While several restaurant chains scale back operations in California amid rising labor costs and the state's $20 fast-food minimum wage — a mandate that took effect April 1, 2024, under the FAST Act (AB 1228) — Freddy's Frozen Custard & Steakburgers CEO Chris Dull is making an aggressive bet on the Golden State, arguing that California receives undue criticism as a challenging place to do business.

"I feel like California gets a bad rap. It's hard to find markets that offer you the same level of densities that you see in and around the state of California," Dull told Fox News Digital.

"It's a state that has historically been a good state for restaurant brands. Volume is there to be had and lots of guests for you to speak to and turn into raving fans," he added.

Dull's remarks come as one of Carl's Jr.'s largest franchisees plans to shutter 10 locations and sell 49 others — affecting 59 restaurants in total — following a Chapter 11 bankruptcy protection filing earlier this year. Separately, veteran California restaurateur Mike Georgopoulos recently cautioned that the state's business environment has devolved into an unsustainable equation, previously telling Fox News Digital that operators are "working for peanuts."

"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 said. "It's sticker shock, it really is."

The pullback reflects broader tension in California's fast-food sector, where the wage mandate — covering roughly 500,000 workers at chains with 60 or more locations nationally — has prompted operators across multiple brands to raise menu prices, reduce hours, or restructure. Dull, who took the helm as CEO in 2021, pushed back against concerns regarding California's business climate. He argued that the difficulties confronting competitors can actually generate openings for growth-oriented brands like Freddy's.

"Sometimes when you see units that are moving out of markets or shuttering doors, that can actually be a great opportunity for folks like us who are growing. We can go in," Dull told Fox News Digital.

The Kansas-based burger chain, which operates more than 500 restaurants nationwide, is actively recruiting new franchisees and intends to open 60 new locations this year, with a particular focus on Northern California.

"California is such a big state. You can focus on regions and still experience pretty tremendous growth, whereas in some of the smaller states, you need the whole state to really make it pan out for you," Dull said.

Freddy's already runs a handful of California locations, but the expansion is designed to build "density," according to the CEO, as the chain seeks to win over customers in a market long dominated by In-N-Out Burger and other entrenched competitors.

"We have been making our way further and further west and have restaurants operating in California today. And California offers densities that are hard to find in other parts of the country," he told Fox News Digital.

Dull explained that Freddy's calibrates its pricing to reflect local labor, real estate, and operating costs as it enters new markets.

"Markets where you experience higher real estate costs and higher labor costs, you will also have a higher ticket for your products. It all rolls up," said the CEO.

Freddy's is expanding in California, where the fast-food minimum wage stands at $20, while simultaneously opening locations in Florida, where the statewide minimum wage is $14.

"If a business is being charged more in rent and more in labor, they simply have to charge more for their product, or they will not be profitable," Dull said.

"It's about pricing your product at a value where your operator can still generate a profit given the cost structure that they're looking at in any given market, which means that you will have variation in your pricing across the United States," he added.