For 25 years, Mike Georgopoulos — better known to his friends as "Mikey G" — has built a legacy in San Diego, opening 30 restaurants in the last decade alone. But today, the veteran entrepreneur says the California dream is being choked by a math problem that no longer adds up. With raw material costs rising sharply and energy bills up 24%, Georgopoulos said a staggering 2% cost is being ripped straight from the bottom line before a single burger hits the grill. In an industry where a 5% profit margin is considered a win, Georgopoulos warns that owners are now "trapped" in a "vicious cycle" of record gas prices and what he calls predatory regulations that have them "working for peanuts" just to keep the doors open. "We built over 30 restaurants in the last 10 years. The barrier to entry is insane. It takes years to get permits and entitlement. It costs a lot of money, and there's a lot of money at risk before you even have your award of the appropriate permits. So you may have to risk some money and then not get what you need," he told Fox News Digital from his newly-opened brewery. "They're working for peanuts because they just can't make it, but they're trapped. They can't get out. They own a business, they're in a lease, they have no other place to go. So they're just in a vicious cycle, and there's just nothing coming out on the other end in terms of profit," Georgopoulos added. "It’s sticker shock, it really is." CALIFORNIA'S ‘ABUSIVE RELATIONSHIP’ WITH ONE-PARTY RULE IS CRUSHING FAMILIES, ‘COMING FOR YOU,’ CRITICS WARN Rising energy and electricity costs began to escalate for California small businesses in 2022 after the pandemic, according to the restaurateur, but bills saw what he described as double-digit hikes since the conflict involving Iran intensified just over a month ago. At this point, Georgopoulos is "constantly" changing pricing on his menus, but admits prices should have increased by 100% over the past two years. "It's pretty significant. It's a lot and it's going up. It's not coming down," he said. "But there is an upper limit to what people are willing to pay before they decide to cook it at home. So we have to cut in other areas and keep our menu prices competitive… In California, our labor is as high as anywhere in the nation, and we don't have a tip credit, which is disappointing, to say the least. So we have to reduce labor costs by reducing staffing, so cutting shifts, making shifts shorter, which then takes away from the guest experience… and that’s the struggle we go through month by month." "It's clear cash flows are clearly impacted by what we are experiencing today. Not only gas prices, but just turbulence in what the future has to hold for small businesses. But it's clearly from anywhere from accounts receivable to accounts payables, we're seeing some slowness in those factors. That basically tells us the pressure is there, and it's mounting," Cardiff Co-CEO Mo Tehrani, whose lending company has funded more than $12 billion in small business loans and even helped Georgopoulos, also told Fox News Digital. "Especially in California, we have probably the highest gas prices anywhere in the country, and it's directly impacting small margins that the transportation sector operates under. So it's an immediate impact," the CEO continued. "The pump obviously impacts how people hire, how people route their deliveries, surcharges, pricing their products, all those things are impacted."
