CORP/BIZ Cost Of Running A McDonalds Jumps $250,000 In CA Due To Minimum Wage Hikes

Blacknarwhal

Blacknarwhal

Let's Go Brandon!
Yipes.

The $25 Big Mac can't be far now.

Fair use cited so on and so forth.

Cost Of Running A McDonalds Jumps $250,000 In CA Due To Minimum Wage Hikes | ZeroHedge

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Cost Of Running A McDonalds Jumps $250,000 In CA Due To Minimum Wage Hikes​


By Mish Shedlock of MishTalk

Prices at fast food restaurants in California are set to jump in April as huge minimum wage hikes kick in. Escalating restaurant prices won’t be limited to California.





Expect to Pay More

California already has some of the highest fast food prices in the nation. Expect to pay still more, and not just in California.

The Wall Street Journal notes Burritos and Big Macs to Cost More in California as Pay Rises

Minimum wage for California fast-food workers is set to rise to $20 an hour in April, a 25% increase from the state’s broader $16 minimum wage. Restaurants including McDonald’s, Chipotle, Jack in the Box and others say they will raise menu prices in California in response, with some McDonald’s franchisees estimating hundreds of thousands of dollars per restaurant in added labor costs.
“Everyone is going to have to pay more,” said Jack Hartung, chief financial officer of California-based Chipotle Mexican Grill. Chipotle has raised its menu prices four times in the past two years and expects to increase them a further 5% to 9% in its California restaurants to cover the higher pay required for workers.
The National Owners Association, a group of McDonald’s franchisees, estimated it will cost Golden Arches operators an additional $250,000 annually per restaurant, an amount that can’t readily be absorbed, according to an email from the group last September.
Burger King aims to install more digital-ordering kiosks in its U.S. restaurants, with California now a focus, said Josh Kobza, chief executive of parent company Restaurant Brands International, in an interview.
Aaron Noveshen, founder of San Francisco-based chicken chain Starbird, said he wants to recruit franchisees to open new locations outside of California, given escalating wage, building and other costs. “I do love it here, but there are a lot of forces that make it difficult to do business in California,” Noveshen said.
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Impact on Joe’s Grill and Susie’s Diner

Don’t think for one second that these wage hike only hit wealthy franchise owners. For starters, many franchise owners are deep in debt to buy that franchise.

In addition, how are Joe and Susie going to get help at $16 when McDonalds is paying $20?

The answer is they won’t. Effectively, $20 is the new minimum wage in California, and not just restaurants.

The franchise owner will weigh the cost of a kiosk vs shelling out $250,000 in wages. Joe’s Grill and Susie’s Diner don’t have that option.

Where Workers will Get a Raise on January 1



I discussed wages and other factors yesterday in 2024 Inflation Outlook: How Much Inflation Is Baked in the Cake?

The post today show the actual impact to franchise owners in California but it’s not just California businesses that are impacted.

Is Inflation Down? That’s What President Biden Says

Let’s tune into a White House Statement on inflation to discuss what’s real and what is imaginary.



For discussion, please see Is Inflation Down? That’s What President Biden Says

Transitory Inflation?

Economists now widely believe in the softest of soft landings. But here’s the key question: Is inflation transitory or is the recent decline of inflation transitory?

I suggest it’s the decline in inflation that is transitory until the Fed delivers a recession.
 
energy_wave

energy_wave

Has No Life - Lives on TB
Why give these soy boys such a huge minimum wage when Klaus says they will own nothing and eat bugs.
 
ShadowMan

ShadowMan

Designated Grumpy Old Fart
Elza said:
I doubt that it will matter to the consumer. They'll still be lined up to buy this crap.
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Very very very rarely eat out anyway, so no major dent in my doughnut. Besides I make a FAR BETTER burger at home. AND.....if you saw what actually goes on in the back of restaurants you'd think a dozen times before eating at one. I've done Food Sanitation Inspections....UGH!! :kk2:

I'll eat at home - thank you very much!
 
