Michaela Mendelsohn, the owner of six El Pollo Loco locations in Los Angeles and Ventura counties, knows exactly what will happen to her businesses should a new law go into effect that governs how fast-food restaurants operate in the state.
“I will be forced for my family’s sake to look at the possibility of moving out of the state in terms of business if this goes through,” said Mendelsohn, chief executive of Pollo West Corp.
AB 257, also known as the FAST Act, would, among other things, create a 10-member council that would institute new wage, scheduling and operation rules for fast-food restaurants. The bill has been passed by both chambers of the legislature, although in two different forms. Assemblymembers Luz Rivas (D-Arleta), Chris Holden, (D-Pasadena) and Wendy Carrillo (D-Echo Park) are authors of the bill, and Sen. Henry Stern (D-Calabasas) is a co-author.
The bill was reconciled by the Assembly and now goes to Gov. Gavin Newsom, to either be signed into law or vetoed by the end of the month.
The 10-member council would sunset on Jan. 1, 2029, and until that time would be able to set minimum standards on wages, working hours, and other labor conditions related to the health, safety, and welfare of fast-food workers. The council’s orders would apply to restaurants in the state that are part of a set of fast-food chains consisting of 100 or more establishments nationally that share a common brand.
Mendelsohn said she was hoping the governor is open minded about hearing what she and other opponents of the bill have to say.
“Without ending it or considerably modifying it, I think his office and the state will look back at it and realize what a mistake they made,” she said.
The Stop AB 257 campaign issued a statement on Aug. 29, after the Senate’s passage of the bill, urging Newsom to “do right by all” and veto it.
“Reckless costly legislation that hits working families during record inflation is not the way to protect anyone — consumers, workers, or small businesses,” the group said in its statement.
“Clearly, the legislature is out of touch with the financial realities across California, opting to pass this 20% food tax on to California counter-service diners.”
The 20% food tax is in reference to how much fast food is expected to increase if the bill becomes law.
Mendelsohn has been an El Pollo Loco franchisee since 1988 and was president for nine years of the Costa Mesa chain’s franchise association. She at one time owned 17 restaurants but sold many during the Great Recession. She now has six locations – near Koreatown, Van Nuys, Sunland, Agoura Hills, Oxnard and Ventura.
The small chain of restaurants has been able to strengthen itself since the recession and has been looking to add a couple of locations, but AB 257 “will absolutely put a stop to that,” Mendelsohn said.
“I really think the whole industry will grind to a halt if this goes through and reassess what all their options are,” she added.
From Mendelsohn’s perspective, there are only two ways out of the situation that the bill will create: dramatically decreasing labor hours, which does not help employees as it means fewer jobs and fewer hours to go around, “or our other choice is to go out of state,” she said.
