California has had its share (or more) of restaurant closings in recent months (and other closings as well).
In addition to the usual things all restaurants face, the bar is pretty high for many restaurants because of California’s $20 minimum wage for fast food workers, which went into effect April 1, 2024.
If you’re curious, AB 1228 is in effect if a restaurant:
- Is a limited-service restaurant (i.e. customers order and pay before consumption; minimal or no table service).
- Is part of a chain with at least 60 locations nationwide.
- Is “primarily engaged in selling food or beverages for immediate consumption.”
While major chains can absorb a higher minimum wage in theory, they often decide to close stores based on the financials of the individual store itself. So higher labor costs require higher sales to support them.
We can start with a chain we all know…
Starbucks
As part of Starbucks’ “Back to Starbucks” plan, it’s been closing restaurants where “we’re unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance.”
That includes dozens and dozens of locations in California.
As an example, there are at least nine slated to be closed in the Bay Area and at least 24 set to be closed in the Los Angeles area.
Denny’s
In 2024, Denny’s announced it was closing about 150 of its restaurants by the end of 2025. Early in 2025, they revised that to be 180 restaurants.
Denny’s isn’t going out of its way to announce which stores are affected, but it’s safe to assume at least some of the locations are in California. After all, California has the most Denny’s locations of any state. Of the 1,300+ Denny’s in the U.S., about a quarter are in Cali.
If closures are proportional, that means 40 to 50 stores in California.
We’ll be conservative and estimate 40 for our count.
Jack in the Box
Jack in the Box announced earlier this year that as part of its “JACK on Track” plan to improve its finances, it would be closing 150 to 200 underperforming restaurants. That includes 80 to 120 before the end of 2025.
Jack in the Box is headquarterd in San Diego and of its more than 2,000 locations, over 40% are in California.
Again, using conservative math (150*.4), we get about 60 in California.
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