In-N-Out Heiress Battles Rising Costs Amid Minimum Wage Hike

In California, the recent hike in the minimum wage for fast-food workers, which came into effect on April 1, is already sending shockwaves through the restaurant industry. Notably, Lynsi Snyder, the owner of In-N-Out Burger, revealed her tough stance on cost control amidst the new legislation.

Snyder, who inherited the burger empire and has steered it through various challenges over the past 14 years, emphasized her determination to keep prices reasonable for customers. She recounted her efforts in internal meetings to resist substantial price hikes, highlighting her commitment to maintaining affordability and explaining that she felt “an obligation to look out for our customer.”

The minimum wage in California increased from $16 to $20 per hour for fast-food establishments with at least 60 locations nationwide, excluding those producing their own bread. This adjustment translates to an annual salary of $41,600 for affected employees.

Governor Gavin Newsom championed the legislation, citing the need for fairer wages and improved working conditions for over 500,000 fast-food workers in the state. The law also established a Fast Food Council, tasked with overseeing further wage increases and setting standards for workplace conditions.

However, the implementation of the new wage law has prompted several restaurants to raise prices or even close down locations to offset the financial impact. Burger King, Hart House, and some In-N-Out outlets in the Los Angeles area have already adjusted their prices upwards.

Furthermore, some chains, particularly in the pizza sector, have resorted to shuttering locations preemptively to mitigate potential losses. MOD Pizza closed five stores in California, while Fosters Freeze shut down one of its locations.

The repercussions of the minimum wage hike are not limited to price adjustments. Michael Ojeda, a Pizza Hut driver, shared his experience of receiving a notice of termination from a Pizza Hut franchisee, signaling layoffs in response to the new legislation.

As California’s restaurant industry grapples with the aftermath of the minimum wage increase, stakeholders are navigating the delicate balance between labor costs and financial sustainability. In this challenging landscape, businesses like In-N-Out are compelled to adapt while striving to uphold their commitments to employees and customers alike.