The owner of four Fatburger franchises in Los Angeles hiked menu prices, trimmed workers’ hours and scrapped paid time off to offset an impending California law that raises the state’s minimum wage for fast food workers to $20 per hour.
Marcus Walberg, who owns the popular outposts, said he was forced to take the drastic action because the new law is expected to spike payroll by 30%.
“I feel that there will be a lot of pain to workers as franchise owners are forced to take drastic measures,” he told Business Insider.
Walberg said he will jack up prices as much as 10% at his four restaurants when the law goes into effect April 1. He had implemented 8% menu-price increase just last year.
One of his current locations in Los Angeles sells the Original Fatburger — with a single beef patty and “the works,” which includes lettuce, tomato, onion, pickles and relish — for $7.75.
“It’s a scary thing because customers are already complaining that prices are too high,” Walberg said, per Insider.
Fatburger’s fast-food rival McDonald’s has also raised prices by 20% over the past two years, with analysts expecting the Golden Arches to lift the cost of its signature Big Mac combo to as much as $15 in California following the minimum wage bump.
Walberg is also saving money by trimming employees’ hours, he told Insider.
“We’re not hiring new people to fill jobs,” he said. “We’re being very tight on schedules.”
As another part of his cost-cutting initiative, Walberg said that he eliminated the paid-time-off programs at his Fatburger franchises “to prepare for the increase in wages in 2024,” according to Insider.
He had only first started offering PTO to his workforce three years ago, when staffers were awarded up to 72 hours a year of paid vacation time.
“We just can’t afford to do that anymore,” he said, calling it “a real shame.”
Walberg did not immediately respond to The Post’s request for comment on LinkedIn.
Meanwhile, multiple Pizza Hut franchises in California have said they’re planning to lay off delivery drivers as the restaurant chain braces for the minimum wage increases set to take effect in three short months.
Pizza Hut locations in Los Angeles, Orange, San Bernardino, Riverside and Ventura counties will reportedly be affected.
Many of the franchises expect to rely on third-party delivery apps like Uber Eats, GrubHub and DoorDash come springtime.