Fuddruckers Points to Impacts of Rising Labor Costs in Emeryville as Decision to Shutter Bay Street Location

Published On October 25, 2019 | By Rob Arias | Local Business, Minimum Wage, News & Commentary

Fuddruckers abruptly closed their Bay Street Emeryville location last Sunday, October 13. The Burger establishment was among the last first generation of food tenants at the shopping center that opened 17 years ago. In addition, Buckhorn grill closed leaving the upper level of the center with a single eating establishment – California Pizza Kitchen.

The shopping center has seen an unfortunate wave or restaurant closures in recent years. Zao Noodle (2010), Asquew (2013), Jody Maroni’s (2014), Elephant Bar (2016), Pasta Pomodora (2017), Rubio’s (2019) and now Buckhorn and Fuddruckers. None of these establishments have had replacement tenants.

Closure Row? Buckhorn, Pasta Pomodoro, Zao Noodle, Rubio’s and now Fuddruckers.

Wages, Not Rents to Blame?

The abrupt closure set off speculation that the recent failures were the result of increased rents by Bay Street’s management. Rising Commercial Rents have been a convenient scapegoat for labor activists and their political allies instead of evaluating the entire economic equation.

While Fuddruckers owner George Almeida didn’t deny that rents were high at Bay Street, he affirmed that Mall Management did their best to accommodate them. “I can tell you wholeheartedly, that they’re not institutional guys. They worked with us, but their expenses have gone up too. Additional security, janitorial, landscaping … labor has gone up for everyone.”

Almeida pointed to Emeryville’s highest-in-the-nation $16.30 minimum wage as the biggest culprit. Almeida noted that in his attempts to keep the location profitable, he was forced to raise menu prices 25%, cut staff hours by 33% (from 600 hours per week down to 400) and reduced his menu offerings by half since Emeryville instituted its “living wage” ordinance in 2015.


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”When your average employee wage exceeds your average customer expenditure … you’re in trouble. Our PPA (per person average) spending was about $13. When you have X employees making $16 plus an hour and only have 10 customers in that span … it just doesn’t add up.

Prior to Emeryville’s historic minimum wage increase, Fuddruckers employed 17 full-time workers and about 28 total employees. When they shuttered, they were down to about 10 full-time workers and 21 total employees.

Almeida reaffirmed an undeniable economic truism. You charge more for something, you’re likely going to sell less of it. “Every time we’ve raised menu prices, we saw a dip in patronage from our regulars. Unfortunately, that’s just typical consumer behavior.”

Almeida reaffirmed that those hit hardest by the price increases he was forced to pass along were those on limited incomes. “The largest percentage of customer drop has been seniors who can’t supplement their income. Their standard of living has unfortunately been lowered by these price increases.”

“… in his attempts to keep the location profitable, he was forced to raise menu prices 25%, cut staff hours by 33% and reduced his menu offerings by half …”

Other Bay Area Locations Remain Profitable

Similar to the recent closures of Smashburger and Rubio’s, it was troubling that the Emeryville location closed while others in the area remained open.

Some speculated that this was indicative of an overall decline in the Fuddruckers brand noting the recent closure of the Walnut Creek location that closed after 22 years. Almeida refuted this as well. “Walnut Creek was a very profitable location. We drew a great office crowd during the week, had ample free parking, great egress. We knew that [housing] project was coming seven years ago.”

The Bay Street location was more reliant on movie-goers and shoppers. “At our Bay Street location, there was very little foot traffic Monday through Thursday except for parts of Summer and The Holidays. A bulk of our business was Friday through Sunday.”

Bay Street Renovation to keep up with shifting business Model

Almeida noted that labor intensive nature businesses like his. “We make our own bread, cut our own fresh produce … it’s going to be hard for a food service business with that model to survive under these conditions.”

With now 100% tenant vacancy, Bay Street recently submitted a permit application to renovate the upstairs landing area. Source have indicated that Bay Street intends to make the area a more open food court area similar to the Public Market. This model is more efficient for tenants as they don’t have to employ bus boys or dishwashers and occupy a smaller footprint.

