Soup-and-sandwich chain Panera Bread is reportedly benefitting from an obscure carveout in California’s new minimum wage law, allowing it to bypass the wage hike imposed on other fast food restaurants. The new law, implemented by California Governor Gavin Newsom last year, primarily benefits billionaire restaurant franchise owner Greg Flynn—who also happens to be a major financial supporter of Newsom’s political campaigns.
The Fast Food Accountability and Standards Recovery (FAST) Act, signed into effect by Newsom in September, raises the mandatory minimum wage for fast food workers from $16 to $20 per hour beginning April 1st. However, the governor also pushed to include an unusual exception within the legislation: any restaurants that “bake bread and sell it as a standalone item” will not be required to increase workers’ pay. Among those who benefit most from this exemption is Greg Flynn, CEO of Flynn Restaurant Group, which owns two dozen Panera Bread locations in California. His company also owns thousands of other brands, including Applebee’s, Pizza Hut, Taco Bell, and Wendy’s, making him the largest franchisee in the United States with a net worth of $1.1 billion.
Flynn is also a longtime associate of Governor Newsom. According to Bloomberg, the two attended the same high school and later did business together before Newsom’s transition into politics. Flynn donated $8,400 to Newsom’s 2018 gubernatorial campaign, followed by a combined $164,800 between his 2021 anti-recall effort and his reelection campaign in 2022.
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Despite insisting that he played no role in the bread-making exemption to the FAST Act, Flynn reportedly lobbied against a similar bill behind closed doors in 2022, warning that it would effectively kill the fast food industry in the state. He is also said to have asked Newsom’s aides to reconsider whether Panera Bread could really be considered fast food.
When asked about the carveout in the law last year, Newsom stated that it was “just part of the sausage-making” in politics, later referring to the bill as “the result of countless hours of negotiations with dozens of stakeholders over two years.”
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Following reports of Panera Bread’s potential to capitalize on the exemption, top Republicans in the state legislature called for an investigation into the arrangement.
“Can any franchisee get an exemption from the $20 minimum wage law or do they need to donate more than $150k to Newsom first?” Assembly Republican Leader James Gallagher wrote on X. “This crooked deal needs to be investigated.”
Connor Walcott is a staff writer for Valuetainment.com. Follow Connor on X and look for him on VT’s “The Unusual Suspects.”
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