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In the wake of President Obama's re-election, a few restaurant chains raised eyebrows by making threats related to the Affordable Care Act. An Applebees franchise owner, for example, vowed to stop building and hiring because of the health-care law.
But it was a Denny's franchise owner, John Metz, who caused the biggest stir, publicly declaring his intention to impose a 5 percent surcharge on customers at his 30 Denny's outlets to offset "Obamacare" costs. "Customers have two choices: They can either pay it and tip 15 or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give to the server," Metz said.
The backlash didn't take long. Denny's diners, including many that aren't owned by Metz, immediately saw a drop in sales, and were inundated with phone calls from angry customers. With other franchise owners panicking due to boycott threats, the corporate office is in damage-control mode.
Denny's chief executive John Miller privately reached out to Metz to express his "disappointment" with the Florida franchisee's controversial statements about Obamacare, which sparked a wave of backlash for the national restaurant chain over the past few days. Metz released a statement Monday night expressing "regret" over his statements.
"We recognize his right to speak on issues, but registered our disappointment that his comments have been interpreted as the company's position," Miller said in an email to The Huffington Post.
"Unfortunately, the comments of this franchisee, who represents less than 1 percent of our system and who owns restaurants in other concepts, has been portrayed as reflective of the entire Denny's brand," Miller added. "I am confident his perspective is not shared by the company or hundreds of franchisees/small business owners who make up the majority of the Denny's community."
For his part, Metz is in full retreat, issuing a statement denouncing the surcharge he defended last week.
But stepping back, there's a larger question to consider: why are guys like Metz griping so much about the health care law?
Small businesses with fewer than 25 employees will make out like bandits under the Affordable Care Act, with very generous subsidies to extend coverage to their employees. What's more, larger businesses that already provide insurance have nothing to worry about.
But if you're a Denny's franchise owner who doesn't offer health care benefits, and you have low-wage employees who are about to get coverage under the law, you're probably going to have to start chipping in or face a tax penalty.
Matthew Yglesias had a good piece on this yesterday, making the case that the law's requirements have merit.
John Schnatter, CEO of Papa John's and a major Mitt Romney donor and fundraiser, gave us a hint in an August call with shareholders when he complained that it would raise costs about 11 to 14 cents per pizza. That's peanuts. Between variations in sales taxes, fluctuations in ingredient costs, and place-to-place differences in rents, any food chain is used to dealing with price swings on this magnitude. At worst, an increase in labor costs along these lines is going to mean that cash wages in the service sector grow at a modestly slower rate for the next year or two.
That said, there is good reason to be generally skeptical of the idea that legislative fiat can increase workers' compensation. Compensation is ultimately going to be driven by productivity, not the whims of Congress. But if there was ever a good time to give it a shot, it's probably now. The labor compensation share of overall economic output has historically fluctuated in a narrow range, but it fell steadily in the post-dot-com era before completely collapsing during the Great Recession. The existence of a glut of unemployed workers during the past few years of recovery has prevented the fruits of economic growth from being shared with most workers. Consequently, after-tax corporate profits as a share of GDP have soared to a record level.
In other words, if there was ever a time when firms were prepared to eat higher costs because of reduced profits that time is today.
Ezra Klein added that guys like Metz really shouldn't complain too much -- under previous reform plans, presented by Democrats and Republicans, employers' burdens were much more onerous. Instead, under "Obamacare," some business will face slightly higher costs.
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Waitaminit! Papa John's will be required under AHA to put 11 to 14 cents' worth of peanuts on every pizza?! My kid's allergic to peanuts--how is this healthy???
It's actually only 3.4 to 4.6 cents per pizza.
Breaking Down Centi-Millionaire 'Papa' John Schnatter's Obamacare Math - Forbes
John Schnatter is well-known around where I live. The guy is a complete douche. For his political retailing, I urge everybody to never buy another Papa John's pizza. Let him cry about something real and teach this CEO dickweeds a lesson about what can happen when they bring their bone-headed ideology and transparently stupid arithmetic into something that affects the entire country.
The lesson to Metz: If you want to stick the knife in a democrat, use the Chamber of Commerce. That is what they are there for- so your Brand's fingerprints are not on the blade.
