Bloomberg recently broke a story about a bizarre exemption from California’s new fast-food franchise regulations—which include a $20 minimum wage and oversight of working conditions from a politically appointed council—for those franchises that “produce and sell bread as a standalone item.” The exemption first drew media attention last fall when it was signed into law by Governor Gavin Newsom. When a reporter asked Newsom about the strange carve-out, Newsom responded, “That is how the sausage is made,” with no further explanation.
Newsom now regrets his “sausage” comment from last September, because Bloomberg was told that the exemption is not just your generic sausage but was included to satisfy none other than Newsom. Why? Because a key beneficiary of the exemption was Greg Flynn, the owner of 24 Panera Bread franchises in the state. Flynn and Newsom attended the same high school, they had a business transaction about 10 years ago, and Flynn has contributed over $160,000 to Newsom’s campaigns.
Bloomberg’s story went viral, including articles in the New York Times and the Washington Post. After the story broke, Newsom responded a few days later that the appearance of “pay for play” for Flynn was “absurd,” but he again provided no explanation for how the exemption came to be.
State lawyers are now claiming that Panera is in fact not exempt, even though they produce bread on site and sell it as a standalone item. Why? Because the lawyers are now saying the exemption requires that the bread dough must be made from scratch on the premises. Panera bakes the bread on site, but the dough is........