A businessman who owns 140 Burger King franchises in California will slash workers’ hours and expedite the rollout of self-service kiosks to cut down on labor costs in response to the state’s new $20 minimum wage.
Harshraj Ghai, who owns 180 fast-food restaurants throughout the Golden State, including Burger King, Taco Bell and Popeyes, told Business Insider last week: “We can’t move fast enough on this [rollout].”
“We have kiosks in probably about 25% of our restaurants today,” he said. “However, the other 75% are going to have kiosks in the next probably 30 to 60 days.”
“We are installing kiosks in every single restaurant,” Ghai said.
Several fast food chains have hiked menu prices since the new law increasing pay for fast-food workers went into effect April 1.
Ghai, who raised menu prices between 8% and 10% in the last year, said he plans to cut down on worker hours, eliminate overtime, pause plans to expand his restaurant empire and add more digital kiosks.
“I can’t take more price than that,” Ghai said of the option of raising menu prices.
“Anything more than that is going to result in [a] significant impact to our traffic.”
Before the new minimum wage law was discussed, Ghai had planned to gradually roll out the kiosks to all of his restaurants in a process that would have taken between five and 10 years.
“But now we are just going ahead and installing the kiosks in every single restaurant in response to the legislation to be able to balance some of these labor costs that are hitting us,” Ghai said.
When crunching the numbers, Ghai said it “makes more sense for us to spend the capital expenditure on the technology,” which he obtained at a cheaper price since he’s buying it in bulk.
Earlier this week, Lynsi Snyder, the billionaire president of In-N-Out, said she went “toe-to-toe” with company executives to keep costs low in the face of sky-high inflation and the $20-an-hour minimum wage hike in California.
Scott Rodrick, a McDonald’s franchisee who owns 18 outposts in California, said he is considering reducing store hours, hiking menu prices and delaying renovations to offset the impact of the state’s $20 hourly minimum wage for fast-food workers.
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