IFA Announces California FAST Act Officially Postponed Until Voters Have a Say

California Secretary of State confirms measure is qualified for 2024 ballot after one million Californians spoke out against the law; Effort spearheaded by IFA-led coalition

WASHINGTON – The International Franchise Association (IFA) today announced that California’s AB 257, or the FAST Act, has been officially postponed until the November 2024 election, giving California voters the opportunity to weigh in on the law before it goes into effect. The referendum effort to qualify the measure for the ballot was led by the Save Local Restaurants coalition, co-chaired by IFA, the National Restaurant Association, and the U.S. Chamber of Commerce.

“The FAST Act was a solution in search of a problem that didn’t exist,” said IFA President and CEO Matt Haller. “Fortunately, now more than one million Californians have spoken out to prevent this misguided policy from driving food prices higher and destroying local businesses and the jobs they create.”

The Save Local Restaurants coalition said, “California voters have made clear that they want a say on whether they must shoulder the burden of higher prices and job losses caused by the FAST Act. This legislation singles out the quick service restaurant industry by establishing an unelected council to control labor policy, which would cause a sharp increase in food costs and push many Californians, particularly in disenfranchised communities, to the breaking point. During the highest inflation in more than four decades, consumers want to know that the restaurant meals they need in their busy lives will continue to be affordable, and that the jobs their communities rely on will still be there. Before they lose the brands that they love, voters will get the chance to have their say.”  

AB 257, or the FAST Act, would establish an unelected council of bureaucrats to control labor policy in quick-service restaurants, which seven in ten Californians visit each week. Estimates show that prices at impacted restaurants could increase between 20-22%, according to the University of California Riverside, School of Business Center for Economic Forecasting and Development, during a time of record-high inflation. In fact, less than one-third of Californians supported the legislation. California’s own Department of Finance opposed the bill, citing “significant, ongoing costs.”

Franchised businesses would be some of the most significantly impacted by AB 257. According to Oxford Economics, franchises on average pay up to 3.4 percent higher wages and offer more generous benefits than their independent counterparts. In addition, they expand business ownership opportunities to women, people of color, and veterans at much higher rates. In fact, around 26% of franchises are owned by people of color, compared with 17% of independent businesses generally. Nearly one-third of franchise owners say they wouldn’t own a business without franchising.

Since the bill was signed into law on Sept. 5, 2022, more than one million California voters have used their right to referendum to speak out against it taking effect, enough to qualify the measure for the November 2024 ballot and giving California voters the opportunity to weigh in before bearing its burden. On Jan. 25, the California Secretary of State confirmed there are enough valid signatures to qualify the measure for the ballot, officially postponing the law until voters have a say.

The referendum effort was led by the Save Local Restaurants coalition, established to protect consumers, local restaurant owners, and workers from the damaging impacts of the FAST Act. The coalition is made up of California small business owners, restaurateurs, franchisees, employees, consumers, and community-based organizations.

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About The International Franchise Association:

Celebrating over 60 years of excellence, education, and advocacy, the International Franchise Association (IFA) is the world’s oldest and largest organization representing franchising worldwide. IFA works through its government relations and public policy, media relations, and educational programs to protect, enhance and promote franchising and the approximately 775,000 franchise establishments that support nearly 8.2 million direct jobs, $787.7 billion of economic output for the U.S. economy, and almost 3 percent of the Gross Domestic Product (GDP). IFA members include franchise companies in over 300 different business format categories, individual franchisees, and companies that support the industry in marketing, law, technology, and business development.

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