SONIC CEO: There's 'no doubt' customers will pay more because of minimum wage hikes

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Sonic's CEO Says if Minimum Wages Rise, Menu Prices Might, Too

As major locales from Chicago to California roll out new, higher minimum wages, one of the essential questions of the moves is their impact on the broader economy.

Clifford Hudson, CEO of Sonic, thinks that at the very least these wage hikes will show up on consumer's menus.

"I am not suggesting that there is not a challenge to move that kind of pricing, that kind of hourly wage pricing component, but these are proposed on a multi-year stage basis and there is no doubt that this is going to be inflationary as this relates to consumer product," Hudson said in his company's quarterly conference call Tuesday.

Related: Protests demanding $15/hour minimum wage for fast food workers:

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U.S. fast food worker protests for $15 minimum wage
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SONIC CEO: There's 'no doubt' customers will pay more because of minimum wage hikes
NEW YORK, NY - NOVEMBER 10: Low wage workers and supporters protest for a $15 an hour minimum wage on November 10, 2015 in New York, United States. In what organizers are calling a National Day of Action for $15 and hour minimum wage, thousands of people took to the streets across the country to stage protests in front of businesses that are paying some of their workers the minimum wage. Home care workers, employees in retail and fast food restaurants say that the current minimum is not a living wage. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - NOVEMBER 10: New York City Mayor Bill de Blasio makes an appearance in support of low wage workers, many in the fast-food industry, as they join with supporters to demand a minimum wage of $15 an hour on November 10, 2015 in New York, United States. In what organizers are calling a National Day of Action for $15 and hour minimum wage, thousands of people took to the streets across the country to stage protests in front of businesses that are paying some of their workers the minimum wage. Home care workers, employees in retail and fast food restaurants say that the current minimum is not a living wage. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - NOVEMBER 10: Low wage workers and supporters protest for a $15 an hour minimum wage on November 10, 2015 in New York, United States. In what organizers are calling a National Day of Action for $15 and hour minimum wage, thousands of people took to the streets across the country to stage protests in front of businesses that are paying some of their workers the minimum wage. Home care workers, employees in retail and fast food restaurants say that the current minimum is not a living wage. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - NOVEMBER 10: Low wage workers and supporters protest for a $15 an hour minimum wage on November 10, 2015 in New York, United States. In what organizers are calling a National Day of Action for $15 and hour minimum wage, thousands of people took to the streets across the country to stage protests in front of businesses that are paying some of their workers the minimum wage. Home care workers, employees in retail and fast food restaurants say that the current minimum is not a living wage. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - NOVEMBER 10: Low wage workers and supporters protest for a $15 an hour minimum wage on November 10, 2015 in New York, United States. In what organizers are calling a National Day of Action for $15 and hour minimum wage, thousands of people took to the streets across the country to stage protests in front of businesses that are paying some of their workers the minimum wage. Home care workers, employees in retail and fast food restaurants say that the current minimum is not a living wage. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - NOVEMBER 10: Low wage workers and supporters protest for a $15 an hour minimum wage on November 10, 2015 in New York, United States. In what organizers are calling a National Day of Action for $15 and hour minimum wage, thousands of people took to the streets across the country to stage protests in front of businesses that are paying some of their workers the minimum wage. Home care workers, employees in retail and fast food restaurants say that the current minimum is not a living wage. (Photo by Spencer Platt/Getty Images)