The point is to kill the Democrat, you don't need anyone to know who paid for the hit advertisements and threats of layoffs.
I have been a regular Papa John customer and have Pizza delivered maybe once a month. In the most recent weekly special email from them I replied:
They sent me a reply that they were considering my suggestion and would get back to me. I'm waiting...
But this cost is only being passed on to the consumer because the profit margin must be maintained. If Papa John's owner doesn't make at least $500,000/yr he'll starve. God knows, he will refuse to give up a new yacht every year just to pay for health care for his employees...or do I exaggerate?
If I was interested in dining out, Papa John's and Denny's wouldn't be on my list. Not even for the Grand Slam Breakfast. I like to eat actual, you know, food. But then I don't live in a suburb where these craptological chains are all you have (which is why Republicans are all fat, since this is what they think of as "food").
I admit, I actually like Denny's waffles. I can't make them on my own and the only other place I know I'll like them is the Clinton St. Baking Company in downtown NYC, where the line is 2 hours long.
That said, I'm not eating at Denny's anymore. I'm just going to have to buy one of those waffle-making thingies. Might as well start learning to make my own.
I don't eat at Denny's and I make my own bread, waffles, pancakes, pies, cakes and pizza, and I assure you, I won't start eating junk now. I like to know what goes into what I eat and what clean hands prepared it. Call me crazy.
These men ought to be boycotted, though, just because they're so stupid and greedy. I doubt that their pizza is good, anyway, as I lived in NY and my husband is from NY. I would eat NY pizza.
Anna B,
It is so easy to make your own waffles. Just get a waffle iron and a box of bisquick. They're so much better than any you can get in a restaurant.
Papa John's gave away a million pizzas last year and is going to give away two million this year. Does he make up the cost of those give aways in his prices? Does he make up the cost of all those advertisements in his cost? If he doesn't make up those costs, he's making enough money to cover it and cover the small cost of benefits to his employees.
BTW, I never buy chain pizza because they all taste like crap. Probably my NY upbringing eating REAL pizza.
Chicago Style!!!
Gangnam Style!!!!!!!!!!
LOU Malnatti's!!
My home made pizza! PGH style!
Hey Sarge, gonna wish me a Happy Birthday? It'll be over in 8 minutes!
Ooop's, Happy Birthday!!!!
I am getting sick and tired of businesses like Papa Johns whining about the healthcare law. They don't offer healthcare to their employees, and they don't pay them enough to afford to buy health insurance on their own. So, they end up going to the emergency room for healthcare, the absolutely most expensive way to handle healthcare. And who gets stuck with the bill for the uninsured? Those who are insured, and the taxpayer. These businesses are basically leeches that don't care who pays the bill, as long as it isn't them. These businesses are the poster children for why this country needs to stop horsing around, and just go to single-payer national healthcare. Businesses could then be totally relieved of the burden of employee healthcare costs. Unfortunately, that illumination is probably beyond the power of their meager brain cells to achieve.
Yes. Single payer is the answer. No matter what these "titans of industry" want to pay the folks working for them, those employees will have decent health care. No finding loopholes or working around the rules by cutting hours, etc.
One hopes that these little tantrums will lead us in that direction. The sooner the better.
Exactly. We already pay for their employee's health care, even if we don't eat their cardboardy pizza and runny eggs. We Built That! Time for these guys to chip in their share.
These businesses are the poster children for why this country needs to stop horsing around, and just go to single-payer national healthcare.
LMAO!!
Yes, these companies beat on their employees who are minimum wage or less and then present themselves as the Victims of ObamaCare, When in reality these companies employees are the Poster Children for ObamaCare and their employers the ... I don't know, Villain seems a bit melodramatic and hyperbolic ... Miserly? ... Penurious? ... Scrooge like?
Tis the Season.
.
Yeah, and just think of all the sneezing and coughing on your food by the employees who are sick but cannot afford a doctor or the time off to go to one.
I agree with Uff, villains is the word! These CEO's have been making their money, and they're paying their employees little, which means that everything else is profit. Don't get me wrong, I can appreciate profit, but we seem to be at a point where everything is geared towards the "bottom line" and profit over people - at what point have we forgotten about the value of the people?
