Fast-food franchisees in California are concerned a proposed piece of legislation would increase costs and undermine the franchise model in the state if it becomes law.
This month, California state senators will vote on Assembly Bill 257, also known as the Fast Food Accountability and Standards Recovery Act. It has already passed in the Assembly. Proponents such as Service Employees International Union argue it will address unsafe working conditions, wage theft and other issues in the sector.
Meanwhile, franchisees who spoke to FOX Business voiced concerns about parts of the bill that create a sector council and make franchisors jointly liable for labor violations by its franchisees.
Fast Food Sector Council
According to the current text of AB 257, the 13-person Fast Food Sector Council would be charged with establishing wage rates, working hours and other standards in the sector that the Division of Labor Standards Enforcement would have to enforce. There is a carve-out for valid collective bargaining agreements. The governor would select some council members, while the Assembly speaker and the Senate Rules Committee would choose others.
Franchisees criticized it for consisting of unelected people and worried it would set standards that would increase costs for both franchise owners and consumers amid scorching-hot inflation.
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"The biggest part about it is the affordability," said Sanna Shere, a businesswoman who owns Burger King franchises in the state. "We're very low profit and margins."