On California AB 257:
"One Republican state lawmaker says that McDonald’s warned her that they may stop expanding in California or even abandon the Golden State entirely. How, exactly, is that supposed to make Californians better off?"
If this conversation actually happened, it repeats an outdated, impractical strategy.
In the late 1990s, the state of Iowa passed a set of laws that were not friendly to franchisors. Companies like McDonald's announced they would no longer build new stores in Iowa. Eventually, the state backed down and made changes to the laws that were more friendly to franchise companies.
A major reason changes were made was that McDonald's franchisees stepped forward and testified that the new laws would be bad for their businesses. Then, as today, Owner/Operators and corporate were on the same side of the issue.
But those are empty threats in 2022 as McDonald's will only open a handful of new stores a year in California. Neither the state economy nor the McDonald's system would feel the loss of new McDonald's stores.
As for "abandoning the state"? That's not really possible. The McDonald's system couldn't stand the loss of income from nearly 10% of USA stores. Shareholders would not tolerate such a sacrifice.
But a larger impact would be the breaching of 1,200 Owner/Operator franchise and lease agreements that remain in place. Some Owners would understand, but many would not.
And then there are the various lease agreements with landlords, none of whom would understand.
Long term, if AB 257 becomes law, a lot of sales will be lost because it will be very difficult to sell franchises in California. Eventually, the franchised industries would dwindle back to the small Ma and Pa operations from 100 years ago.