Another popular restaurant chain is closing its doors in California

Matt Howry, CC BY 2.0 https://creativecommons.org/licenses/by/2.0, via Wikimedia Commons

As California continues to push its anti-business laws, more and more companies are fleeing the Golden State.

Not only does this affect the state as a whole, but it also affects the people who live there.

And now another popular restaurant chain is closing its doors in California.

Rubio’s Coastal Grill closes nearly 50 stores in California

A popular California restaurant chain called Rubio’s Coastal Grill is closing 48 underperforming stores in the state.

According to the company, the changes are being made due to the “rising cost of doing business in the state.”  

Approximately 13 stores have closed in the San Diego area, 24 have closed in the Los Angeles area, and 11 have closed in northern California.

Rubio’s claims that it will continue to keep 86 restaurants open in California, Arizona, and Nevada. 

Cato Institute policy analyst Marc Joffe told FOX Business that the decision “is further evidence that fast casual restaurants like Rubio’s are struggling in California’s high-cost business environment.”

A spokesperson for Rubio’s, which is headquartered in California, said the “decision to close a store is never an easy one,” but this was a “necessary step” as part of a long-term success strategy.

When new minimum wage legislation went into effect on April 1 in California, it increased the hourly wage for fast food workers from $16 to $20.

The new hourly wage is equivalent to an annual salary of $41,600.

Once the new minimum wage took hold, several restaurants in California slashed jobs, raised menu prices, or closed locations to try and get ahead of the increased costs.

AB1228 was officially signed into law by Governor Gavin Newsom in September.

He stated that California is “one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast-food workers a stronger voice and seat at the table.”

However, Joffe says the state’s definition of what a fast-food restaurant is “captures much more than the McDonalds, Wendy’s, and Burger Kings of the world.”

The new wages cost companies more than just an hourly rate

Joffe added that it’s important to note that the actual cost of hiring a “fast food minimum wage employee” is more than $20 per hour since the employer also has to pay federal Social Security and Medicare taxes, state Unemployment Insurance, and Employment Training taxes.

“Unemployment Insurance taxes in California are being raised each year to pay off a loan the state took from the federal government to support its depleted unemployment insurance trust fund,” he said.

While most states paid the federal loans back, he said that “California failed to do so despite its large surplus back in 2022.”

A pizza chain called Mod Pizza closed some of its California locations just before the new minimum wage law took hold.

Another fast-food chain called Fosters Freeze followed suit by closing its location in Lemoore, California, in April.

Meanwhile, bigger names like Burger King, Pizza Hut, Domino’s, Jack in the Box, and Chick-fil-A have all raised menu prices as far back as September.

Patriot Political will keep you up-to-date on any developments to this ongoing story.