California's $20 minimum wage for fast food sparks price hikes and fears of customer shifts

California recently raised minimum wage for fast-food workers to $20, causing franchises to raise prices up to 10-11% to offset costs.

Franchise owners fear price hikes could drive customers to casual dining chains like Chili's and Applebee's which aren't subject to new minimum wage.

Fast food and casual dining restaurants typically attract different diners and occasions, but owners worry narrowing price gap could shift some fast food customers.

Analysts predict other low-wage employers like full-service restaurants and retailers may also increase pay to stay competitive with fast food chains.

It's uncertain exactly how diners' habits will change in response to fast food price increases - some may buy more groceries or choose value deals.