Almeida thinks higher margin businesses with minimal employees will succeed. “Perhaps a tap room that has 1-2 employees and sells $8 beers.”

Council Regretting 2015 Decision?

Councilmember Dianne Martinez, who was among the five councilmembers that passed the experimental ordinance in 2015, recently supported amending the ordinance citing business failure and job loss (an amendment that would not have applied to Fuddruckers). “What we’re contemplating tonight could be the difference between workers getting a raise, and losing their jobs,” she stated at the May 21st council meeting. The amendment was approved, but ultimately overturned by labor groups through a referendum petition.

As Mayor in 2016, Martinez referred to the ordinance as  a “leap of faith” in this Economist article that predicted Emeryville may be the first city to regret passing it.

Restaurant Owners Calling on Local Governments to Help Offset Impacts

Frustrated restaurant owners are more frequently calling on our leaders to take action to help preserve their establishments that heavily contribute to neighborhood vibrancy and character. SF Mission District favorite Dosa proprietor Anjan Mitra cited a litany of businesses pressures for their recent closure including high residential rents for their employees, tech-driven delivery services, inadequate public transportation and SF’s many labor mandates.

Mitra called on the City, State and Federal government to take on a bigger role in helping provide essential services for food service employees like healthcare, paid parental leave and sick leave instead of passing on the burden exclusively to businesses. “San Francisco cannot sustain neighborhood restaurants at affordable prices and still expect the restaurants to pay for everything our employees need,” Mitra concluded. San Francisco’s minimum wage is nearly a dollar less than Emeryville’s at $15.59.

Supporting Higher Wages with your Wallet

Almeida opened his first Fuddruckers franchise along with his wife in 1987. They owned ten locations at one point. “We’ve employed 100’s people and many have gone on to careers as firefighters, police … we really care about the people that have passed through our doors.”

Almeida reaffirmed his desire to pay his employees as much as possible, but that ultimately the burden of higher wages falls on the consumer when local governments mandate increases that don’t necessarily come without the benefit of higher productivity by the employee. “When it comes to paying the price to support higher wages, many people will support it with their voice but not necessarily their pocket books. When it comes to people on fixed incomes, they simply cannot economically support it.”

About The Author

is a third generation Californian and East Bay native who moved to Emeryville in 2003. A new parent in the community, he can often be seen walking his French Bulldog rescue "Fiona" around his Park Avenue District neighborhood, traversing the greenway on his bike or enjoying his favorite Emeryville small businesses. Rob's "day job" is as a creative professional.

27 Responses to Fuddruckers Points to Impacts of Rising Labor Costs in Emeryville as Decision to Shutter Bay Street Location

  1. Anonymous says:

    I think a more telling graphic other than your closure map would be the number of jobs these electeds have caused/prevented from happening. The businesses you list at the mall alone are probably a couple hundred jobs right there.

  2. Anonymous says:

    A starkly anti labor and pro Fuddrucker article. What if we have these ‘job creators’ more tax cuts and some petty cash in their wallets. Then we can force the laborers to serve cheeseburgers while begging for money?

    • poncho says:

      Facts getting in the way of your blind union worship? Did your union pay you to come here and comment?

      • Frank says:

        Unions huh?
        You mean those same unions that gave us workplace safety regulations, the 40 hour work week, fair pay for a hard days work, or child labor laws? Those unions?

      • Anonymous says:

        False. 8 hour day/40 hour week was instituted by Henry Ford without union involvement:
        https://www.history.com/.amp/this-day-in-history/ford-factory-workers-get-40-hour-week

        Child labor laws had more to do with unions not wanting adults to get undercut by children who commanded lower wages for the same job.
        https://www.history.com/.amp/topics/industrial-revolution/child-labor

      • Frank says:

