"Eighty percent of the workforce, these fast food places - 80 percent of people of color, two thirds...are women, the majority are breadwinners and we have the opportunity to reward that contribution, reward that sacrifice and stabilize an industry in turn. What a remarkable moment."According to Bloomberg, Newsom pushed for Panera Bread to be exempt from the new minimum wage law. Flynn, a billionaire restaurant franchisee, is a Newsom donor and was involved in business dealings with the California Governor.
In 2014, Flynn, who is the largest franchisee in the US with thousands of brands including Applebee's, Pizza Hut, Taco Bell, and Wendy's, acquired a Napa Valley resort that was managed by Newsom's hospitality firm, according to disclosure forms.
Flynn has a net worth valued at $1.1 billion, according to the Bloomberg Billionaires Index. He has donated at least $164,800 to Newsom's campaigns.
Michelle Korsmo, head of the National Restaurant Association, told an industry conference last year that "everyone's scratching their head" about the bread exemption. "You may be celebrating or you may be lamenting the bakery exemption," Korsmo was quoted as saying by Bloomberg. "But remember, all of that comes through relationships."
Flynn quietly lobbied Newsom's aides to reconsider whether Panera Bread can be considered fast food, according to Bloomberg News.
The exemption for bread sellers was inserted into the legislation after the union that was pushing for the hike in minimum wage accepted it as a concession aimed at getting the governor's support, the report stated.
Earlier this month, Chipotle executives warned that consumers in California should expect to see "significant" price hikes due to the minimum wage hike.
Jack Hartung, Chipotle's chief financial and administrative officer, told investors on an earnings call that the price hikes are necessary to keep up with increasing labor costs.
McDonald's CEO Chris Kempczinski warned in October that the Big Mac maker would also need to hike the price of its menu items in California. The chain has increased prices nationwide amid rampant inflation, including charging $18 for a Big Mac meal.
Earlier on Wednesday, Panera Bread agreed to pay $2 million to settle a class-action lawsuit that accused the chain of misleading customers about fees and menu prices for delivery orders.