Taco Chain Closes Dozens of Locations in California after Fast Food Minimum-Wage Hike

Rubio’s Coastal Grill – a casual Mexican chain famous for its fish tacos – abruptly shut down 48 of its restaurants in California, on Friday, due to “rising costs of doing business”, which were exacerbated by a recently increased minimum wage in fast food.

Rubio’s revealed on Monday that about one-third of its 134 locations had been closed, leaving only 86 remaining in California. Most of these stores are located in Southern California.

Rubio’s spokesperson said that the closures were due to California’s rising costs of doing business. The Rubio’s spokesperson said that the closures were painful but necessary for our long-term strategic plan.

The company didn’t elaborate further on the reasons for the closures, other than saying that its locations “underperformed” and that this move was made after “a thorough review of their operations and the current economic climate.”


California’s minimum wage of $20 for fast food workers went into effect two months ago. This is a 25 percent increase from the $16 minimum wage in virtually all other sectors. The new wage was signed into law by Governor Gavin Newsom last fall. It affects over 553,000 fast food employees and chains that have at least 60 locations across the country.

Californians will vote on the issue in November, if they want to increase the minimum wage to $18 an hour. This could help offset the financial impact of the wage increase. It would at least bring the minimum wage for all of California closer to that required by fast-food workers.

Since the law went into effect on April 1, it has resulted in price increases and job losses across the state. Red Lobster filed Chapter 11 bankruptcy last month after closing dozens locations. Fast-food chains were also heavily impacted.

According to the Wall Street Journal, immediately after the new wages took effect, Chipotle’s menu prices rose by 6 to 7 % in the first of April, compared to last year at the same time across its 500 California restaurants. Chick-fil A’s prices have also increased 10.6 percent in California on average since mid-February.

McDonald’s and Domino’s are among the chains that have been negatively affected by the wage hike. Pizza Hut, Jack in the Box and Shake Shack also suffer from the increase.

National Review reported that California restaurants, primarily pizza chains, started laying off drivers before the wage increase and began outsourcing deliveries to third party apps. Some companies have considered increasing food prices, slowing down hiring, reducing employee hours and halting expansion plans, or expanding to other states.

Rubio’s filed for Chapter 11 bankruptcy on October 20, 2020, amid the Covid-19 epidemic and restructured their business. The food chain once had 200 outlets under its banner.