Restaurant industry eyes have been fixed on the impact of the minimum wage law for fast-food workers in California. Data is bringing a fuller story more into focus.

While QSRs did see a spike in closures after the law was signed – 71 percent in California compared to 25 percent nationally – that has leveled off where closures are at the same pace as nationally/comparable states and more related to economic factors than the law, according to “Assessing the Impact of California’s QSR Minimum Wage Law: What the Data Reveals,” an in-depth analysis from global location intelligence provide dataplor.

“We were interested in this topic because we’d heard anecdotal evidence about the new minimum wage law leading to increases in restaurant closures,” Geoff Michener, CEO and founder of dataplor, told Modern Restaurant Management (MRM) magazine. “With our ability to drill down into location data for different types of businesses across the globe, we wanted to see how the data compared to the public perceptions of closures. Our findings after studying restaurant closure data in California and comparable states speak to the importance of considering national macroeconomic factors—and not just local-level policy impacts—when making business plans.”

When the dataplor team initially looked at the dining points of Interest (POIs) closure rates for California, they saw a strong spike in April 2024 (up 80 percent between March and April, compared to the year prior when they were down by 80 percent) and assumed it would be clearly correlated to the new law going into effect that month. However, when they then reviewed closure data for states of a similar economic size (for example, Florida and New York, both of which had a minimum wage law increase on Jan. 1, 2024), they were surprised to see they mirrored this spike, suggesting that broader national economic conditions played a significant role in driving these closures.


Used properly, data can be like a superpower for business owners, helping them make more informed and strategic decisions.

“While understanding the local markets—and the differences among them—is important for any franchise operator, our findings show that it’s also essential to keep tabs on the national macroeconomic environment and to prepare for how it may impact stores across regions,” Michener said. “Based on our findings, the most successful restaurant operators will likely be those who keep an eye on both national and local trends when making business decisions—the wage law’s biggest impact was before it was enacted, and seemed a difficult challenge, but ultimately the macroeconomic environment had the biggest impact on California’s market’s health.”

Michener said while data shows that macroeconomic factors have an important impact on restaurant closure rates, it can be difficult to predict where the trend is headed.

“Potential changes like lower federal interest rates or policy shifts resulting from the upcoming election might lead to significant swings in closure rates, but are challenging to forecast,” he said. “But what our data does show is that, especially at the state level, closure rates can fluctuate pretty strongly within a given year, which is why it’s important to make business decisions with the bigger picture in mind.”

Moving forward, it will be crucial for restaurant operators to pay attention to key data indicators in order to be more efficient and profitable, Michener noted.

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Used properly, data can be like a superpower for business owners, helping them make more informed and strategic decisions. It’s important to cultivate both highly accurate data and a good variety of data types, in order to get the broadest picture possible. For instance, in addition to location data (which can help you get a sense of where your competitors are, or what complementary businesses are in a given area), it can also be helpful to gather consumer sentiment information, overall economic performance data, and demographic trends, all of which can help you make good business decisions.”