packyderms_wife

packyderms_wife

Neither here nor there.
Kathy in FL said:
The menu is going to shrink. But I have to question whether this even includes employment, taxes, and benefits. If it doesn’t that $250,000 probably doubles.
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Their menu has already shrunk by about 30% since the beginning of the scamdemic. No more salads, side salads, grilled chicken sammies, veggie wraps, etc., and 97% of the time their ice cream machine is out of order, and the last time I was in one of their stores they said they hadn't had the apple pies in almost two years because they are on back order. The size of their big mac is about half the size it used to be as well.
 
packyderms_wife

packyderms_wife

Neither here nor there.
ShadowMan said:
Very very very rarely eat out anyway, so no major dent in my doughnut. Besides I make a FAR BETTER burger at home. AND.....if you saw what actually goes on in the back of restaurants you'd think a dozen times before eating at one. I've done Food Sanitation Inspections....UGH!! :kk2:

I'll eat at home - thank you very much!
Click to expand...

Big mac in a bowl, can be made at home, and is very good!
 
packyderms_wife

packyderms_wife

Neither here nor there.
tnphil said:
I don't recall the chain, but watching an ad recently, they were describing adjectives for their burgers. I turned to my wife and said "thin".
Two burger patties were likely thinner than one patty five years ago.
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Smash burger that’s paper thin?
 
20Gauge

20Gauge

TB Fanatic
Kathy in FL said:
The menu is going to shrink. But I have to question whether this even includes employment, taxes, and benefits. If it doesn’t that $250,000 probably doubles.
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Having run one before, I would estimate it does not.

They average between 100-150 people on the payroll, add another $5 per hour and then figure the normal days per year, and you get close to $200k in my estimates. So no it most likely does not include the payroll / bennies / etc
 
20Gauge

20Gauge

TB Fanatic
greysage said:
Wonder if that $250,000 is including the additional payroll taxes? Sounds like it's possible that McD's in Cali are going to have to increase weekly sales revenue at least $5000.
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Wages on average for a Franchise is about 20% of the total costs of running the place. For a MCD owned place it is closer to 35%.
 
BornFree

BornFree

Came This Far
Profit of Doom said:
Stopped at a McDonald on the road couple of days ago. Tried to figure out the kiosk inside, got no help from the counter. Left and did the drive-thru.
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Yup- I had the same experience at a Wendy's. Buttons would not repond without pushing multiple times. Have to search through categories to get basic things. Prices for large and small not listed. Can't order more than one of the same item each cycle without returning to the main menu. Main menu changes each time. Can't do customizations. And a line of customers behind. After 5 minutes of getting nowhere then I finally just walked out. Total Junk. And whoever wrote the software should be fired.
 
Dennis Olson

Dennis Olson

Chief Curmudgeon
_______________
You use the app to order. There are special numbered parking spaces. You park in one of them and place your order via the app. Part of the process is giving them the reserved parking space number. You pay via the app too. Then you wait 5 minutes, they bring your food, and you’re done. Works great.

The order is always right because you don’t have to give it to some turd whirled puta who can’t speak a word of English.
 
PghPanther

PghPanther

Has No Life - Lives on TB
McDonald's shouldn't exist anymore...................their food doesn't taste good........ nor is it cheap anymore.....nor is it prepared in a clean environment...........nor does it have any health value.

In fact they have all the appeal today as coming down with a case of syphilis.

Its inner city Negro food.....its illiterate illegal immigrant food...........stay away from them and their junk like you would with a ghetto or a border crisis.

www.mcdonalds.com

Black & Positively Golden | McDonald’s

McDonald's Black and Positively Golden® educates and helps to empower the expression of Black Excellence. Find resources, events, and more!
www.mcdonalds.com www.mcdonalds.com
 
Bad Hand

Bad Hand

Veteran Member
There isn't a fast food restaurant in this county. The closest one is 40 miles oneway, 80 miles round trip. There are some in Jackson, WY and it is a 70 mile round trip over Tetons Pass which has a 10% grade.
 
O

Old Gray Mare

TB Fanatic
Elza said:
I doubt that it will matter to the consumer. They'll still be lined up to buy this crap.
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Maybe, maybe not. Micky D's is currently catching blow back for raising their prices to consumers. IMO the company has lost sight of it's original mission of cheap, relatively decent tasting fast food.
 
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