When Bon Vivant Market & Café owner Tricia La Belle first opened the eclectic French American-inspired restaurant in Atwater Village in the summer of 2012, she faced her challenges though they were still manageable.
Minimum wage in Los Angeles County was $8 per hour, and the prices of food, electricity, insurance and other costs were low enough to allow room for her local operation to breathe.
Thirteen years later, that margin has all but vanished. The county’s minimum wage has more than doubled to $17.81 – it’s $17.87 in the city – and fast-food workers now make $20 an hour. According to La Belle, electricity has jumped nearly 90%; insurance premiums have climbed as much as 400%; and food and liquors costs are up as much as 50%. The result: a business model on overload.
This seemingly is the new operating reality for many restaurant owners across Los Angeles—a collision of rising wages, skyrocketing overhead and mounting regulations that’s pushing even long-established restaurateurs to the brink. The industry’s troubles are showing up in the data. According to the California Employment Development Department, more than 150 restaurants in the county closed in 2024, and over 100 shut their doors in the first quarter of 2025 alone. La Belle estimates that a new restaurant shutters nearly every day in Los Angeles.
“It’s much harder for (restaurant) owners to stay in business,” said La Belle, who also serves as president of the Greater Los Angeles Hospitality Association, representing over 20,000 restaurant and hospitality operations in Los Angeles.
“Restaurants are bombarded with new regulations and laws that make it much harder for them to stay afloat.”
Among the regulations adding pressure is no tip credit in California, she added, which allows servers to earn full minimum wage plus tips – often 20-25% – pushing staffing costs beyond the industry’s traditional 30% threshold.
“We’ve had to cut labor tremendously,” said La Belle, who also owns the historic Hollywood venue Boardner’s, Bar Sinister also in Hollywood, Dave’s on Broadway in Glendale, and The Sportsman’s in Kernville.
The cost pressures – still lingering from the Covid-19 pandemic – have extended beyond payroll.
“Insurance is becoming unattainable,” she said, citing the impact of rebuild requirements due to labor and safety rules, the recent challenges with the entertainment industry and the ICE raids conducted by President Donald Trump’s administration over the summer.
Combined with escalating rents, taxes, utility hikes and Trump’s tariff policies pushing up supply prices, La Belle said restaurateurs are shrinking their menus, boosting prices and still coming up short.
“It just keeps coming at all of us,” said La Belle. “We’ve seen many farm-to-table small mom and pop companies shutter.”
Just a few miles away in Eagle Rock, L&L Hawaiian Barbecue manager Nareh Shanazarian is trying to keep her family’s single-location franchise steady amid the cost surge. Her seven-person staff now earns $20 an hour under the fast-food franchise rule, plus tips.
She has put on hold plans to open a second location; and after years of maintaining steady prices, a small increase is inevitable. “People are under the impression that when you own a franchise you have many locations,” she said. “Most people have just one restaurant. … given the current circumstances, I am going to focus on this one location.”
La Belle admits that owning multiple locations has been a savior. “They help each other out,” said La Belle. “I would not be able to manage otherwise. I don’t know how single owners do it.”
Many patrons might think owning a restaurant is a lucrative endeavor. Jot Condie, president and chief executive of the California Restaurant Association (CRA), said that’s not the case.
In fact, the average profit margin for owners is just 2.5%, making it challenging to keep the doors open under the best of circumstances, he said.
However, in today’s climate the situation is far from optimal. In the CRA’s annual survey, 84.4% of restaurant owners in the county said foot traffic is down, with 24.4% reporting a significant drop compared to last year.
In response, 36% are reducing their hours of operation, said Condie. The survey also showed 13% are closing an additional day or days and 25% are reducing menu sizes and certain high-priced items.
The top three pain points identified – runaway labor costs, rising prices on goods and the uncertain economic climate, according to Condie.
More than two-thirds of those surveyed – 67.7% – ranked the Los Angeles County economy as poor.
“Real restaurant spending in (the county) is at 2012 levels which is not enough to sustain the growing number of restaurants,” said Condie. “The city of Los Angeles alone now has 15,615 restaurants, a record high. At the same time, the population has remained relatively stable.”
Condie pointed out that there’s a growing level of pessimism among restaurateurs in the county, “who have traditionally had a more optimistic outlook compared to other urban areas in the state like San Francisco.”
As for who they blame for their plight, 72.8% said their elected officials are doing an inadequate job of addressing their concerns.
“Restaurants desperately need a tipped wage,” said La Belle. “And we need our elected officials to stop imposing new regulations that add costs to operating businesses that have not fully recovered from the pandemic … Restaurants are the cultural backbone of every community.”