Enough!
My dear, it's not that we have forgotten about the value of people; it's just that a sizeable portion of the population has bought the repub stroy that most people other than the high and mighty have no value at all. If you don't buy into the repub plutocracy/theocracy storyline, you are nothing more than a source of cheap labor and money. When you run out of either of them, you should have the good sense and courtesy to remove yourself from society, which is what happens when you can't even afford basic health care.
Let's be clear about one thing. The ER is simply a solution of last resort. I'm not knocking hospitals or the people who work there, but what an uninsured person gets in an emergency room is hardly what I would call healthcare. It's the bare minimum to stabilize the patient and then he's back out on his own, not at all like the care given to people who have insurance.
I know of one person who was out with a group of riders gathering cattle, when her horse suddenly blew up and started bucking. Maybe he was stung by a bee. No one knows why. She came down on the saddle horn and separated her pelvis. After being rushed to the local hospital, she was airlifted to a trauma unit out of state. They patched her up and sent her right back home, still gravely injured and with no follow-up care at all.
Many people in rural Montana live on very little money. It's not uncommon for families to have only $25K to $30K a year in income, and they rarely have jobs that offer health insurance. They can't afford $700 or more per month for their insurance, so they go without and hope for the best. I would go so far as to say that, if people with jobs that do include health insurance had to start paying their entire premiums out of their own pockets--even if they're making three or four or five times this amount--they'd be howling.
But the fortunate ones can sit back and pretend it's all fine because people without insurance will go to the ER and [big sigh] they and the other taxpayers will pick up the bill for those slackers. (Makes me really mad, in case you couldn't tell.)
#3.7 JL in Montana,
It's disgusting. It is not even civilized not to have the proper health insurance in America in 2012. Single payer is the way to go. What Obama gave us is clearly better than nothing and a saving grace for many, but it's neither fish, nor fowl, nor good red herring, truth be known.
There is another alternative to the "burden" of the ACA. Congress could increase the minimum wage, and remove the provision that says tipped workers can be paid less than minimum wage. Currently $2.13 an hour.
that's it? It was 2.01 an hour when I waitressed back in the 80s.
It's like WHAAAAT ! Benifits for the slaves ? Which at 2.13 is in fact slavery because that gets eaten up by FICA and other taxes . All you restaurant workers who have worked 40 hrs and not received a paycheck raise your hands .
Grand Slam indeed
As usual CA is on top of that too. Servers here have been getting paid minimum wage since the 70s. They do have to claim their tips and pay taxes on them though. I wish they had done that in NJ when I was younger and working full time for .23 an hour + tips. I'm old enough to retire now but since I didn't pay enough into SS way back when I don't get full benefits now. I have to work until I'm 72 to get them. No rest for the wicked!!
I hate to tell you this, darling, I get my full benefits, I'm 75 years old and unless I can find another job soon I will lose my apartment. I don't think being wicked is our problem, I think it has something to do with people who have too much to give any of it up.
Tigersharktoo, #4 You have got to be kidding! $2.13 an HOUR? That is obscene.
Broadly speaking, chain restaurants are located in urban and suburban areas - i.e. Democratic strongholds. I'd guess that the "surcharge" would likewise affect mostly Democrats. Boldly proclaiming your intent to screw your customer base seems a little self-defeating.
If this guy Metz wants to throw his weight around, and test the indispensibility of the Denny's franchise, go for it. There is no shortage of other crappy restaurants serving crappy food.
Actually, most chains are found in suburbs and exurbs (at least here in California) and are the food source for Republicans.
It baffles me why some business people are so hostile to Obamacare when they should have supported it as well as the public option when the health care plan was being considered. Too many business people have blindly followed the US Chamber of Commerce off the cliff because the CoC was more interested in backing up the insurance industry to the detriment of most other businesses. It is only the employers who offer no health insurance that are incurring new obligations under the law. The public option as well as other provisions of the law would bring greater stability to health care premiums for most employers and workers because they already have health care insurance through their employers. Many employers would see their share of health care premiums stabilize or possibly decrease.
