Carl's Jr. chewed up by California
CKE Restaurants, parent of Carl's Jr., is likely to move its headquarters from Carpinteria, near Ventura, to Texas and is undergoing a rapid expansion of restaurants in the Lone Star State. Right before the budget circus got going Wednesday, CKE CEO Andrew Puzder spoke at the California Chamber of Commerce, blocks from the Capitol dome. Like most of us, Puzder loves California and has no interest in leaving it, but he told harrowing tales about doing business in a state that has gone from an entrepreneurial heaven to a bureaucratic nightmare.
"It costs us $250,000 more to build one California restaurant than in Texas," he said. "And once it is opened, we're not allowed to run it." This explains why Carl's is opening 300 restaurants in Texas and only maintaining its presence in California. Texas has lower taxes than California, but the reason for the shift has more to do with regulation and with the attitude of the respective governments.
Puzder complained about the permitting process here, where it takes eight months to two years to open a new restaurant compared to an average of 1 1/2 months in Texas. In California, restaurants have to provide new curb cuts, new traffic lights, you name it. The company must endure so many requirements and must submit to so many inspections that it becomes excessively costly - and the bureaucrats are in charge of the project.
Once the restaurant is open, Puzder said, the store's general managers are not allowed to run the business as if they own it. That's the key to the company's customer service approach - allowing general managers to do whatever it takes to make customers happy. But California's inflexible, union-designed work rules, for instance, classify general managers as regular employees. They must be paid overtime for any work beyond an eight-hour day. They must take mandated breaks at specified times.
...
If a busload of customers comes to a store, these general managers must sit back and do nothing if they are on a break period. Most states have 40-hour workweek rules, meaning employees are paid overtime after exceeding 40 hours of work in a single week. In California it is based on the day, which limits the ability of managers to work, say, six hours one day and 10 hours the next day. Puzder complains about these industrial-era requirements that impede flexibility and harm customer service.
http://articles.ocregister.com/2011-03-18/news/29147158_1_california-restaurant-cke-restaurants-new-restaurant
/there is no regulation tag. mods, can we please get a "regulation" tag?
"It costs us $250,000 more to build one California restaurant than in Texas," he said. "And once it is opened, we're not allowed to run it." This explains why Carl's is opening 300 restaurants in Texas and only maintaining its presence in California. Texas has lower taxes than California, but the reason for the shift has more to do with regulation and with the attitude of the respective governments.
Puzder complained about the permitting process here, where it takes eight months to two years to open a new restaurant compared to an average of 1 1/2 months in Texas. In California, restaurants have to provide new curb cuts, new traffic lights, you name it. The company must endure so many requirements and must submit to so many inspections that it becomes excessively costly - and the bureaucrats are in charge of the project.
Once the restaurant is open, Puzder said, the store's general managers are not allowed to run the business as if they own it. That's the key to the company's customer service approach - allowing general managers to do whatever it takes to make customers happy. But California's inflexible, union-designed work rules, for instance, classify general managers as regular employees. They must be paid overtime for any work beyond an eight-hour day. They must take mandated breaks at specified times.
...
If a busload of customers comes to a store, these general managers must sit back and do nothing if they are on a break period. Most states have 40-hour workweek rules, meaning employees are paid overtime after exceeding 40 hours of work in a single week. In California it is based on the day, which limits the ability of managers to work, say, six hours one day and 10 hours the next day. Puzder complains about these industrial-era requirements that impede flexibility and harm customer service.
http://articles.ocregister.com/2011-03-18/news/29147158_1_california-restaurant-cke-restaurants-new-restaurant
/there is no regulation tag. mods, can we please get a "regulation" tag?