Franchise owners and operators have a new boss: California’s Governor signs the FAST Recovery Act on Labor Day (Part I).

FAST Recovery Act

California franchise owners and operators are now managed by their new boss, the Fast Food Council.

On Labor Day, Monday, September 5, 2022, California’s Governor Gavin Newsom signed into law Assembly Bill 257 (also known as the Fast Food Accountability and Standards Recovery Act or “FAST Recovery Act”).

This FAST Recovery Act creates a 10 member Fast Food Council that will set industry standards to be followed by all California franchise owners and operators. In fact, the Fast Food Council’s newfound power in dictating “industry standards” will permeate every aspect of the employee-employer relationship, including the power to increase the minimum wage from $15 to $22 per hour in just one year.

Who does this FAST Recovery Act apply to? The short answer is: franchise owners and their employees. The FAST Recovery Act states specifically that it applies to fast food chains which are defined as “a set of restaurants consisting of 100 or more establishments nationally that share a common brand, or that are characterized by standardized options for décor, marketing, packaging, products, and services.”

If you are a California franchise owner or operator, you have to face the facts: your new “boss” is the new 10-member Fast Food Council put in place by the state government and you now manage your employees according to the Council’s rules. The FAST Recovery Act reaches far and wide and will have an enormous effect on ALL California franchise owners and operators and the approximately 550,000 California fast-food workers. The new law applies to franchises most of us visit on a weekly (if not daily) basis such as McDonalds, Burger King, Starbucks, and Coffee Bean & Tea Leaf, etc.

If you employ people at all in California, you should be aware that the state of California is moving in a new and unchartered direction- one where the state dictates to employers how to run their businesses and how to manage their employees. It is not farfetched to say that employers in other industries may be next.

Why did California lawmakers and Governor Newsom believe enacting the FAST Recovery Act was necessary? They believe the new law will reduce wage theft, sexual harassment, and a lack of compliance with current labor standards. (Yes, your read that correctly. To increase compliance with current labor standards, the California governor and lawmakers believe more laws are necessary). The new law also purports to provide fast food workers with more say in their working conditions. Finally (and most importantly), the proponents believe this new law will help the workers by suddenly increasing their wages by as much as $7 per hour in one year. On the surface, these goals seem lofty and noble enough.

Unfortunately, these goals will likely not outweigh the negative impact the new law will have on the people it purports to protect. We will explain in further detail in Part II of this series why the age old adages, “no good deed goes unpunished” and “you can’t get something for nothing,” apply here.