Because a Democrat was able to do what a Republican doesn't want to do, provide for the people in spite of the new greed trends.
Mitt's Moochers aren't the 47%, they're guys like Schnatter and Metz who don't want to pay the most important intermediary between their businesses and their customers, their employees.
My feeling is that metz, et. al. play basketball with their black friend every Thursday the week b4 Martin Luther King day.
EXACTLY!
The biggest moocher is Walmart where most of their bottom employees are forced to get welfare to make ends meet. Taxpayers foot the bill for food stamps and Medicaid for these workers. And it is doubtful that this is going to change even with the strike on Thursday and Friday.
Mike, Walmart is a scourge and an obscenity. They abuse their employees terribly, and are death to nice, small town businesses. They've changed the landscape of America and it's not a pretty picture. I hate to shop there, and only will do so if there's no other alternative.
People who eat in fast food joints of any kind are in need of an intervention. Or, at least, they should take up a hobby.
Like cooking. From scratch, with real ingredients. It is not hard; I hear there are even books and TeeVee shows about it.
I personally can make a pizza dough using flour, water, and yeast in about five minutes. An hour later another five minutes for the toppings, and it goes into a 425 oven for 20 minutes. During which time I can post witty comments here.
Oh, the cost of this "better than his" pizza? About 50 cents.
Typical lefty...Takin' jobs away from hard workin' minimum wage 'Murcins so you can live out some hippie do-it-yourself fantasy.
Ha! Ha! Ha! DAY ! Too funny!
Chicago has a lot of local pizzerias and they are far better than the pizza chains which cannot make inroads in this market. I never order from a pizza chain or buy frozen pizza. I have more choices of places to order and many of these are family owned type pizzerias. And the prices are competitive.
"Oh, the cost of this "better than his" pizza? About 50 cents."
I dunno' what you're puttin' on your pizza, but my homemade costs me about $4.00! Maybe it's Canadian Bacon, pepperoni, sausage, 4 blend cheese, peppers, mushrooms, mozzarella; Oh, and the barbecue sauce?
Damn! I'm hungry now!
I am forced to buy frozen pizza because of ACA! (that or I am too lazy to cook).
You Built That!
DAY #7 I cook and bake everything from scratch. It is so much better and it is quite easy! We bake our own bread and make our own pies and cakes and pizza and still have plenty of time to do twenty other things we want to do!
Once, when traveling, I ate at MacDonalds. Once was enough.
For one thing, when you cook from scratch and then eat fast food, you can literally taste the artificial stuff in it. You can taste how salty it is. Your palate goes, UGH.........................
I once lost 3 hrs driving time going to Tuscon, Ate at Taco bell never again
Since employee compensation is a tax deduction, I am at a loss to understand the problem. Unless they secretly believe themselves fiefdoms, free to treat the peons as they wish, they have little to lose except their egotism.
Ummm, door number 2, Monty? And 1? And 3?
dingdingdingding
Yay and stuff!
Aesop is the go to guy regarding our uber-rich non-classy response to the November election.
How did he say it so long ago?
Something about sour-grapes! -Kevo
Ah but "your" pizza requires actual brain cells, and there's a real shortage of those!!!
But do let us know when you're next making pizza via your witty comments - I and the other readers will be right over.
Demand in the "dinner house" restaurant category is pretty elastic. The flag restaurants all use the same general metrics when siting restaurants, so most of the major chains tend to locate in the same areas. That provides lots of competition.
When I'm looking to eat out, I see many of them as interchangeable. Whether I go to Applebee's, Olive Garden, Chili's, Red Robin, or any of a dozen others often comes down to a last minute choice. It's a close call, and it's pretty easy to stay away from those with restaurant owners who act like the clowns Steve describes.
So go ahead, folks. Tack on your petty charges as a protest. Stop building (as if we'd notice, since you never locate restaurants in smaller towns where your presence might actually make a difference). Fire a few employees and cut others' pay. Just watch the way we react. You'll quickly notice your falling profits.
I wonder if Metz, Schnatter, or the Applebee's franchisee have ever heard the term, "cutting off your nose to spite your face?"
