Before they eat a new food tax, Californians ought to get a say. We’re the coalition leading an effort to give Californians a voice. Already coping with the rising cost of food, the crippling cost of living, and the uncertain economic climate, Californians are about to get an additional tax to go with it. Who are we? We make some of your favorite foods and drinks. We’re employees and small business owners. We’re consumers, like you, and we’re ordinary citizens. But we’re all united in our concern about a new law that California legislators and the governor are trying to force onto businesses and hardworking customers. That’s where the voters come in.
America’s leading antibusiness policy incubator, also known as the state of California, is at it again. The state Assembly passed the so-called FAST Recovery Act in January. It was approved by the Senate Appropriations Committee on Aug. 11. The next stop will be a vote on the Senate floor, followed by Gov. Gavin Newsom’s desk. If the bill becomes law, it will drive up fast-food prices as much as 22% and wipe out the franchise business model, which provides nearly 800,000 jobs in the state.
Assembly Bill 257 – known as the “FAST Act” – has been pushed through the legislative process under the guise of helping California workers in the counter-service restaurant community. If enacted, the bill – sponsored by the Service Employees International Union – would set aside existing labor laws in favor of new rules developed and enforced by 13 unelected political appointees with zero oversight. . . .In a typical quick-service business, profit margins are narrow, about 6 to 9 percent. To the extent that higher labor costs imposed by the unelected statewide council are not reflected in higher consumer prices, they will eat away at these narrow margins, causing even more businesses to close shop and deterring other would-be entrepreneurs from entering.
Capitol Weekly | Aug. 08, 2022
[If] AB 257 were to become law, we would not be able to provide the value on which our customers rely. They cannot afford higher prices, and they certainly do not want to pay higher prices for the food they enjoy when they’re already dealing with rising costs. We are doing everything we can to ensure customers can still afford our offerings, but this would be the straw that breaks the camel’s back. Even the Department of Finance was rightly concerned about AB 257’s potential to "raise long-term costs across industries." ... Voters agree. In fact, according to a recently released RG Strategies survey, 75% of voters agree that if the Food Sector Council in AB 257 causes price increases at counter service restaurants, they will frequent these restaurants less often.
I’m the CEO of Pretzel Power, a small franchise business started by my parents in 1993. We brought the first Auntie Anne’s Pretzels and Cinnabon locations on the West Coast. We currently operate 11 stores as a franchisee with locations in Pleasanton, Hayward, Milpitas, San Jose, Livermore and Tracy. . . .But my business is once again under attack, as California legislators are considering Assembly Bill 257, dubbed the Fast Food Accountability and Standards Recovery Act — that would raise costs at tens of thousands of locally owned restaurants at a time when record inflation is already causing operating costs to skyrocket and the annual cost of goods to increase at its highest level in over 40 years.
The restaurant industry in California has been my life ever since my father immigrated here 31 years ago and saved every penny to open his first Burger King franchise in Santa Ana. Since then, we’ve worked hard to grow our family business to 21 locations, providing opportunities for our 500 employees. Our story is the epitome of the American Dream and a powerful reminder of the opportunity the franchise business model provides. But our dream, as well as those of countless other small business owners in California, is under attack by pending legislation – AB 257, the so-called Fast Food Accountability and Standards Recovery Act. . .
I own and operate Saffron Indian Cuisine restaurant in Fairfield along with several Sourdough & Co. locations throughout the Bay Area. I am responsible for 46 employees and have worked hard these past two years to keep my doors open. It has been a struggle, but our restaurants weathered the storm while still taking care of our employees, giving back to first responders and serving our customers. . . . Counter service restaurants run on very low profit margins. Thus it is not hard to figure out how they would survive in the face of increased costs: They would be forced to make decisions such as increasing prices or offering fewer hours to employees. In addition, many prospective restaurants would simply not open if AB 257 moves forward.