Six Shake Shack locations in California have closed as a result of the state’s $20 minimum wage bill.
“These Shacks are not projected to provide acceptable returns in the foreseeable future,” a filing with the Securities and Exchange Commission read, according to the New York Post.
Five of the locations are located in Los Angeles and one is located in Oakland. The locations are expected to close on September 25.
Numerous chains have been impacted by California’s wage hike. Rubio’s California Grill closed 48 locations at the end of May, attributing the closures to the “rising cost of doing business.”
Last month, a McDonald’s restaurant in San Francisco closed its doors after 30 years of operation.
Alex Johnson, owner of 10 Auntie Anne’s Pretzels and Cinnabon restaurants in the San Francisco Bay Area, expressed similar concerns about the law, saying, “I try to do right by my employees. I pay them as much as I can. But this law is really hitting our operations hard.”
Upon the bill’s passage last year, the National Owners Association called California’s AB 1228 “draconian.”
“The new ‘AB 1228’ legislation has been voted into law and will result in a devastating financial blow to California McDonald’s franchisees at a projected annual cost of $250,000 per McDonald’s restaurant,” the advocacy group said.
“These costs simply cannot be absorbed by the current business model.”
