California’s new fast food minimum wage law has been making headlines since it went into effect in April 2024. The responses to the bill have been overwhelmingly negative, citing an increase in the cost of fast food, layoffs, transitioning to AI employment, and even restaurant closings.
While some of the rumors about the bill’s consequences have proven to be false news, one restaurant chain has officially announced that it will be moving its headquarters from Southern California to Atlanta, Georgia, to save money and ignite the “next wave of growth.”
Blaze Pizza Is Moving Its Headquarters Out of California
Blaze Pizza first opened its doors in 2011 in Irvine, California. Owners Rick and Elize Wetzle found immense success and opened their second location only months later in Pasadena, where they later set up their headquarters.
Now, thirteen years later, Blaze Pizza proudly has 330 restaurants across 38 states, though 90 of them can be found in California.
Blaze Pizza Announces It Will Be Leaving California
After more than a decade in California, Blaze Pizza has shocked Golden State residents by announcing that it will abandon its home state and move its headquarters to Atlanta, Georgia, by September 2024.
It’s important to understand that the company has not announced any plans to close its 90 California locations. It will simply be moving its corporate offices. However, many say this decision is undoubtedly the result of Governor Gavin Newsom’s fast food bill.
California’s Fast Food Minimum Wage Increase
With almost 30% of all its restaurants in California, it would make the most sense for Blaze Pizza to keep its headquarters in the Golden State. But after the minimum wage for fast food workers in California increased from $16 to $20 in April 2024, the company wants, and possibly needs, to focus its attention elsewhere.
Although Blaze Pizza CEO Beto Guajardo didn’t mention the minimum wage hike in his speech, he did say, “Moving our corporate headquarters to Atlanta will help us drive our next wave of growth.” Hinting that they will be opening new restaurants in Georgia and throughout the South instead of expanding in California.
Gavin Newsom Has Faced Significant Backlash for His Minimum Wage Law
Blaze Pizza’s decision to move its headquarters out of California is just the latest in a long line of negative side effects of Gov. Gavin Newsom’s fast food minimum wage law.
When Newsom passed the law, he proclaimed California was getting “one step closer to fairer wages, safer and healthier working conditions, and better training by giving hard-working fast food workers a stronger voice and a seat at the table.” But that’s not exactly what’s happened.
Several Fast Food Companies Have Laid Off Thousands of Workers
Several big-name fast food chains have already laid off thousands of employees to reduce labor costs in direct response to the bill. In fact, the Hoover Institution reported that nearly 10,000 Californians working in fast food have lost their jobs since Newsom passed the bill.
From Pizza Hut to McDonald’s, Burger King, Chipotle, and many others, companies have decided that the only way to stay profitable is to work with a smaller staff.
One California-Based Fast Food Chain Has Filed for Bankruptcy
Although many of the big-name companies will be able to adjust and continue to thrive in California and throughout the country, other smaller corporations simply can’t survive paying their employees 25% more than they did last year.
California’s popular Mexican Rubio’s Coastal Grill filed for Chapter 11 bankruptcy and closed 48 locations after the bill went into effect, devastating many of their long-time customers.
The California Business & Industrial Alliance Argues This Law Is Extremely Problematic
It’s no surprise that fast food chains are frustrated by Gov. Newsom’s minimum wage law, but the California Business and Industrial Alliance (CABIA) is also quite disappointed.
The organization has publicly slammed the governor for raising the minimum wage for fast food workers to $20. It reports that various businesses throughout the state now have to offer the same wages or lose their workers, increase their prices, shut down locations, and fire employees, none of which they want to do.
CABIA California Published an “In Memoriam” Article
The CABIA even published an article entitled “In Memoriam: Victims of Newsom’s Minimum Wage,” which named several companies that have shut their doors thanks to the new law.
The article noted that Pizza Hut has laid off hundreds of delivery drivers, MOD Pizza closed 5 California locations, Burger King will be decreasing workers’ hours in the state, and a McDonald’s franchise owner with 18 restaurants in the state is considering increasing menu prices and reducing store hours.
Blaze Pizza Says It Won’t Be Laying Anyone Off in the Move
Despite all of this bad news, one positive outcome of Blaze Pizza’s decision to leave California is that it won’t be laying off any restaurant employees or closing any of its 90 California locations… for now.
The company noted that “the more than 7,500 restaurant-level employees are not part of this reorganization and will not be affected.” However, about 60 of its corporate employees will have to decide whether to keep their jobs and move to Georgia or stay in California and look for other employment.
California Is Just Too Expensive
While Gov. Newsom’s minimum wage increase bill is undoubtedly changing the fast food industry in California, it’s important to note that it may not be the only factor leading to these monumental consequences.
Even without the minimum wage hike, it’s wildly more expensive to operate a business in California than it would be in other states, such as Georgia. Between personal and professional taxes, rent, and the general cost of living, the Golden State has seen a huge exodus from businesses within almost every industry.
What’s Next for Fast Food in California?
There’s no doubt that California is struggling to keep both its businesses and its residents happy. While Gov. Newsom and his team are trying desperately to ensure Californians can actually afford to live there, they are alienating the businesses that employ them.
It’s hard to say what’s next for California’s fast food industry, but at the moment, it seems as though things will likely get worse before and if they ever get better.