California has not had a tip credit since 1975, requiring employers to pay untipped workers the same minimum wage as tipped employees — and the minimum wage has soared in recent years.
“The extraordinary minimum wage hikes for tipped servers make it more difficult for owners to manage their payrolls,” said Condie.
He noted that the shift in the minimum wage set the stage for some servers to make more than $70 an hour in total compensation – adding further pressure on employers to boost wages for their “back of the house workers like kitchen staff to make up for the income disparities between tipped and non-tipped staff.”
Trump’s One Big Beautiful Bill Act is expected to help tipped employees by exempting them from paying federal taxes on up to $25,000 in tipped income over a three-year period between 2025 and 2028. However, it does little to address the woes of employers in the county, who have faced a continual barrage of state and local regulations, said Anthony Zaller, founding partner of the Zaller Law Group in El Segundo.
“While California does not have a tip credit, tips must still be considered an employee’s wages and employers have to make payroll tax deductions accordingly,” said Zaller, who represents businesses in labor and employment matters throughout the state.
Joseph Pitruzzelli – founder and co-owner of the German-inspired limited-service restaurant Wurstküche, which features exotic grilled sausages – said he’s seen a decrease in some of the foot traffic at the restaurant’s downtown Los Angeles location due to post-pandemic office rules, the wildfires, ICE raids, protests and homeless encampments.
“Post-Covid work-from-home trends have drastically reduced the number of people coming into the downtown area,” said Pitruzzelli. “And the media coverage of the events taking place in downtown has convinced some people that downtown isn’t the place to be.
“Inflation together with the prevalence of online delivery platforms mean more people are eating at home,” he added. “These factors together with rising permitting fees, utility, food, trash and labor costs make things very hard on restaurant owners.”
He said the industry is also getting hit with “frivolous lawsuits” and increasing regulations that are time consuming for operators.
Additionally, Pitruzzelli has had problems staffing both his downtown and Venice locations.
“People are looking for low-hour, low-commitment schedules post-Covid and it’s hard to get workers to commit to a steady schedule,” he said. “Even when you find people who say they are willing to do that, many don’t show up.”
In response Pitruzzelli closed the Venice store on Mondays and Tuesdays and he’s trimmed back overtime at both locations.
“We’ve been a destination since opening 17 years ago because of the unique cuisine we offer so we’re keeping our head above water, but restaurants all around us have been closing recently,” he added.
While increasing costs and regulations are exacerbating the issues, Specialty Restaurants Corp. Chief Executive John Tallichet said all six of their restaurants are doing well.
The Long Beach-founded family-owned business began in 1958 and owns the Proud Bird at Los Angeles International Airport, the Odyssey Restaurant in Grenada Hills, Castaway in Burbank, Whiskey Red’s in Marina del Rey, Luminarias in Monterey Park and The Reef in Long Beach.
Many of the locations host large private events, which help them thrive. However, they still pay close attention to their payroll, with Tallichet noting that the high minimum wage for tipped workers in Los Angeles means they employ fewer servers than they do at their Florida restaurants, where there is a tip credit.
“All of our L.A. restaurants are high end, and we focus on great service,” said Tallichet. “We’ve been lucky to be able to employ enough people to ensure our high standards are met.”
However, he said the family closed their restaurant, the 94th Aero Squadron in Van Nuys.
Located in the airport, the restaurant featured a World War I-themed atmosphere, and it was one of their smaller locations. Due to pandemic hardships and a non-renewable lease, the family decided not to re-open. “It was a tough choice,” Tallichet said.
And while the other restaurants are doing well, some renovations are on hold for now.
While the cost of keeping the lights on is not likely to drop, there is some good news legislatively that restaurateurs like Tallichet said should help small business owners.
Tallichet said AB 592, for instance, will make it easier for restaurants to offer outdoor dining and alcohol service.
Effective Jan. 1, the measure extends pandemic-era flexibilities that let restaurants continue serving alcohol and food in expanded outdoor areas and operate open-air spaces without extra permits.
“Making these flexibilities we saw during the pandemic permanent is a win for restaurants, saving costs and keeping the dining experiences guests love,” he said.
Los Angeles elected officials need to take a page out of the book from their fellow elected officials in San Francisco, who have found a way to work with small business owners and “help them thrive,” Condie said.
“The restaurant industry is the No. 1 generator of sales taxes,” he said. “Yet elected leaders in L.A. County are making it harder for them to operate.”
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