San Diego County Sues Sushi Suppliers Over 'Pay-to-Work' Franchise Scheme

Overview

• San Diego County filed a lawsuit in San Diego Superior Court on June 18 naming Ace Sushi Franchise Corp., Asiana Management Group, Advanced Fresh Concepts Franchise Corp., Fujisan Franchising and Fuji Food Products.
• County attorneys allege the companies labeled chefs as independent 'franchisees' while controlling recipes, schedules, promotions and production, which the suit calls a sham franchise arrangement.
• The complaint says chefs were paid by commission, forced to cover business costs like equipment, ingredients, transportation and losses from spoilage or theft, and sometimes required to make deliveries.
• The suit alleges this misclassification let companies avoid state and local protections such as minimum wage, overtime, paid sick leave, workers’ compensation and meal and rest breaks.
• The case grew from a worker complaint to the Employee Rights Center and could prompt scrutiny of grocery-store sushi contracts as the sector has rapidly expanded since 2020 and now generates billions in sales.