NEW YORK, NY - NOVEMBER 10: Low wage workers and supporters protest for a $15 an hour minimum wage on November 10, 2015 in New York, United States. In what organizers are calling a National Day of Action for $15 and hour minimum wage, thousands of people took to the streets across the country to stage protests in front of businesses that are paying some of their workers the minimum wage. Home care workers, employees in retail and fast food restaurants say that the current minimum is not a living wage. (Photo by Spencer Platt/Getty Images)
FORT LAUDERDALE, FL - SEPTEMBER 10: Laura Rollins joins with others to protest in front of a McDonald's restaurant in support of a $15 an hour minimum wage on September 10, 2015 in Fort Lauderdale, Florida. Seattle, San Francisco and Los Angeles are among cities that have adopted a $15 an hour minimum wages. (Photo by Joe Raedle/Getty Images)
FORT LAUDERDALE, FL - SEPTEMBER 10: Laura Pierre joins with others to protest in support of a $15 an hour minimum wage on September 10, 2015 in Fort Lauderdale, Florida. Seattle, San Francisco and Los Angeles are among cities that have adopted a $15 an hour minimum wages. (Photo by Joe Raedle/Getty Images)
CHICAGO, IL - JUNE 22: Marie Gasaway protests with fast food workers and community activists outside a McDonald's restaurant in the Loop on June 22, 2015 in Chicago, Illinois. The protestors were calling for an increase in the minimum wage to $15-dollars-per-hour. The demonstration was staged to coincide with the 4th hearing of the Wage Board in New York City as it debates the $15-dollar-per-hour increase for its workers. (Photo by Scott Olson/Getty Images)
FORT LAUDERDALE, FL - SEPTEMBER 10: Protesters in support of a $15 an hour minimum wage march together on September 10, 2015 in Fort Lauderdale, Florida. Seattle, San Francisco and Los Angeles are among cities that have adopted a $15 an hour minimum wages. (Photo by Joe Raedle/Getty Images)
CHICAGO, IL - JUNE 22: A woman begs for change as fast food workers and community activists protest outside a McDonald's restaurant in the Loop on June 22, 2015 in Chicago, Illinois. The demonstrators were calling for an increase in the minimum wage to $15-dollars-per-hour. The demonstration was staged to coincide with the 4th hearing of the Wage Board in New York City as it debates the $15-dollar-per-hour increase for its workers. (Photo by Scott Olson/Getty Images)
CHICAGO, IL - JUNE 22: Juan Hernandez, 8, protests with his mother, who works for McDonald's, and other fast food workers and community activists outside a McDonald's restaurant in the Loop on June 22, 2015 in Chicago, Illinois. The protestors were calling for an increase in the minimum wage to $15-dollars-per-hour. The demonstration was staged to coincide with the 4th hearing of the Wage Board in New York City as it debates the $15-dollar-per-hour increase for its workers. (Photo by Scott Olson/Getty Images)
CHICAGO, IL - JUNE 22: Fast food workers and community activists protest outside a McDonald's restaurant in the Loop on June 22, 2015 in Chicago, Illinois. The protestors were calling for an increase in the minimum wage to $15-dollars-per-hour. The demonstration was staged to coincide with the 4th hearing of the Wage Board in New York City as it debates the $15-dollar-per-hour increase for its workers. (Photo by Scott Olson/Getty Images)
CHICAGO, IL - JUNE 22: Fast food workers and community activists protest outside a McDonald's restaurant in the Loop on June 22, 2015 in Chicago, Illinois. The protestors were calling for an increase in the minimum wage to $15-dollars-per-hour. The demonstration was staged to coincide with the 4th hearing of the Wage Board in New York City as it debates the $15-dollar-per-hour increase for its workers. (Photo by Scott Olson/Getty Images)
Demonstrators march past a McDonald's Corp. restaurant during a rally in Oak Brook, Illinois, U.S., on Wednesday, May 20, 2015. Labor activists seeking $15-an-hour wages marched on McDonald's headquarters on Wednesday, marking the second straight year of protests ahead of the fast-food chain's annual meeting. Photographer: Daniel Acker/Bloomberg via Getty Images
CHICAGO, IL - JUNE 22: Fast food workers and community activists protest outside a McDonald's restaurant in the Loop on June 22, 2015 in Chicago, Illinois. The protestors were calling for an increase in the minimum wage to $15-dollars-per-hour. The demonstration was staged to coincide with the 4th hearing of the Wage Board in New York City as it debates the $15-dollar-per-hour increase for its workers. (Photo by Scott Olson/Getty Images)
