Running a restaurant in California is like swimming upstream sporting stockings and heavy weights. We prepare below most drag.
In California, the regulatory load isn’t simply heavy, it’s layered like a lasagna. Every regulation has one other regulation.
We’re money companies; we rely the drawer day-after-day. We rent plenty of individuals. We deal with perishable items. We function round warmth, fuel, electrical energy, refrigeration, hoods, plumbing, and mechanical methods.
People eating open air alongside Main Street in Huntington Beach, California. MediaNews Group by way of Getty Images
Every time California regulates this stuff, they change into costlier. When prices rise, costs rise; and when costs go up, gross sales tax income goes up for the state. That a part of the machine works completely.
The half that doesn’t work is the human half – the small operator, the family-run spot, the chef-owner, the child making an attempt to open her first place, the unbiased contractor.
When you will have a everlasting supermajority of legislators, they agree on every part early, pat one another on the again, after which understand they nonetheless want to do one thing to justify their jobs. Well, what is there left for them to do? They move extra legal guidelines.
Chef Andrew Gruel is a Huntington Beach metropolis council member. gruelforhb/Instagram
Those legal guidelines create new issues, which then require new legal guidelines to “fix” the issues these legal guidelines created.
Then, once they run out of legal guidelines, they create businesses, stuffed with unelected bureaucrats to create extra issues, which they will then attempt to resolve with new legal guidelines.
The cycle continues, and restaurants which might be labor-heavy, margin-thin, and compliance-exposed change into the simplest locations to implement and extract.
Gruel talking right into a microphone in entrance of a crowd with American flags. gruelforhb/Instagram
If I had to boil down the most important “drag weights” California makes restaurants swim with, listed below are ten operators really feel instantly:
- PAGA (Private Attorneys General Act — Labor Code §2698 et seq.)
This is the nuclear choice: one technical violation can flip into statewide-style litigation threat, penalties stacked per worker per pay interval, and years of authorized expense. Almost each enterprise in California has handled fictitious labor lawsuits below PAGA — a rip-off that is inspired by the state. - AB 1228 (Fast Food minimal wage + Fast Food Council)
A particular carve-out wage ground ($20/hour beginning April 1, 2024) and a standards-setting council layered on high. Even for operators not coated, it units a pricing/labor expectation that bleeds into the entire market. - Statewide minimal wage ratchet
The statewide minimal wage is $16.90/hour efficient January 1, 2026—and plenty of cities stack increased native minimal wages on high of that. Keep in thoughts this is applicable to tipped staff, and companies pay full payroll taxes on wage and ideas. - SB 478 (the “Hidden Fees / Honest Pricing” legislation) + amendments
Effective July 1, 2024, California’s “all-in pricing” guidelines modified how restaurants disclose necessary charges/fees on menus and promoting. That’s extra compliance threat, extra signage guidelines, extra “gotcha” publicity — particularly for multi-location operators. - SB 1383 (Organics / composting mandate + edible meals restoration)
Restaurants are straight impacted by necessary organics assortment guidelines and associated compliance expectations that adjust by jurisdiction and hauler — extra bins, extra hauling prices, extra back-of-house labor, extra inspections. - SB 54 (Plastic Pollution Prevention & Packaging Producer Responsibility Act)
Even when obligations land on “producers,” restaurants dwell downstream of packaging guidelines — availability, value hikes, accepted supplies, foam restrictions — particularly for takeout-heavy ideas. - SB 68 (allergen labeling guidelines for chains)
This is a part of the rising menu/label compliance class — once more, extra publicity within the locations prospects contact day-after-day: menus, boards, ordering flows. - AB 578 (supply app necessities / refunds / transparency guidelines)
Restaurants already get squeezed by supply economics; add regulatory mandates and also you get extra administrative burden and dispute friction. - SB 1126 / CalSavers enlargement (retirement entry mandate)
As of January 1, 2026, the Treasurer’s workplace states all CA employers with a number of staff should present entry to a professional retirement program or certify exemption — one more compliance program with penalties for noncompliance.
Each considered one of these laws adjustments at an everyday cadence. You may be making an attempt to do the suitable factor and nonetheless get clipped as a result of the principles are stacked, documentation expectations are unrealistic, and penalties don’t scale to intent, otherwise you merely didn’t know the rule had modified.
California is nonetheless “California” to the skin world: sunshine, browsing, mountaineering, the dream. But for the individuals really opening restaurants right here, it’s more and more the antithesis of the American dream. It’s a compliance, paperwork, and litigation state.
The objective isn’t to develop in California anymore. It’s to arrange store right here, survive the drag, show the idea and scale exterior of California — rising jobs elsewhere.
And earlier than anybody says, “So you want no rules?” no. Restaurants don’t want fewer guidelines. They want cheap guidelines, enforced fairly.
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Right now, California isn’t simply making restaurants swim upstream. It’s promoting the drag as a advantage and questioning why so many individuals select to compete elsewhere.
Chef Andrew Gruel is a chef, tv host, and member of the Huntington Beach City Council.
