Quick Facts

• Quick serve (“fast food”) restaurant franchises are a proven pathway to business ownership for thousands of Californians, including a higher proportion of women and diverse owners than non-franchised businesses.
• These owners are independent and legally separate businesses that control the operation of their restaurant, but benefit from being affiliated with a national brand.
• There is no evidence that there is a higher rate of violations of California’s labor laws at these restaurants.
• AB 257 would strip these owners of their independence by making their national brand legally responsible for how the owner manages their employees. The bill would fundamentally change the contractual terms between independent franchisees and the national brand.
• AB 257 would unfairly target these owners with new rules regarding wages, hours and working conditions that only apply because of their affiliation with national brands. These owners would be placed at a competitive disadvantage, compared to restaurants that would not have to comply simply because they are not affiliated with national brands.     
• AB 257 would hand over broad powers to a new, unelected government council to write new rules that apply only to the fast food industry. This council would be empowered to overrule existing state agencies that enforce labor laws. Local councils also could be established in every large city.
• AB 257 would expose independent owners to lawsuits and require California courts to presume that they have discriminated or retaliated against their employees.

AB 257 creates new, unnecessary and unequal burdens on small business owners simply because they are affiliated with a national brand.