on hours, laying off employees, and opting for AI kiosks, California’s fast food industry is rapidly changing. However, California residents can rest easy knowing McDonald’s is not fleeing the state.
