Frequently Asked Questions
What is the FAST Recovery Act?
AB 257 would enact significant, far-reaching and devastating legislation applicable to local restaurants that can be divided into two primary categories:
- The establishment of an unelected, accountable “Fast Food Sector Council” of political appointees to establish duplicative and conflicting standards on wages, hours and working conditions;
- The dismantling of the franchise model through the establishment of joint liability for restaurant franchisors and franchisees.
How is “Fast Food Restaurant” defined in the legislation?
AB 257 is misleadingly labeled. The legislation applies to all counter service restaurants with 30 or more locations nationwide where customers order at a counter, pay, then eat. Customers either take their food to go or sit at limited seating on the premises. The definition includes hundreds of branded restaurants in the following categories:
|Category 1||Category 2||Category 3|
|Juice and Yogurt Counters||Ice Cream Shops||Taquerias|
|Coffee Shops||Pizzerias||Mexican Food Restaurants|
|Bakeries||Sandwich Shops and Delis||Sushi Counters|
|Salad Bars||Burger Places||Asian Food Restaurants|
While proponents portray this legislation as an anti-corporate measure, the bill in fact hurts small business owners and local restaurant owners most. The majority of AB 257-impacted counter service restaurants are franchises, where business owners buy and operate individual locations in their communities. Most of these small business owners only own one or two local restaurants, and over a third of the owners are women. According to FRANdata:
- There are about 34,700 food franchises in CA, owned by about 14,422 franchisees.
- Among all food franchisees in CA, 69.4% of them (10,011) are single-unit franchisees, and 30.6% of them (4,411) are multi-unit franchisees, owning approximately 24,689 units.
- On average, franchisees from the food sector operate 2.4 franchised establishments in CA.
- By gender, approximately one-third of owners are female.
How does the sector council created by AB 257 work?
AB 257 strips decision-making authority from our elected representatives by empowering a council of unelected political appointees and special interests to make laws with no accountability to voters. This means voters have no say on laws that affect thousands of businesses and employees throughout California. California already features the strongest labor laws and highest minimum wage in the country. If elected officials feel there is a need for additional laws or higher wages, they should have that conversation for all industries in an open and honest forum.
Instead, the sector council can craft wage and labor standards for a single industry – the counter service restaurant industry. Local restaurant owners and managers will no longer make decisions on how to run their restaurants and manage their employees. Instead, the sector council will implement a one-size-fits all operating standard for thousands of restaurants across the state, whether they are located in populated coastal, rural or urban areas.
What does a sector council mean for local restaurant owners?
The sector council’s industry-specific mandates will increase operating costs for California’s community restaurants. Fewer restaurateurs will open establishments in California, which means fewer jobs in a critical industry. Over the years the restaurant industry has served as a first job for young people or a pipeline to the middle class for millions of workers who started at the ground floor and worked their way up to be owners or managers. But AB 257 will force local restaurant owners to make tough decisions to offset increased costs from the sector council, including:
- Fewer hires or employees per shift
- Fewer opportunities for advancement
- Cuts to operating hours or business closures
- Increases in menu prices
- Store closures
Why is it the wrong time for legislation like AB 257?
Passage of AB 257 is certain to increase costs for consumers and patrons of counter service restaurants. Restaurant prices are soaring in line with inflation, as the cost of food, gas and rent climbs to the highest rate in over four decades. Nearly 70% of Californians visit a counter service restaurant each week and are already feeling squeezed by higher prices. The last thing working Californians need right now is Sacramento increasing their food costs at thousands of establishements they frequent every week.
Inflation is a regressive tax since working folks spend a higher percentage of their incomes on necessities like food, transportation and housing. And yet, this bill essentially creates an unnecessary and burdensome tax on working families’ dining choices. It hurts the mom and dad grabbing dinner for their kids on the way home from sports practice; the first responder picking up a coffee and pastry for the early or late-night shift; or the student grabbing a quick bite to eat after class on their way to a parttime job.
Who is behind AB 257?
AB 257 is being pushed by California’s labor unions under unsubstantiated claims that workers in counter service restaurants experience abuse and are subject to worse working conditions than employees in other industries. The false narrative is bolstered by a common misperception that the owners of franchise brands, the franchisors, actually own and operate each of their locations from out of state. This is simply not true. Franchisees are independent small business owners who have full control within the bounds of state and local laws to run their restaurants. Similar to mom-and-pop establishments, franchisees are bedrocks of their communities. They operate on thin profit margins and work hard to provide opportunities for their employees. These local business owners cannot absorb cost increases without impacting jobs, hours and prices at their establishments.
Labor unions are trying to increase their membership by advocating for legislation to grant them unfettered power over California counter service restaurants without an honest check from voters or the legislature. Unions have struggled to organize restaurant employees on their own, so they are now turning to Sacramento to make their job easier. If counter restaurant workers want to form or join a union, they are free to do so. But passing new legislation that raises food prices for working Californians is the last thing the state needs right now.