        You can cherry pick all you want. But the facts are (easy enough to look up online):
        “In 1864, the eight-hour day quickly became a central demand of the Chicago labour movement. The Illinois legislature passed a law in early 1867 granting an eight-hour day but it had so many loopholes that it was largely ineffective. A citywide strike that began on 1 May 1867 shut down the city’s economy for a week before collapsing.”
        “At its convention in Chicago in 1884, the Federation of Organized Trades and Labor Unions resolved that “eight hours shall constitute a legal day’s labour from and after May 1, 1886, and that we recommend to labour organisations throughout this jurisdiction that they so direct their laws as to conform to this resolution by the time named.”
        “In the summer of 1915, amid increased labour demand for World War I, a series of strikes demanding the eight-hour day began in Bridgeport, Connecticut. They were so successful that they spread throughout the Northeast.”
        “The eight-hour day might have been realised for many working people in the US in 1937, when what became the Fair Labor Standards Act (29 U.S. Code Chapter 8) was first proposed under the New Deal. As enacted, the act applied to industries whose combined employment represented about twenty percent of the US labour force. In those industries, it set the maximum workweek at 40 hours, but provided that employees working beyond 40 hours a week would receive additional overtime bonus salaries.”

      • Anonymous says:

        “You mean those same unions that gave us workplace safety regulations, the 40 hour work week, fair pay for a hard days work, or child labor laws?“

        Nope. Those unions had an interest in the workers and negotiated with businesses to reach a viable middle ground. They’re long gone. Today, we have a union that sacrificed almost every entry level non-union workers’ job in Emeryville. Those workers just got added to a growing list of people who will never again trust a union.

        By bypassing negotiations with businesses and strong arming city councils instead, the union is able to avoid the fact that most entry level workers today won’t choose to unionize if given the opportunity. In short, the unions have to avoid the workers they supposedly represent….which tells you everything you need to know about today’s unions and particularly the SEIU.

    • A reader only of this website says:

      Would you mind pointing out the “stark anti labor” sentence(s)? Or the suggestion that Fuddruckers get a “tax cut” to stay? No one is “forced” to serve cheeseburgers in this city but we are “forced” to pay taxes and drive by empty storefronts. Probably a graphic / map with balloons where new restaurants opened would be derided as evidence of corporate exploitation.

      On the other hand, presumably it is ok if the city council enacts starkly anti Fuddrucker policies that unfairly hurt senior residents on limited incomes? It’s ok to enact a socialist agenda that forces business to cut employee hours, raise prices so customers stop visiting forcing entrepreneurs to ultimately close their places of employment? Extra points for hypocrisy.

      Even Ally, Christian, Dianne, John and Scott can’t afford to eat out in Emeryville. Time for new representatives with real world experience less beholden to the unions.

      • MGK says:

        “starkly anti Fuddrucker policies” holy shit lol this is the funniest sequence of words ever written

  3. Frank says:

    What a glaring example of poor journalism. Focusing solely on the higher minimum wage in Emeryville distracts from the complexity of the issues of running a successful business in this area; It’s simply a cheap shot to blame the failure of this restaurant on the cost of labor alone.

    Just to name two of them:

    First, as a small business owner, I can testify to the fact that the high cost of housing is a serious impediment to finding reliable and committed employees. Even at what I considered to be a fairly generous pay scale of $25.00/hr. (for positions in my field of work) it was hard for people to find a decent living situation within an easy commute range to Emeryville. The fact is, that it would take double that amount of income for someone to find their own apartment that didn’t eat up most of their pay. As a result, employees are less likely to stick around for very long since they are always feeling the unease of being financially stressed and are always trying to find other job opportunities that might relieve that.

    Second, has anyone even considered what a terrible dining experience Market Hall is? I recently went there to meet someone for dinner at Hot Italian, and since we always only go there to eat we thought maybe we should try something else. We strolled around Market Hall and both of us found the cold and cacophonous “atmosphere” extremely uninviting and we wound up back at Hot Italian for some tasty pizza and a salad.

    I wonder if the folks at Fudruckers ever considered that what they were offering the public was simply not to the taste of Emeryville residents or visitors? That maybe people were not willing to pay more because that didn’t feel that given the big picture of the quality of the meal and the dining experience it was just not a good value?

