New Analysis: California State Data Show A.B. 1228 Unfairly Targets Franchisee-Owned Restaurants
California’s franchisee-owned fast food restaurants represent less than one percent of all wage claims
Publication Date: April 2023
Arlington, VA – Today, the Employment Policies Institute (EPI) released an updated analysis of California wage claim data related to fast food restaurants and franchisee-owned establishments. The update includes California Department of Industrial Relations data on wage claims through 2022, and provides a breakdown of the fast food industry by franchisee ownership.
The new update undermines the central argument to Assembly Bill 1228, which would create joint liability between an independent small business owner (franchisee) who owns a recognizable brand, and the company that establishes the brand’s trademark (franchisor).
The new data shows that not only does the fast food restaurant industry account for far fewer wage claims than other industries, those owned by franchisees are responsible for less than one percent of all wage claims filed in California – which is even lower than the share of franchisee-owned establishments in the state:
- In 2022, wage claims from franchisee-owned fast food restaurants represented just two thirds of one percent (0.65%) of all wage claims filed in the state, while accounting for 1.7 percent of California employment.
- Just 102 franchise fast food establishments experienced a wage claim — representing less than one percent (0.77%) of the 13,366 franchisee-owned fast food locations in the state.
See the full study here.
EPI’s executive director Michael Saltsman issued the following statement:
“AB 1228 is just the latest California labor bill based on bad data. The numbers are clear: Quick-service restaurants, and franchisee-owned restaurants in particular, represent a fraction of total wage claims. Legislators should send this half-baked scheme to undermine small business owners back to the kitchen.”