Demonstrators march during a rally near a McDonald's Corp. restaurant and the headquarters in Oak Brook, Illinois, U.S., on Wednesday, May 20, 2015. Labor activists seeking $15-an-hour wages marched on McDonald's headquarters on Wednesday, marking the second straight year of protests ahead of the fast-food chain's annual meeting. Photographer: Daniel Acker/Bloomberg via Getty Images
A demonstrator holds a sign that reads 'People and Planet over Profit' during a rally near a McDonald's Corp. restaurant and headquarters in Oak Brook, Illinois, U.S., on Wednesday, May 20, 2015. Labor activists seeking $15-an-hour wages marched on McDonald's headquarters on Wednesday, marking the second straight year of protests ahead of the fast-food chain's annual meeting. Photographer: Daniel Acker/Bloomberg via Getty Images
Demonstrators march during a rally near McDonald's Corp. headquarters in Oak Brook, Illinois, U.S., on Wednesday, May 20, 2015. Labor activists seeking $15-an-hour wages marched on McDonald's headquarters on Wednesday, marking the second straight year of protests ahead of the fast-food chain's annual meeting. Photographer: Daniel Acker/Bloomberg via Getty Images
Demonstrators march during a rally near McDonald's Corp. headquarters in Oak Brook, Illinois, U.S., on Wednesday, May 20, 2015. Labor activists seeking $15-an-hour wages marched on McDonald's headquarters on Wednesday, marking the second straight year of protests ahead of the fast-food chain's annual meeting. Photographer: Daniel Acker/Bloomberg via Getty Images
Home health care workers and other protesters hold signs at a rally in support of minimum wage increase in New York, U.S., on Wednesday, April 15, 2015. Fast-food workers held rallies in 236 U.S. cities Wednesday in their biggest protest yet for higher pay and union rights. Photographer: Victor J. Blue/Bloomberg via Getty Images
Home health care workers hold signs at a rally in support of minimum wage increase in New York, U.S., on Wednesday, April 15, 2015. Fast-food workers held rallies in 236 U.S. cities Wednesday in their biggest protest yet for higher pay and union rights. Photographer: Victor J. Blue/Bloomberg via Getty Images
Protesters hold signs at a rally in support of minimum wage increase in New York, U.S., on Wednesday, April 15, 2015. Fast-food workers held rallies in 236 U.S. cities Wednesday in their biggest protest yet for higher pay and union rights. Photographer: Victor J. Blue/Bloomberg via Getty Images
Protesters hold signs at a rally in support of minimum wage increase in New York, U.S., on Wednesday, April 15, 2015. Fast-food workers held rallies in 236 U.S. cities Wednesday in their biggest protest yet for higher pay and union rights. Photographer: Victor J. Blue/Bloomberg via Getty Images
Protesters hold up a Ronald McDonald puppet at a rally in support of minimum wage increase in New York, U.S., on Wednesday, April 15, 2015. Fast-food workers held rallies in 236 U.S. cities Wednesday in their biggest protest yet for higher pay and union rights. Photographer: Victor J. Blue/Bloomberg via Getty Images
Signs lay in the street before the start of a rally in support of minimum wage increase in New York, U.S., on Wednesday, April 15, 2015. Fast-food workers held rallies in 236 U.S. cities Wednesday in their biggest protest yet for higher pay and union rights. Photographer: Victor J. Blue/Bloomberg via Getty Images
Protesters hold signs at a rally in support of minimum wage increase in New York, U.S., on Wednesday, April 15, 2015. Fast-food workers held rallies in 236 U.S. cities Wednesday in their biggest protest yet for higher pay and union rights. Photographer: Victor J. Blue/Bloomberg via Getty Images
CHICAGO, IL - APRIL 15: Demonstrators gather in front of a McDonald's restaurant to call for an increase in minimum wage on April 15, 2015 in Chicago, Illinois. The demonstration was one of many held nationwide to draw attention to the cause. (Photo by Scott Olson/Getty Images)
CHICAGO, IL - APRIL 15: Demonstrators gather in front of a McDonald's restaurant to call for an increase in minimum wage on April 15, 2015 in Chicago, Illinois. The demonstration was one of many held nationwide to draw attention to the cause. (Photo by Scott Olson/Getty Images)
