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Making Them Own It

Denny’s Restaurant Franchisee Fights Back against the State

Florida based restaurant boss John Metz, who runs approximately 40 Denny’s and owns the Hurricane Grill & Wings franchise has decided to offset that (The Cost of Obamacare) by adding a five percent surcharge to customers’ bills and will reduce his employees’ hours.

If you still shake your head and wonder why Alabama Governor, Robert Bentley won’t set up a HIX or participate in the Obamacare Medicaid expansion, John Metz offers us some insight. No matter how much free health insurance you were promised; some poor sucker always gets left holding the bag.

Neither John Metz nor Robert Bentley got where they are in their respective careers by being foolish enough to pay the bill and bury the expense on behalf of someone else. Doing so would make each man’s life harder and offer the government the opportunity to claim they were handing out bologna sandwiches for free. Doing so would give Obamacare what Ayn Rand once described as The Sanction of The Victim. Leonard Peikoff defines this term below.

The “sanction of the victim” is the willingness of the good to suffer at the hands of the evil, to accept the role of sacrificial victim for the “sin” of creating values.

Restaurateurs have born the early brunt of Obamacare. Applebee’s and Papa John’s Pizza are also facing a dilemma that pits their balance sheets athwart their desire for political and social good will. The UK Daily Mail again reports news from the US that our own biased media refuses to touch.

Papa John’s came under fire this week when CEO John Schnatter floated a plan to cut worker hours to reduce spiking employee health care costs under the Affordable Care Act, otherwise known as Obamacare. Now, Applebee’s is being boycotted after a major New York area Applebee’s franchise owner Zane Tankel threatened a hiring freeze and possible layoffs as a result of the president’s healthcare plan.

This should come as no surprise to anyone with a background in managerial accounting. Restaurants are capital light and personnel heavy compared to manufacturing. They are vulnerable to things that make hiring and maintaining full time employees more expensive. The closer their material costs are to wholesale margin (think Denny’s or Applebee’s vs Ruth’s Chris or Musso and Frank’s) the more an unfunded Federal Mandate against their cost to maintain a full time employee bites. People like Metz, Tankel and Schattner do not get to charge you for ambiance. They also are not making up for it in material charges the way a Boeing or a General Motors would.

As Zack Tankel explains, ‘If you have 40 or 50 employees at a restaurant, and the penalty is $2,000, and you’re going to pay $80,000 or $100,000 penalty, there goes the profit in your restaurant.’

Mr. Metz puts his bill even higher, as he contemplates actually insuring his people under the inflated insurance costs caused by Obamacare.

‘But to pay $5,000 per employee would cost us $175,000 per restaurant and unfortunately, most of our restaurants don’t make $175,000 a year. I can’t afford it.’

When President Barack Obama initially sold Obamacare, He promised a much different scenario. Organizing For America offers the following description of Obamacare for public consumption propaganda.

None of these plans should deny coverage on the basis of a preexisting condition, and all of these plans should include an affordable basic benefit package that includes prevention, and protection against catastrophic costs. There are those who strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans…

Wonderful! This sounds like what any health insurance purchaser would want for Christmas. The only thing our fearless leader neglected to tell us is that there is no such thing as Santa Claus. I commend the restaurant owners, governors and everyone else in America who are now reminding our President that Santa Claus does not exist and that somebody always gets stuck with the tab for any promised free lunch. Congratulations Mr. President! Denny’s just made you own it.

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