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Jeff Press: Mandates harm advancement opportunities

Small Business Challenges Column

Posted: July 12, 2016 5:13 p.m.
Updated: July 12, 2016 5:13 p.m.
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I started in the industry 27 years ago, working for Brinker International from 1989 until 2011, serving as a multi-unit director the last 12 years.

Today, I am an Area Representative for Firehouse Subs, overseeing the landscape in southern California for 21 Firehouse Subs locations, with a goal to develop 190 additional restaurants over the next several years.

We are delighted to bring new jobs and opportunities for growth to many communities in the region.

However, the magnitude of regulatory change is unprecedented, and has a dampening effect on economic opportunities for employees and employers alike.

Most restaurants have entry-level wages in their business model because they are providing first-job opportunities.

In fact, one out of every three Americans found their first job in the restaurant industry. Small businesses, which are often developed on modest budgets and a sense of frugality born of necessity (with the owners themselves being the last to collect a paycheck), utilize entry-level positions to build from the base. This gives them a strong foundation for growth.

But with a higher minimum wage and new overtime restrictions, franchisees are worried about the number of employees they can employ. They are concerned about their ability to pay their manager positions and schedule their team members.

And they also worry about the costs they may be forced to pass on to guests, which could result in less frequency and a loss of sales ... which means less employees are needed.

This situation doesn’t just hurt restaurants – it hurts the Californians who are looking for their first job or a fresh start, and it hurts our communities.

I recently joined others in the restaurant industry in a discussion with Representative Steve Knight on important issues facing our industry. I appreciate his support of our industry and recognition of the damaging impact regulations like the overtime change would have on our businesses.

Policymakers need to take a closer look at some of the long-term consequences of dramatic changes to wage and overtime laws.

Entrepreneurs may very well second-guess whether developing and franchising is right for them as additional costs erode their investment. That means fewer advancement opportunities for Californians.

Jeff Press is an Area Representative for Firehouse Subs for southern California. He lives in Newhall.

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