This seems like a gift to big corporations.
The big guy can take the hit from the raise.
It's the small guy who is affected the most.
The law only applies to the big guys. Ikeda’s isn’t covered; the law only applies to “a restaurant chain of at least 60 establishments nationwide” [1]. It’s a good idea that generalises to e.g. any firm with more than N global employees.
[1] https://www.dir.ca.gov/dlse/Fast-Food-Minimum-Wage-FAQ.htm
When two employers pay differently, the better workers leave the lower paying one. The higher paying one has their choice of workers. The lower paying one ends up either lower quality workers.
Compare Costco to Walmart worker quality in the same area. They have the same labor pool. Costco gets better quality workers by paying for them.
If so, that makes sense.