    • Emeryville minimum wage regulations are not about fair pay for a hard days work says:

      “Focusing solely on the higher minimum wage in Emeryville” would be a legitimate comment if there wasn’t a graphic with 50 skull and crossbones.

      LOL – perhaps only restaurants with high quality (expensive) hamburger meat should be allowed in Emeryville? Oooops – none of the residents or workers would be able to afford to eat there however. Burger King, Subway, etc. should be closed immediately!

      A “fair and generous” wage of $25 / hour is apparently not enough. Stop exploiting your workers Frank. Take responsibility and raise their wages to $50 / hr tomorrow. My fingers are crossed.

      The housing shortage in the bay area has been proven to be caused by city councils imposing ridiculous restrictions on developers. Look at all the empty storefronts on the ground floor of apartment buildings in Emeryville. Look at the scarcity of parking spots available in these apartment complexes forcing Uber and delivery vehicles to park in the street causing traffic jams. Emeryville needs CPR now. Vote the socialists out!

      Workplace safety has been brought to us by OSHA and by employers who understand a trained employee on the job instead of at the hospital is more profitable. I have had hundreds of union employees over the past 40 years and I never told one to cut a corner yet I have seen many of them cut safety corners despite extensive efforts to train them properly. Thank god the 40 hour rule has allowed me to lay many of them off before they hurt themselves or others.

      • Frank says:

        Hmm. Sorry to confuse you with some facts but, according to the Economic Policy Institute:
        In two studies of OSHA and unions in the manufacturing and construction industries (1991a and 1991b), Weil found unions greatly improve OSHA enforcement. In the manufacturing industry, for example, the probability that OSHA inspections would be initiated by worker complaints was as much as 45% higher in unionized workplaces than in nonunion ones.

        Unionized establishments were also as much as 15% more likely to be the focus of programmed or targeted inspections in the manufacturing industry.
        In addition, Weil found that in unionized settings workers were much more likely to exercise their “walkaround” rights (accompanying an OSHA inspector to point out potential violations), inspections lasted longer, and penalties for noncompliance were greater. In the construction industry, Weil estimated that unions raise the probability of OSHA inspections by 10%.

        In addition to the findings above, Weil notes that the union differential could be even larger if OSHA’s resources were not so limited. He claims, “Implementation of OSHA seems highly dependent upon the presence of a union at the workplace” (Weil 1991a). Following the trend of declining unionization, OSHA claims have dropped from their peak in 1985 of over 71,500 and are currently at close to 37,500 (Siskind 2002; OSHA 2003).

      • Anonymous says:

        Are we still talking about a burger joint here Frank? To my knowledge, the (now unemployed) teens, young adults and immigrants that I saw working behind the counter were not members of the SEIU. It’s amazing how callous people are about other people’s jobs and livelihoods.

      • Improved workplace safety is not tied to union membership says:

        Hmm.

        The Occupational Safety and Health Administration was established in 1971. Fatality and injury rates have dropped markedly. Although accurate statistics were not kept at the time, it is estimated that in 1970 around 14,000 workers were killed on the job. That number fell to approximately 4,340 in 2009. At the same time, U.S. employment has almost doubled and now includes over 130 million workers at more than 7.2 million worksites. Since the passage of the OSH Act, the rate of reported serious workplace injuries and illnesses has declined from 11 per 100 workers in 1972 to 3.6 per 100 workers in 2009. OSHA safety and health standards, including those for trenching, machine guarding, asbestos, benzene, lead, and bloodborne pathogens have prevented countless work-related injuries, illnesses and deaths.

        Hmm.

        Among American workers, participation in a union fell to 10.5 percent last year, from 10.7 percent in 2017 and 2016, with all demographic groups seeing a decline in membership. The drop continues a trend that has been ongoing since the 1980s, when the share of organized labor was roughly double what it is today. The union membership rate of public-sector workers (33.9 percent) continued to be more than five times higher than that of private-sector workers (6.4 percent).

