IP Blog

Latest firm news

FAST Act Raises California Minimum Wage to $20 per Hour for National Food and Beverage Franchises

by | Apr 2, 2024 | Associate, Blog, Trademark, Uncategorized | 0 comments

Franchise operators with California locations should take note that Assembly Bill (“AB”) 1228, state legislation known as the “FAST Act,” went into effect as of April 1, 2024. The FAST Act mandates a minimum wage increase to $20 per hour for so-called “national fast food chains” with over sixty (60) locations nationwide. Importantly, the FAST Act’s definition of a “national fast food restaurant” is much broader than one might expect, with many food and/or beverage establishments potentially falling within its scope.

More specifically, the FAST Act defines a “national fast food chain” as a “set of limited-service restaurants consisting of more than 60 establishments nationally that share a common brand, or that are characterized by standardized options for décor, marketing, packaging, products, and services, and which are primarily engaged in providing food and beverages for immediate consumption on or off the premises where patrons generally order or select items and pay before consuming, with limited or no table service.”

The state of California confirmed in March that this definition goes far beyond famous American burger franchises, for example, and indicated that shops featuring “ice cream, coffee, boba tea, pretzels, or donuts” may be a “national fast food chain” within the meaning of the Act. In other words, the type of food or beverage sold by an establishment is not relevant to the law’s application.

The FAST Act also established the Fast Food Council, which has the authority to increase California’s “national fast food chain” minimum wage in the future and adopt other state minimum employment standards for fast food restaurants.