At least 16 fast-food restaurants across the Fresno area have closed their doors since the beginning of 2025, a trend franchise owners attribute to the state's recently enacted $20-an-hour minimum wage for the sector. The closures have left numerous storefronts vacant in communities including Fresno, Clovis, Hanford, Merced, Kerman, and Visalia.
Operators report that rising labor costs, coupled with escalating expenses for food, insurance, and utilities, have created an unsustainable business environment. "Almost 80% are expecting costs across the board to go up — energy costs, insurance costs, labor costs, food costs," Jot Condie, CEO of the California Restaurant Association, told the Fresno Bee. He added that businesses in the industry, which typically operate with a profit margin of 1% to 3% in California, have little room for error.
Consumers' reduced spending on dining out, influenced by economic concerns, has further squeezed restaurant operators. "In the industry that has roughly a 1 to 3% profit margin on average in California, there’s no room for error," Condie stated.
The $20 hourly wage for fast-food workers took effect on April 1, 2024, following Governor Gavin Newsom's signing of Assembly Bill 1228 into law. This wage mandate applies to fast-food restaurants operating as part of chains with at least 60 locations nationwide. California's general statewide minimum wage is currently $16.90 per hour. The legislation was passed by the state legislature, not through a voter referendum.
Franchise owners indicate that the increased labor expenses are directly impacting business revenue, exacerbating difficulties for many smaller operators. Among the affected chains are KFC, which closed six locations across Fresno and Clovis, including its Kerman restaurant. Carl's Jr. shut down three Central Valley restaurants, Five Guys closed locations in Merced and Hanford, Jack in the Box closed one restaurant, Popeyes Louisiana Kitchen closed a location in spring 2025, and Wendy's exited two Fresno locations.
Meanwhile, the California Fast Food Council, established to oversee the industry, has reportedly not convened for months. Despite a $1.1 million budget, the council has not held a full meeting since a subcommittee hearing in February 2025. The departure of Chair Nick Hardeman in May 2025, after his appointment to another state board, has left the council unable to legally meet due to the absence of a replacement governor appointee, even though state law requires semiannual meetings.