Wednesday, July 2, 2014

Why Businesses Are Ditching California And Heading For Texas -- Yahoo!Finance


March 14, 2015: nothing to do with California, but Seattle restaurants shutting down due to minimum wage of $15/hour. Los Angeles Times "editorial" says it is not the minimum wage that it shutting down these restaurants; the restaurants are shutting down for other reasons. LOL.

July 7, 2014: this graph is worth a thousand words vs the original post below. From Carpe Diem, since 2007, Texas has added a million jobs; California has added 24,900 jobs.

Original Post

This is really cool. I first blogged about this almost exactly one year ago: Carl's Jr. sees a trainwreck; won't expand in California.

Right now it's one of the five top stories at Yahoo!Finance: why business is ditching California and heading for Texas. CKE is the parent company of Hardee's and Carl's Jr. CKE says it has pretty much stopped growing/expanding in California, but plans to open 300 new restaurants in Texas. Here's why:
Part of the appeal of the Lone Star state [Texas], in addition to lower taxes, says Puzder, the CEO of CKE, is that “you don’t have the very burdensome wage and hour laws that you have in California.”
Even permitting procedures become a factor in growth prospects for certain states.
Puzder gave the example that, “in Texas it takes 60-63 days to get permits. In Los Angeles it takes 280 days and in San Francisco we’re not sure how many days it takes because it has been so long since anyone could open a restaurant there.”
These factors are crucial for new businesses because the property sits idle until permitting allows construction to begin, creating losses for every day there’s a delay, according to Puzder.
Puzder's company has announced plans to open hundreds of new restaurants in Texas, thanks in large part to the state's speedy permitting process. “Our intent is to built 300 (stores) in Texas in this decade, whereas in California we’ll build very few restaurants."
Did y'all see that "statistic" regarding San Francisco? Not just CKE (Hardee's / Carl's Jr) but apparently no new restaurants are opening in San Francisco -- and thus no one knows how long it takes to get a permit.

Say what you want about Governor Perry, he's been good for business in Texas. The California icon of hamburger restaurants is In 'N Out. One is located just up the street from where we live. I expect to see more of them over the next few years. Actually, I think, except for White Castle, I've seen every national hamburger chain here in Texas, and I don't see Whataburger in California. Is White Castle still in business? [Update, later, 10:12 p.m. CDT -- a reader wrote in to tell me that there are about six (6) White Castle restaurants still in the Minneapolis area. Awesome.]

Most interesting, the 800-pound gorilla is not mentioned in this story, though it was THE story in the earlier linked Carl's Jr story. It looks like business writers have gotten the memo from their editors: don't mention ObamaCare in any of your business stories. It's too depressing. 

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