'Farewell Hollywood' | Historic Arby's blames shutdown on California's minimum wage

Historic Arby's blames shutdown on California's minimum wage

After 55 years, the family-owned Arby's on Sunset Boulevard has closed its doors, attributing its shutdown to California's new $20-an-hour minimum wage law.

The iconic cowboy hat sign of the fast-food joint was captured by FOX 11’s SkyFOX camera on Tuesday, displaying the message, “Farewell Hollywood. TY for 55 great years.”

The restaurant, which first opened its doors in January 1969, was established by Marilyn Leviton, now 91, who managed the franchise at 5920 Sunset Boulevard with her family.

However, on Friday, Arby's workers arriving for their shifts were informed they were being let go. A hand-written sign placed in the window read “Permanently Closed,” and the establishment was boarded up with plywood.

“I’m awfully sorry that it came to this. I think we did a good job for 55 years,” Leviton told KTLA-TV.

Her son-in-law, Gary Husch, who served as the general manager of the Arby's location, explained that the financial strain caused by the state’s wage increase was too great to bear.

“I think it was the pandemic that did us in,” Husch told the Los Angeles Times. “With inflation, food costs have gone way up and the $20-an-hour minimum wage has been the nail in the coffin.”

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This closure is the latest in a series of restaurant shutdowns following California’s decision to boost the minimum wage for fast food workers from $16 to $20 an hour on April 1.

Earlier this month, taco chain Rubio’s Coastal Grill shuttered dozens of locations across the state and subsequently filed for Chapter 11 bankruptcy protection, citing the rising costs of doing business.

Similarly, Fosters Freeze, another fast food chain, closed one of its locations near Fresno due to the inability to afford the higher wages.

Leviton’s Arby’s had been struggling for several years, with the pandemic exacerbating their financial challenges.

“A lot of the offices around this area are empty now, and we’re just not getting the same foot traffic we did before,” Husch said.

Leviton added, “I really feel we would have closed during the pandemic [if it weren’t] for the federal loans.”

Since the new minimum wage law took effect, visits to fast food chains such as McDonald’s, Wendy’s, and Burger King have decreased, according to analytics firm Placer.ai.

To cope with the increased labor costs, chains including McDonald’s, Burger King, Wendy’s, Chipotle, and Starbucks have raised menu prices, with some items increasing by as much as eight per cent.

The law also mandates substantial 25% pay raises for managers at fast food restaurants, increasing their minimum annual salary from $66,560 to $83,200.

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