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CALIFORNIA HAS GONE EXTREME LEFT...HURTING RESTAURANT SALES

Oct 3, 2012
Article #157
Author: Mel Jones

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I was born in California, Los Angeles to be exact. I grew-up in North Hollywood. For those who don't know, North Hollywood isn't the land of milk and honey. Its a rough neighborhood today and was back in the 60's and 70's. So I'm not some silver spoon guy whose parents paid for my college.  I went into the Air Force to earn my GI bill benefits.  And believe me, earn is the right word because as I was making $320 a month, civilians doing the same job as me were making $35,000+ a year. That was good money in 1975! 

I grew up loving the diversity of the states climate to its people. It was a balanced political state back then, electing both dems and reps governors.  Then something went very wrong starting in the late 1980's. The state took a hard left turn. In 1989 there we about 120 fortune 500 companies headquartered in California.  Today I beleive there are about 50.  That's a lot of highly paid jobs leaving the state. Why?

As a restaurant broker I see the reason firsthand. The state employees, who are union, control our elected officials - the Dems. How can it be that a dem takes money from the public unions to get elected and then sits across the bargaining table to negotiate a labor deal with them?  Liberals will argue that all employees should have collective bargaining rights and they riot if these rights are hampered. But how can liberals argue on one hand that corporate corruption is stealing elections and then turn a round take union money to get elected?  What am I missing here!

Businesses are leaving the state every day and taking great jobs with them. In the past week I've heard of two employers leaving. One is Comcast call centers are leaving with 1,000 employees and going to other states. The next is Campbell Soup in Sacramento that employees 700 people. They too are moving operations to other states after 60years of making soups in the South Sacramento plant.

Why are they leaving the state?  Simple, California's unions have made it nearly impossible to get things done in the state. For instance, the liquor board or ABC now takes no less than 75 to 90 days to transfer a license and God forbid is one of many ABC forms has a little error, then you start all over again. And the state sales tax department (BOE) is on a witch-hunt.  I have one client who got a $75,000 tax bill from the state.  He owns two Subways.  California sales tax laws are so complex that no reasonable person can follow them, let alone stay up with all the changes. His bill relates to the fact that there is no sales tax for orders that are "to go."  But when Subway stuck their ovens in to bake the sandwiches, the law calls for sales tax on all orders if the food is heated regardless of whether it is to go or not. So he was forced to pay the $75,000 or face being shut down. Now you ask how can it be $75,000?  That represents $833,000 of sales of baker sandwiches that were to go orders.  He presented a report to show me that since Subway went to ovens, his total sales of bakes sandwiches were less than a million in total!  That includes in store and to go sales. He says that 70% of his sales stay in the store. So how did the state calculate this?  He doesn't know, but he's held hostage to the state's demand. 

This is why things must change and the state needs a balance of opposing views and opposing interests. Right now, we're on a train wreck led by extreme leftists policies and we need to get off that train!  Let's bring sanity back to our state!

 

Here a October 2013 article on California cities going bankrupt: http://finance.yahoo.com/news/california-cities-fiscal-trouble-conga-193600210.html

                                                                                                                                                                                                                                                      

Mel Jones is one of the premier restaurant brokers in the nation having published hundreds of articles on buying and selling a restaurant and bar business, selling thousands of restaurants in CA., WA and AZ and building one of the most copied business models in the brokerage industry.  Mel started SellingRestaurants in 2004 with the one simple concept, give the buyers the information they need to make intelligent buying decisions without being pestered by a broker or hiding information, prepare the business for market by researching key details that make or break deals and educate the buyer on the buying process to create an intelligent buyer.  Prior to SellingRestaurants, Mel was a Chief Financial Officer for Universal Music Group, the largest music company in the world.  There he participated in more than $11.5 billion of merger and acquisition transactions.  He also work for top companies such as Nestle Foods, USA. He hold a Bachelors in Business Administration Finance as well as attened Law School at Gonzaga University.  Give Mel a call at 480.274.7000 or e-mail him at [email protected] if you have any questions. 


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