Olive Garden, which has some of the most truly awful food ever, has joined the anti-ACA, anti-Obama gang. Strike it from your list.
Fortunately Olive Garden never was on my list, but thanks for the warning.
There are train station cafeterias in Italy that are better than Olive Garden. Really it's true, I've eaten in train stations in Italy and can verify that.
shorter CEO...'if we have to provide for the employee, we're gonna take it out on the employee! If you don't like it, short their tips, boycott our business, etc. But we WILL take it out on the employee!' Nice.
it's a wonder that twit who owns Dominos Pizza didn't get on this bandwagon. He's the one who wanted a town of his own that he could force Catholic-based laws on.
I'll have to say, Metz et al, have done a bang up job in showing the country just how the GOP business is all platform could have legalized this @!$%#ry.
In the larger discussion of employee pay and healthcare, there is Walmart. Here we have the wealthiest family in America that is being subsidized by American taxpayers because their corporation underpays employees and provides no healthcare: employees depend on public assistance - reduced/free lunch program for their kids, food banks (public and private), SNAP, Medicaid, and so on. The Walton family should be ashamed of itself (and not only for that). As should the Papa John, Denny's franchisee, etc. people.
21st century edition of the Confederate planter aristocracy-- their workers have exactly as many rights as their owner says they do.
I'm sure there are alot of local restaurants around that wouldn't mind if Papa John's and Denny's franchises in their area lost some customers. Eat local is good for the small, generally family run business and the food is always better. You have a complaint, you can go to the owner. I've never understood how families afford Applebee's, Red Lobster, etc. The food is not cheap. You can get great food for 3/4 the cost at a smaller restaurant, better service, and better food. Just sayin'. Haven't graced the doors of a franchise restaurant in years (good God, especially Denny's), excluding Papa Murphy's because I like to bake my own pizza but don't necessarily have the time to put it all together.
""Customers have two choices: …"
Actually, John, they have three.
Denny's needs to be destroyed anyway, leave it to a big-mouthed (R)tard from Florida to start the process along. I look at this as a preventative health care attribute of Obama-care! Eventually rid the country of all @!$%#ty, non-nutritive food corporations, one at a time?
That sounds like a very good idea!
What is it about the basics of supply and demand that these restaurants don't understand?
I think the franchise people are learning some lessons here.
In any franchise agreement that I've seen, the company can terminate the agreement for a variety of reasons. In other words, if I own a McDonalds' franchise and I start talking to the press about how bad the product is, they (McDonalds) can pull my franchise.
Corporate people do NOT want to deal with these types of things. They're spending hundreds of millions trying to create a positive brand image.
Beyond that, the restaurant industry is one of the worst when it comes to pay and benefits for their employees.
Could this be the self-demise of greedy chain restaurants? Pretty please?
Please let it happen. My area has too few non chain restaurants.
Who is surprised?.....they got caught issuing their "idle threats" and now have to pay the piper!
Isn't it great how they brought upon themselves the low life scum they are and their "feigned outrage"" on healthcare for the most part they have neer provided in the first place...
Hey "Papa John"....I can get a pizza on any corner - whether you are in business or not!
Good job of putting the "focus on yourselves"!
I buy the extra large fresh spinach and veggie (and sometimes Pepperoni) Pizza from COSTCO. Costs. 9.99. Take it home and stuff it in the oven. Add my own seasonings.
every make your own? when you get used to it it's quick (you can bake crusts and freeze), cheaper, healthier
http://www.tasteofhome.com/Recipes/Spinach-Pizza
Papa Johns is now rolling back on its previous statements.
People are speaking out and making a difference......
http://www.huffingtonpost.com/john-h-schnatter/papa-johns-obamacare_b_2166209.html
What no one is talking about yet, but they will soon enough, is how some of these businesses (fast-food franchises) will start age discrimination and healthcare discrimination hiring policies. Basically, they'll only allow people under the age 26 to work for them who are covered by their parent's insurance! Sounds crazy now, but give it a few years and it'll be all over your local news...especially on FOX affiliates where they'll blame...you guessed it...Obamacare.