Fast Food Franchises Face ‘Nightmare’ Worker Shortage

Franchisors in the fast-food industry can’t hire workers fast enough as the U.S. economy begins to recover from pandemic lockdowns and stimulus checks, and increased unemployment insurance payouts spike demand while incentivizing some workers to stay home.

The U.S. added 280,000 jobs in the leisure and hospitality industry in March, but even that pace fell short of meeting the industry’s needs, according to a new report from Reuters.

Taco Bell plans to hire at least 5,000 employees on April 21, when it will hold spot interviews in the parking lots of more than 2,000 of its stores.

“It’s no secret that the labor market is tight,” Kelly McCulloch, Taco Bell’s chief people officer, said in a statement.

But the U.S.’s unemployment rate currently sits at 6%, almost double what it was pre-pandemic. Among teenagers, the unemployment rate more than doubles to 13.9%.

FAT Brands Inc. CEO Andy Wiederhorn told Reuters that staffing for his company’s franchisees had become a “total nightmare.”

"The most recent stimulus check and unemployment benefits have been a catalyst for people to stay at home,” he said.

But, the fast-food industry’s struggle to hire workers could just be a sign of a return to normal. The industry struggled with staffing even before the pandemic, and many fast-food chains have begun paying more than minimum wage to attract and retain talent.