Marketplace - California’s fast-food workers got a big pay hike. Franchise owners say they’re struggling.

Chief economist Brian Callaci notes that while some franchise owners may face challenges due to California's minimum wage increase for fast-food workers, the overall impact on the industry is expected to be minimal

It’s almost lunchtime. At a McDonald’s restaurant south of Los Angeles’ Koreatown, owner Kerri Harper-Howie watches fries cook in hot oil and a conveyor belt carry a steady stream of wrapped sandwiches to a worker putting them in bags. 

Harper-Howie and her sister own 21 McDonald’s franchises in LA County and employ around 1,500 people. They recently increased those workers’ pay from about $16 to $20 an hour. That’s the new state-mandated minimum wage for quick-service restaurants in California that are part of a chain with more than 60 locations nationwide.

When the pay raise went into effect on April 1, many workers praised the move, while some franchise owners warned it could devastate already struggling businesses.

“We’re happy, of course, always to comply with the law and do the things we have to do, but it definitely comes with its challenges,” said Harper-Howie.

Read full article here.