A spate of Seattle restaurants say bring on the new minimum wage.
Who’s afraid of $15? Not the people bringing new franchise restaurants to Seattle, despite the International Franchise Association’s (IFA) dark warnings.
The IFA claimed that the faster implementation of the rising minimum wage required for big businesses — which must get to $15 within three years instead of seven — was discriminatory. It lost a suit against the city (and a subsequent appeal), with the judge ruling that no evidence showed that the law would cause franchises to suffer or close.
Despite the advertising resources, buying power, name recognition and other advantages a franchise structure provides, IFA spokesman Matt Haller still said recently that the accelerated minimum-wage schedule puts franchises in Seattle at “a competitive disadvantage … It’s the unfortunate reality of the mayor and city council’s decision to discriminate against family-owned franchise restaurants in their community.”
Anecdote isn’t evidence, and it’s too early for meaningful data to be available. But meanwhile, people are opening chain restaurants that are entirely new to Seattle, and they have little concern about the city’s minimum wage — they’re even celebrating it.
Reyaz Kassamali brought the first CaliBurger in Washington to the University District a month ago. He’s not only undaunted about running a franchise in Seattle, he was grateful to just get a space. It took diligent looking in the “very tight” real estate market to score the location on the Ave, he said. “You take what you can get when you find it, and we lucked out.”
With regards to $15, Kassamali said, “I think it’s a fair proposal. I think it’s been a while since the wage was adjusted to reflect cost of living … It’s something we have to work with, and figure out, and solve, and I think everyone else is trying to do the same thing at the same time. But I think being in Seattle — being at this location — the trade-off for us was fair.”
“A rising tide lifts all boats,” he said. And a month in, “Business has been booming.”
Franchisee Joe Fernandez is opening a branch of longtime Midwestern burger chain Steak ’n Shake in the former Bruno’s space on Third and Pike, a block that might fairly be called blighted. Reached by phone, he said the high visibility of a downtown location is an advantage, and that he’s already planning to open more Steak ’n Shakes in other Seattle neighborhoods.
Was $15 an impediment to choosing a Seattle location? “Absolutely not,” Fernandez said. He understands that he’ll be “ramping up faster to a higher minimum wage than other restaurants.” And he noted, “This is my first restaurant — my first business venture — so that does impact me, more so than just about anybody. But we’re going to work with the rules the way they are and do our best.”
After we talked on the phone, Fernandez emailed me: “I remembered another reason why I’m not too worried about the minimum wage discrepancy between franchise and independent restaurants. During those few years where we will be paying a higher wage, it would be logical to assume we would be attracting better employees. This will have a positive impact on our guests and help our overall employee retention and satisfaction.”
On Capitol Hill, the owner of new Ian’s Pizza, Brandon Stottler, is also unworried about $15. The company’s best-selling pie is the mac and cheese; they’ve also got a barbecue, potato, bacon and ranch version that’s “kind of like a loaded baked potato on a pizza,” Stottler said. (For a Seattle audience, he noted, this is “very recreational-cannabis friendly.”)
The chain only has four branches, so Ian’s isn’t on the accelerated timeline to $15. But Stottler and his partner own two Ian’s in the Midwest, where, he said, “We’re already paying well above the minimum wage, because we think our employees should be able to live based on the great job that they do.”
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Ironically, Ian’s Pizza is in the same Broadway space that housed Zpizza, another chain pizzeria that holds the distinction of being the only restaurant in Seattle to shut down because of the impending minimum-wage increase, according to the owner.
Habit Burger debuted last week in Kent, with plans to add 24 more locations across the state before 2022. The California chain’s burger was deemed fast food’s best by Consumer Reports. The owner of the Kent branch, AJ Jafrey — who’s also the company’s area developer — said simply, “We do not have concerns about opening in the city of Seattle with the new minimum wage, as we have always offered our employees competitive compensation.”
And Dutch Bros. Coffee — based in Grants Pass, Ore., with 250-plus locations in five states and what it calls “a pretty amazing cult following” — is also finally Seattle-bound, with 20 outlets slated for the city and surrounding markets within the next three years.
Seattle’s restaurant economy overall is booming. A Puget Sound Business Journal article last month — headlined “Apocalypse Not: $15 and the cuts that never came” — detailed some of the many nonchain openings since the law was enacted, including multiple new places from owners who vocally expected to have business suffer, like Tom Douglas and Ethan Stowell. The Washington Restaurant Association recently reported that outlying areas are raising wages to compete with Seattle’s rising minimum, rather than restaurants fleeing the city as some feared.
Nowadays, WRA President Anthony Anton offers cautious encouragement to both would-be franchisees and others. “I think go in eyes wide open,” he advises. “If you can do that, you can figure out a plan to deal with it … there’s a lot of good things going on in Seattle.”