“If I leave the prices the same, but say on the menu that there is a 5 percent surcharge for Obamacare, 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, who is the primary beneficiary of Obamacare. Although it may sound terrible that I’m doing this, it’s the only alternative. I’ve got to pass the cost on to the consumer.”
~John Metz, Denny’s Franchisee and Hurricane Grill & Wings Owner
Every time the Change.org petition HERE is signed – the CEO at Denny’s will receive an email about your unhappiness about this franchisee.
The Huffington Post is reporting on yet another employer who has said he will be cutting hours for his employees and imposing an Obama surcharge for all customers to pay on their bill. This time – it’s business owner John Metz. He owns 40 Denny’s franchise locations, owns Hurricane Grill & Wings with 5 corporate stores and 43 franchisee stores, and he also owns several Dairy Queen locations. According to the Huffington Post – Metz has decided to place a 5% surcharge at all of his restaurants. As Metz sees it – a customer can choose to tip their servers less if they disagree with the surcharge because that is “who is the primary beneficiary of Obamacare”. Classy.
“Because of Obamacare, we are going to be cutting front-of-the-house employees to under 30 hours, effective immediately.”
Huffington Post wrote their article HERE:
Metz said he hopes the post-election meetings will inspire employees rather than alienate them. “What we’re going to ask them to do is to speak to their elected officials, to try to convey what this means in terms of their jobs and their livelihoods,” Metz said.
Metz said he understands the problems that will create not just for his scheduling but for his employees. “I think it’s a terrible thing. It’s ridiculous that the maximum hours we can give people is 28 hours a week instead of 40,” Metz said. “It’s going to force my employees to go out and get a second job.”
Despite the one-two hit his employees might take with possibly fewer hours and lower tips, Metz said he is not anti-insurance. His current coverage for full-time employees costs him $5,000 to $6,000 annually, he said. “Obviously, I’d love to cover all our employees under that insurance,” he said, “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.”
But as we’ve written about other businesses trying to skirt Obamacare’s healthcare requirement – the CFO at McDonalds has said the cost per McDonalds restaurant for Obamacare is no big deal and will be much less than what Mr. Metz is claiming it will cost. From the CFO of McDonalds HERE:
“On just a dollar basis that $10,000 to $30,000, we have the years like last year where commodity cost increases were even greater than that. So while it is a significant item and it’s gaining a lot of attention as the [profit and loss] item we have managed through items of this magnitude in the past. and I’m hopeful we can do that in future.”
Someone may want to let Mr. Metz know his math sucks. Now – someone at IACWE reached out to John Metz’s office to see if he had a response to the Huffington Post report. We were promptly sent to Konnect PR – a public relations firm that Mr. Metz has handling this public relations nightmare. Here’s their official written response to this debacle:
“Despite recent media coverage, Hurricane Grill & Wings is committed to exploring viable and effective ways to deal with the changing economic climate, including the implementation of The Affordable Care Act. We have always been and will continue to be 100 percent dedicated to our employees and customers and will work tirelessly to find solutions that are in their best interests.
The interview referred to potential economic changes that will affect the restaurant industry as a whole and the comments were not politically based. For Hurricane Grill & Wings and the restaurant industry as a whole the question remains what we will do to cover the expenses.
Hurricane Grill & Wings will be implementing the 28 hour rule in all corporately owned and operated restaurants starting in Q1 of 2013. The five percent surcharge mentioned in various online outlets is pure speculation and only a potential option should the law be re-written to include full-time equivalents. The surcharge is not to be implemented or considered at this time.”
So – they’re reducing hours for servers to 28 hours and a surcharge will not be considered at this time … that’s the response. The rep at the PR firm told us when Mr. Metz spoke of a surcharge – he was merely speaking about a hypothetical situation should the law be rewritten to redefine the requirement for who qualifies for Obamacare. She said should the law be rewritten – he was merely saying hypothetically that he would consider this action. But there are a few problems with this.
#1- Nobody is talking about redefining the definition of who qualifies for Obamacare presently. Not activists, not legislators, not President Obama. So – why engage in hypotheticals that no one is talking about?
#2 – She said he would only look at this if the requirement moved from a requirement of 30 hours to a requirement of 35 hours. This makes no sense because increasing the requirement would mean lower costs on business.
In May of 2012 – John Metz gave this video to Empire Builders where he specifically talked about his disdain for Obamacare:
“The Obama healthcare mandate is a prescription for disaster. I don’t see how a small business owner can possibly afford the healthcare bill as it’s currently written or as I understand it’s written as I haven’t read the bill. I doubt many people have read the bill. But from what I understand it’s going to be virtually impossible for us to be able to afford our burden or what it’s going to cost us to put that bill into affect. Unless we all get together – small business, franchisees, franchisors, everybody; unless we get together – we’re all going to find ourselves in a terrible, terrible state.”
I doubt the PR firm was aware this video existed. Notice – he said “as the healthcare bill is currently written” as opposed to the response from his PR company that says he was just talking about hypotheticals in case the law is rewritten. There is a lot not to like about this story but the single worst part is that Mr. Metz doesn’t appear to know how much this is going to actually cost his business. He has said he thinks it will cost each restaurant $175k a year where McDonalds says it will cost them a maximum of $30k per restaurant and they have many more employees. So – where is he getting his information? He’s making decisions that affect all of his employees without even getting the straight scoop on the total cost of this “burden” as he puts it.
Franchising.com profiled Mr. Metz in 2006 – you can read that HERE; an excerpt explaining how he became a Denny’s franchisee:
During the bankruptcy proceedings, Metz learned of another bankruptcy involving about 52 Denny’s restaurants. He attended the Section 363 meeting in October 2001 and became the largest purchaser of the defaulted debt in that case. Bottom line? He now owned 28 Denny’s, was approved as a franchisee, and took over operations on May 28, 2002.
“That’s how we became a franchisee. Isn’t that normal?” says Metz. The result of his “normal” has provided Metz with a unique set of strengths (and some great stories, which for now shall remain untold). “I have something that very few people have. I’ve run independent restaurants, I’ve been an independent operator, I’ve been a chain operator a la the Wag’s, and I’ve been a franchisee,” he says.
“I like being a franchisee, because if you have a good franchise, they do the heavy lifting for you. Follow their lead and they should take you to the promised land. There are bad franchises out there that will never get you there,” he says.
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