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Fan-favorite pizza chain flees California as state's $20-an-hour minimum wage controversy rages
A popular pizza chain is joining other businesses in leaving California to avoid the state's high taxes and cut costs.
Blaze Pizza is relocating its headquarters from Pasadena to Atlanta which will reduce its state corporate tax rate by more than a third.
The company, which has 330 restaurants across 38 states and six countries, has claimed the relocation will spark the 'next wave of growth'.
It comes as fast food chains in California have been slashing jobs - as a way to cut costs after the minimum wage in the state was hiked to $20-an-hour.
Nearly 10,000 positions across chains from Pizza Hut to Burger King have been cut since the law came into effect on April 1, according to a report from a trade group.
A popular pizza chain is joining other businesses in leaving California to avoid the state's high taxes and cut costs
Blaze Pizza is relocating its headquarters from Pasadena to Atlanta which will reduce its state corporate tax rate by more than a third
In addition, businsses have been leaving the Golden State to avid higher taxes.
Other corporate departures from southern California in recent months include Neutrogena to New Jersey, QuickFee to Texas, Oak View Group to Colorado, and Unical Aviation to Arizona.
Blaze Pizza confirmed its 7,500 employees at restaurant level will be unaffected by the move while a small number of its 60 corporate employees are being offered 'relocation opportunities'.
'California is where this brand was born more than a decade ago, and we have tremendous heart for communities across the state where so many of our restaurants are,' its CEO Beto Guajardo said in a statement.
'Moving our corporate headquarters to Atlanta will help us drive our next wave of growth.'
The move comes as beloved chains have been shuttering restaurants across California over the minimum wage controversy- including Mexican Rubio's Coastal Grill, which filed for Chapter 11 bankruptcy and closed 48 locations in the state.
The California Business and Industrial Alliance (CABIA) slammed Governor Gavin Newsom was for pushing the law through, which has also meant businesses in the state have had to raise prices.
To highlight the impact of the law, the trade group created out an advert in Thursday's edition of USA Today with mock 'obituaries' of popular brands.
The tongue-in-cheek advert , titled 'In Memoriam: Victims of Newsom's minimum wage', highlighted the issues faced by smaller brands including Rubio's, and fast food giants including Pizza Hut, Burger King , Subway and McDonald's.
It features news clips documenting the changes made by companies in response to the wage increase.
This includes raising prices, letting go of workers to cut labor costs - and in some cases shutting down locations.
One says: 'A McDonald's franchisee who owns 18 outposts in California 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.'
Even before the law was made official earlier this year, chains including Pizza Hut and Round Table let go of more than a thousands delivery workers to brace for the financial ramifications of the change.
The law, signed by Newsom in September last year, increases fast-food workers' minimum wages to $20-an-hour at chains with more than 60 locations in the US.
That is 25 percent more than the standard minimum wage of $16-an-hour in California, which itself came into effect in January.
On a national level, Congress has not touched the minimum wage in decades - it is still $7.25-an-hour. Instead, so-called 'wage wars' play out on a state level.
'California businesses have been under total attack and total assault for years,' CABIA president and founder Tom Manzo told Fox Business .
'It's just another law that puts businesses in further jeopardy.'
He said: 'What business owners are doing is either they’re selling, they’re not expanding in California — they have expansion plans in different states — or they’re going out of business.'
Manzo claimed officials were living in a 'fantasyland' if they think drastic wage increases will actually help workers or businesses.
'You can only raise prices so much,' Manzo told the outlet. 'And you're seeing it. People are not going to pay $20 for a Big Mac. It's not going to happen.'
When the Democrat governor signed the law in 2023, Newsom said the state was getting 'one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast food workers a stronger voice and seat at the table.'
Blaze has 330 restaurants across 38 states and six countries and its CEO Beto Guajardo (pictured) claimed the relocation will spark the 'next wave of growth'
California Governor Gavin Newsom signed the fast-food bill raising the minimum wage payable by certain chains on September 28, 2023
To highlight the impact of the law, a trade group took out a fake ad in Thursday's edition of USA Today with mock 'obituaries' of popular brands
Rubio's Coastal Grill announced it would shut 48 restaurants in the state (Pictured: The grand opening of the third Rubio's location in the Pacific Beach neighborhood of San Diego, California in 1986)
Critics warned that businesses would turn to digital ordering kiosks as a way to cut down on wage costs for staff
When the Democrat governor signed the law in 2023, Newsom said the state was getting 'one step closer to fairer wages, safer and healthier working conditions, and better training by giving hardworking fast food workers a stronger voice and seat at the table.'
But Republican critics claimed the wage hike would simply mean workers are replaced with self-checkouts and 'robot cooks.'
Harsh Ghai, a Burger King franchisee with 140 restaurants on the West Coast announced in April how he planned to have digital kiosks installed in all his locations in two months.
Until the wage hike, he planned to roll them out over the next five to ten years.