  4. MGK says:

    Hahahahaha wow. This article would be more repulsive and/or pitiful if it weren’t so deeply hilarious; I mean imagine looking at all of the issues facing the Bay Area (including, yes, the fact that it is virtually impossible for someone earning 15 an hour, let alone less, to make a living and pay rent here) and thinking “oh god, what a crisis! FUDDRUCKERS has been forced to close! Not to mention a whole litany of other utterly terrible chain restaurants!” LMAO.

    Like, here is an alternative hypothesis for why Fuddruckers had to close that isn’t big bad mean wage hikes – have you considered that Fuddruckers sucks ass, and makes mediocre burgers that no one wanted to eat? I mean Super Duper seems to somehow be able to eke out an existence here in the hellscape that is Emeryville’s soviet dystopia. I understand that the owner of the franchise needs to tell themselves a story of why they failed that isn’t “no one really wants to eat here”, but you don’t need to parrot it along w laughable “where will the poor seniors eat food now?” nonsense. Somehow I have no difficulty going out and finding food to eat in Emeryville, even with this sobering wave of mediocre restaurant closings (gosh, restaurants failing? Why that never happens!). I mean not a single one of the places on the grim skull and crossbones map of doom actually made good food, which, uh, seems like a somewhat relevant factor. (That said RIP to that Afghani place that was in pre-remodel Public Market, I miss your tender meats and surly service).

    Anyway in short; cry more bootlickers, hope they raise the minimum wage even more!

    • mizjanedough says:

      Exactly. I live nearby and would never eat at crappy chain restaurants like Fuddruckers. Market Hall is a huge missed opportunity. There’s some good vendors there but it’s like eating in a parking garage.

  5. Anonymous says:

    Just face it. Emeryville is a terrible place for small businesses and particularly those that hire entry level workers. At the top of that list is restaurants.

    The Emeryville Minimum Wage Ordinance was used as a marketing device for the SEIU’s Fight for $15. It had nothing to do with local workers and everything to do with an out of town lobbying group who came here to try to market a national agenda that’s beneficial for high end union labor and very bad for entry level workers.

    Most of the small mom and pop shops closed first and laid off their workers. The bigger labor intensive operations laid off their workers and left the area almost immediately. Now we’re moving on to the chains.

    It’s been a disaster for everyone, but it DOES NOT MATTER. No matter how many businesses close, the union reps will still show up and push the same narrative. They are the same ones who came and attacked all the small businesses owners who desperately tried to protect their employees’ jobs. The same ones who prevented an economic impact study from being done before the MWO was passed. The same ones who undermined the impact study that was done recently that showed that restaurants were getting killed. And the same ones who gathered signatures to overturn the City Council’s attempt to fix the problem.

    The unions have devastated local entry level employees, and THEY DO NOT CARE. Those employees are not unionized, they don’t pay union dues, and if they lose their jobs, all the better.

    The SEIU came here to raise the minimum wage because existing union contracts have clauses that trigger raises when the minimum wage increases. The SEIU used Emeryville entry level restaurant employees to give $100K/yr union labor a raise. Those of you who lost your jobs after you were told this was your benefit, I’m sorry to say you got played. The SEIU did not come to Emeryville to help non-union labor. The unions don’t work that way.

    And the SEIU is the worst of the bunch.

    But our City Council are cowards and political opportunists. So forget it. If you have a small business or want to open a restaurant, STAY THE HELL OUT OF EMERYVILLE. It is a terrible place to run a business.

  6. Kay Tran says:

    As unfortunate it is to see these places close, it would seem that Emeryville is projected to grow in population size once all the new building projects are built. Why not focus on creating that warm neighborhood environment with a grocery market that can then not only cater to locals / workers who commute but provide jobs to people! Do you really think that Trader Joe’s or Berkeley Bowl will be able to handle all this foot traffic? Let’s be serious. We don’t need more restaurants, we need a community!!!

    • Anonymous says:

      The planned grocery pulled out as well. Groceries have even lower margins than restaurants, and people are willing to go an extra couple miles to save 10% on a weekly $200 grocery visit. Look at what people are willing to put up with as CostCo for slightly lower prices.

