• Dunkin’ Brands Group Inc. CEO Nigel Travis criticized New York State lawmakers Thursday for “choosing to skirt the legislative process” by appointing a wage board to decide on increases to the minimum wage.
  • On Wednesday, the New York Fast Food Wage Board voted to recommend a phased-in increase of the minimum wage to $15 per hour at limited-service restaurants with more than 30 units by 2018 in New York City, and by 2021 for the rest of the state. The three-member wage panel will make its recommendation to the state labor commissioner after a 15-day comment period.
  • The wage board’s resolutions defined “fast food” restaurants as those where customers order and pay before dining, that offer limited service and are part of chain or franchise with 30 or more outlets nationally.
  • In a call with Wall Street analysts following Dunkin’ Brands’ report of earnings for the second quarter ended June 27, Travis said franchise operators were “denied the chance to fairly express their concerns so the state could make an informed decision on this topic.”
  • The wage board, appointed in May by New York Gov. Andrew M. Cuomo, “didn’t even include a representative from our industry,” Travis said.
  • “Most concerning to us was that the fast-food industry was singled out for this increase,” Travis said. “The regulation also targeted franchise businesses and it does not acknowledge that, just because our franchisees share a common brand, they themselves are small business people to whom every increase in business expenses can have an impact.”
  • “We would have been happy to have been part of working with the governor and the legislature on finding a solution to address this concern of low-wage earners, while simultaneously protecting small business, but we were not given that chance,” he said.
  • Franchisees will likely raise menu prices as a result, Travis said, but the company will work with its operators to help them improve profitability and efficiency.

For the most part Travis is saying that they are disappointed that the restaurant industry wasn’t represented during the planning/negotiation process. It’s a big jolt to the industry, but destined to happen sooner than later anyway.