Fast Food’s New Playbook

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Hourly wages for California workers have risen by an average of $2 per hour. With approximately 35 employees per restaurant, this wage increase adds around $8 million annually to labor costs.

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As a result of the rising wage pressure, fast-food restaurants like Dave’s Hot Chicken are getting creative, often overhauling their entire operations to drum up new business and reduce costs (dollar figures are estimates per location, per year).

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Not mentioned in the graphic above, fast-food chains are also raising prices. Dave’s and other restaurants, including Chipotle, Shake Shack, and McDonald’s, have lifted menu prices at California locations. Dave’s bumped prices by 9% and plans to raise them again in 2025.

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Raising prices is part of the recipe, but it is becoming increasingly clear that fast-food restaurants must get better in other areas to remain competitive.