CHICAGO, IL - APRIL 15: Demonstrators gather in front of a McDonald's restaurant to call for an increase in minimum wage on April 15, 2015 in Chicago, Illinois. The demonstration was one of many held nationwide to draw attention to the cause. (Photo by Scott Olson/Getty Images)
Fast food workers, healthcare workers and their supporters shout slogans at a rally and march to demand an increase of the minimum wage to 15USD per hour, in Los Angeles on December 4, 2014. The nationwide protest is expected to reach 190 US cities. AFP PHOTO / ROBYN BECK (Photo credit should read ROBYN BECK/AFP/Getty Images)
Fast food workers, healthcare workers and their supporters shout slogans at a rally and march to demand an increase of the minimum wage to 15USD per hour, in Los Angeles on December 4, 2014. The nationwide protest is expected to reach 190 US cities. AFP PHOTO / ROBYN BECK (Photo credit should read ROBYN BECK/AFP/Getty Images)
Two women order food as striking fast food workers, home healthcare workers and their supporter shout slogans inside a MCDonalds during a rally and march to demand an increase of the minimum wage to 15USD per hour, in Los Angeles on December 4, 2014. The nationwide protest is expected to reach 190 US cities. AFP PHOTO / ROBYN BECK (Photo credit should read ROBYN BECK/AFP/Getty Images)
NEW YORK, NY - DECEMBER 04: Protesters march through the streets demanding a raise on the minimum wage to $15 per hour on December 4, 2014 in New York, United States. The movement, driven largely by fast food workers, has risen in prominence in the past year; today's protests were also joined by demonstrators angry at the Grand jury verdict to not indict the police officer who killed Eric Garner in July, 2014. (Photo by Andrew Burton/Getty Images)
NEW YORK, NY - DECEMBER 04: Protesters march through a McDonalds demanding a raise on the minimum wage to $15 per hour on December 4, 2014 in New York, United States. The movement, driven largely by fast food workers, has risen in prominence in the past year; today's protests were also joined by demonstrators angry at the Grand jury verdict to not indict the police officer who killed Eric Garner in July, 2014. (Photo by Andrew Burton/Getty Images)
WASHINGTON, DC - DECEMBER 04: U.S. Sen. Bernie Sanders (I-VT) speaks to low-wage federal contract workers during a protest where the workers demanded presidential action to win an increase to $15 an hour wage December 4, 2014 in Washington, DC. A number of workers were expected to walk off their jobs later in the day as part of the protest. (Photo by Win McNamee/Getty Images)
WASHINGTON, DC - DECEMBER 04: Low-wage federal contract workers block rush hour traffic on Independence Avenue while demanding presidential action to win an increase to $15 an hour wage December 4, 2014 in Washington, DC. A number of workers were expected to walk off their jobs later in the day as part of the protest. (Photo by Win McNamee/Getty Images)
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Hudson said that price hikes are simply a way to keep his franchises running profitably.

"It is going to be incumbent to fund us or them as that development occurs," he said. "To help them develop a pricing model et cetera that works for them in such a way that doesn't disrupt their business, their individual store or on a broader enterprise basis."

This isn't a radical assumption, economic theory has for years posited the link between wages and inflation, but the micro-level confirmation of the idea is worth noting.

Hudson goes on to compare the adjustment period for the minimum wage hikes to the shift after the passage of the Affordable Care Act. He also addressed a major fear regarding the wage hikes. Here's Hudson (emphasis added):

We did the same thing with our operators as related to Affordable Care Act... and we spent a long period of time showing how to utilize it, what to think about it from a pricing standpoint, how to engage their employees and certainly not to start cutting back employees time because we are concerned that it would negatively impact service and then in return their sales and profitability.

One of the biggest arguments against minimum wage raises is the possibility that to cut costs, companies would either scale back employee hours or fire them altogether. No so much, according to Hudson.

While Sonic's moves may not be indicative of the broader impact of these moves, a food service company with over 10,000 employees is a decent guide of what corporate America is thinking of the shift.

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