      It would be insanity for a grocery to open here. The spaces will need to stay empty or be replaced with higher margin businesses that either don’t use entry level labor or have the economies of scale like chain restaurants (though those can’t seem to survive either).

  7. Anonymous says:

    Someone better hurry up and inform Super Duper!!! They have a lot of happy employees, a large space and are constantly packed!!! Must be the minimum wage though I guess, ruining lame restaurants everywhere.

    Several restaurant owners I’ve spoken with said they already paid more than the minimum (even to family), so wages are not the issue.

    It’s a tough business, for sure, and margins are slim. EE logic is “Rent goes up 70%, the greedy landlord deserves it! Employees get an extra $1/hour, for 4 hour shifts—the sky is falling!!”

    But lousy businesses with lousy owners have to blame something. Even then, most don’t blame the minimum wage. Why is that?

    • Anonymous says:

      Yeah! All those closed businesses are bluffing, exploitative capitalists! And somebody needs to tell that right-wing pundit Dianne Martinez to keep her mouth shut. First rule of being a politician is to never admit you were wrong. Never admit culpability and remember your talking points: It’s always greedy landlords, not our half baked policies! What vacancies? Move along, nothing to see here!

    • Those who cannot remember the past are condemned to repeat it says:

      Happy employees? Super burgers can be enjoyed for $2 less – only a few miles away.

      Luckily it’s a short drive past all the empty storefronts owned by taxpayers to Buckhorn, Elephant Bar, Fuddrucker, Rubio, Smashburger, etc. locations (all lousy businesses?) in non socialist cities nearby. I bet Ike’s will close soon.

      Lot’s of studies showing mandating wages leads to layoffs and less hours. Seattle, Target Stores, etc.

    • Anonymous says:

      “Employees get an extra $1/hour, for 4 hour shifts—the sky is falling!!”

      Where have you been? The MWO has raised minimum wage over $7 per hour. Add taxes and liability insurance and that’s about $10 in expense per hour. For a typical restaurant that staffs 30 employees for about 800 man hours a week, that’s an increase in expenses of about $35,000 a month…just in wages. And every business that the restaurant contracts with raised their prices as well.

      Yes, the MWO has killed the Emeryville small business community. The level of denial here is awe inspiring. Get over it. The SEIU and the City Council are responsible for the most effective and aggressive attack on labor and small business ever in our community.

      They took people’s jobs, they destroyed their businesses, and they simply don’t care.

  8. Steve Hogan says:

    No matter what you call it – A “living wage” is not a living wage if you no longer have a job. Decreeing a massive rise in the minimum wage guarantees for marginal businesses – such as restaurants and food retail – guarantees that they will disappear.

  9. Anonymous says:

    The term “living wage” is a marketing device that confuses the reality of what’s being done. It’s defines a certain lifestyle…living in an apartment on your own with full health benefits, paid child care, a few hundred dollars a month for transportation and then establishes that as the minimum, even though no entry level employees in the history of society anywhere in the world typically has those things.

    What this has done is driven young people out of the job market and is in the process of eliminating vast swaths of entry level jobs as it has done in Emeryville. With that, the small businesses and middle management jobs go away as well.

    When was the last time you saw a 16 year old working a fast food job locally? How many 16 year olds require their own apartment, $300 in transportation, $300+ in health benefits, etc.? They don’t. They living with their parents. Their living wage is technically zero. And no employer is going to pay a 16-21 year old with no experience, no job skills, and typical teenage work ethic $17 an hour.

    “Living wage” is about lowering standards to the point that the lowest person in a company gets as much as an average worker in every previous generation. Because this is unsustainable and ridiculous, employers simply eliminate almost all of the entry level jobs. No waiters, counter service only. No bus boys. No delivery drivers. No cashiers, self service only.

    First recession with this “living wage” will be catastrophic in Emeryville. It already is. In a boom time with massive gentrification underway, when we should be seeing restaurants opening left, right, and sideways, we are instead seeing business after business including long established ones closing.

    The Emeryville City Council and the Bernie Bros screwed the pooch for the workers of Emeryville. Total, unmitigated disaster.

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