State’s $20 Fast-Food Wage Law Linked to 16 Central Valley Restaurant Closures Since January

At least 16 fast-food restaurants across the Fresno area have closed since January 2025, a wave of shutdowns franchise operators are attributing to California’s $20-per-hour minimum wage law for chain restaurants.

The closures span Fresno, Clovis, Hanford, Merced, Kerman and Visalia. KFC lost six locations, Carl’s Jr. three, and Five Guys two, with additional closures at Jack in the Box, Popeyes Louisiana Kitchen and Wendy’s.

Assembly Bill 1228, signed by Governor Gavin Newsom, took effect April 1, 2024. It mandates the $20 hourly wage for fast-food chains with at least 60 locations nationwide. The California Legislature approved the measure — voters never cast ballots on it.

“When you talk to restaurant operators who have closed locations, they will always cite that,” said Jot Condie, CEO of the California Restaurant Association, calling the wage law one of the most “devastating” financial burdens on qualifying operators.

Condie told the Fresno Bee that nearly 80% of operators expect rising costs across energy, insurance, labor and food, compressing an industry averaging 1-3% profit margins in California. Higher wages come directly out of business revenue, adding to a cost structure smaller operators say they can no longer absorb.

Specific closures include KFC’s “next-gen” northwest Fresno location and five others from downtown Fresno to Clovis. Carl’s Jr. shuttered its First Street and Shaw Avenue restaurant June 27, its McKinley and Winery location in February, and its Visalia Chinowth Street site last month. Five Guys closed Merced June 26 and Hanford July 4. Jack in the Box exited Cedar and Nees. Popeyes closed First and McKinley in spring 2025. Wendy’s left downtown Fresno in late 2025 and West Shaw earlier this year.

Meanwhile, the California Fast Food Council — created to oversee the state’s fast-food industry and operating on a $1.1 million taxpayer-funded budget — has not held a full meeting since February 2025. Chair Nick Hardeman resigned in May 2025 after Newsom appointed him to another state board. Because the governor has not appointed a replacement, state officials acknowledge the council cannot legally convene, even though state law requires it to meet at least once every six months.

The Breakdown

• Assembly Bill 1228 set a $20-per-hour minimum wage for fast-food chains with 60+ locations nationwide, effective April 1, 2024
• The California Legislature approved the law; it was not a ballot measure voters decided
• Applies only to qualifying chain restaurants, not independent operators or smaller chains
• The wage is paid directly from business revenue, not subsidized by the state
• California’s restaurant industry averages 1-3% profit margins

What This Means for You

This is a state-level policy decision — the Legislature and Governor Newsom set this wage floor without putting it to voters. If you see vacant fast-food storefronts in Fresno or across the Central Valley, this law’s cost structure is the mechanism operators are citing.

The Legislature’s votes on AB 1228 and the Governor’s signature created the mandate. No upcoming ballot measure will revisit this law.

What to Watch

The California Fast Food Council operates on a $1.1 million taxpayer-funded budget. That council hasn’t met in full since February 2025 and can’t legally convene because Governor Newsom hasn’t replaced the chair who resigned in May.

Restaurant operators cite the wage law when explaining closures. But the law doesn’t operate in isolation — it compounds existing cost pressures (energy, insurance, food) in an industry with razor-thin margins.