California McDonald's Franchisees Raise Prices, Cut Costs to Absorb Minimum Wage Hike

Scott Rodrick, a McDonald's franchisee in Northern California, has raised menu prices 5-7% due to the new $20 minimum wage law. However, he vows not to raise Happy Meal prices to $20.

Rodrick may cut worker hours and expand delivery operations to offset higher labor costs. He's also postponing dining room renovations and new equipment purchases.

McDonald's CEO acknowledges the chain is becoming less affordable for low-income consumers due to inflation.

Some McDonald's in wealthy areas already charge around $18 for a Big Mac meal.

Another franchisee, Alex Johnson, says the higher minimum wage law will cost him $470,000 per year. He's raising prices 5-15%, stopping growth plans, and laying off office staff.