Here’s why a growing coalition of local restaurant owners, social justice advocates and ethnic business leaders STRONGLY OPPOSE AB 1228.
AB 1228 is An Attack on the Rights of Local Franchised Restaurant Owners
- Local franchised restaurants provide a unique opportunity for entrepreneurs – many of whom are women, immigrants and veterans – to become small business owners.
- Approximately 70% of franchisees only own one restaurant and many have invested their lives and life savings into their small business.
- Franchise owners maintain control over operating their restaurants, including hiring, employee wages, scheduling, benefits, and workplace standards.
- AB 1228 would force national fast-food corporations to exert significantly more control over local franchised restaurants by making them legally liable for local employment decisions.
- As a result, AB 1228 could turn locally run small businesses essentially into corporate run restaurants - taking away the rights of thousands of small business owners to run their own restaurants and resulting in the loss of decades of hard work and their life’s investment.
AB 1228 would Shut Down Local Restaurants & Eliminate Jobs
- AB 1228 would fundamentally destroy the franchise system in California by forcing more corporate control over local franchised restaurants and opening up a whole new category of lawsuits against these small businesses.
- AB 1228 would lead to higher costs that will be unsustainable and result in the shutdown of locally owned restaurants.
- Shutting down local restaurants would eliminate fast-food jobs. Nearly 80% of fast food workers are women and people of color. Therefore, AB 1228 would disproportionately hurt disadvantaged and communities of color.
AB 1228 would Lead to Higher Food Costs
- AB 1228’s new bureaucracy and frivolous lawsuits would drive up the cost of operating local franchised restaurants. This would lead to higher food costs for consumers at a time when families are already struggling to make ends meet.
AB 1228 would Authorize a Whole New Class of Frivolous Lawsuits Against Local Restaurants
- AB 1228 would create a whole new class of lawsuits that would make it easier for trial lawyers to sue both the local fast-food restaurant and the national restaurant corporation.
- This provision would result in thousands of new lawsuits that would line the pockets of trial lawyers, at the expense of local restaurant owners.
AB 1228 is Unnecessary
According to the
Employment Policies Institute,
which reviewed wage claims from the California Department of Industrial
Relations for the period of 2017 – 2022, the quick-service restaurant industry
accounted for only 1.6% of wage claims despite representing
3.2% of California’s
- In 2022, franchised quick-service restaurants represented less than 1% of all wage claims filed in the state (0.65%) despite representing 1.7% of the workforce.
- Fast-food workers, like all workers, are already covered by California’s strongest-in-the-nation labor protection laws and multiple state agencies are responsible for enforcing them.
- Rather than pass an unnecessary new law that will incentivize frivolous lawsuits and add more bureaucracy and red tape, we should increase funding for stronger enforcement and accountability from the state agencies that already exist.