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Forum Post: Five Guys: Obamacare will boost burger prices

Posted 7 years ago on March 13, 2013, 7:15 a.m. EST by keith1967 (-2) from Brooklyn, NY
This content is user submitted and not an official statement

Five Guys: Obamacare will boost burger prices

March 11, 2013

The fight over Obamacare, so far held at the 30,000-foot level, is about to hit home. The latest impact hot off the grill: prices of burgers and hot dogs at Five Guys, the national chain that started in Washington, are going to rise to cover the president's mandated insurance coverage.

"Any added costs are going to have to be passed on," said Mike Ruffer, a Five Guys franchise holder with eight of the popular restaurants in the Raleigh-Durham, N.C. area. He will need all the profits from at least one of his eight outlets just to cover his estimated added $60,000-a year in new Obamacare costs.

What's more, he's iced plans to build another three restaurants until after the administration explains the exact rules and penalties employers will face. The law's plan to have those available March 1 has been pushed back to October.

"I'm kind of in a holding pattern," said Ruffer, a former Marriott executive who added that many franchise owners are in a similar situation.

Ruffer was the star witness at a Monday Heritage Foundation seminar on the impact Obamacare will have on small businesses. He is typical of many: Because he has enough full time employees to activate the law, he faces either coughing up the money to provide health insurance or paying a fine of up to $3,000 per worker.

Ruffer initially thought he would escape the law because he created each restaurant as its own company. But the law doesn't recognize that distinction, so now he's trying to determine if he can fire enough workers, or cut enough hours, to slide out of the grasp of Obamacare.

He said that "scorched earth plan," however, would hurt his restaurants, so Ruffer is likely to either pay the fine or buy insurance. But spreading the costs over his basic menu of fries, drinks, burgers and hot dogs, could scare off customers, he worries. He said that the recent spike in gas prices cut into his profits since fewer people were stopping at his restaurants.

And the health care law isn't only going to hit Ruffer. He's quizzed his workers to ask if they understand that they will be fined if they don't get health insurance. Just one of 20 workers were aware of the $95 tax penalty that rises to $695 by 2016.

http://washingtonexaminer.com/five-guys-obamacare-will-boost-burger-prices/article/2523934

20 Comments

20 Comments


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[-] 1 points by Shule (2638) 7 years ago

Why eat burgers anyway?

[-] 1 points by quantumystic (1710) from Memphis, TN 7 years ago

So a douche bag franchise owner will make 420k a year instead of 480k whats the big deal? He needs that other 60k in profit? Remember this is profit we are talking about here. PROFIT!

[-] 0 points by urbanguy (-67) 7 years ago

problem with that argument is what would you say if an unemployed homeless guy looked at your paycheck and told you your profit was too much and unfair.

[-] 0 points by quantumystic (1710) from Memphis, TN 7 years ago

False analogy fallacy.

[-] 0 points by urbanguy (-67) 7 years ago

once you get down to it, all of us are the 1% to somebody somewhere in the world.

[-] 1 points by factsrfun (8231) from Phoenix, AZ 7 years ago

I've been wanting to open a burger shop but I insist on giving my workers health care and decent pay. Can't wait till these vultures go out of business so some actual good business people who can run a business and still not depend on tax payers or hospital shareholders to pick up the tab if one of my workers gets sick.

[-] 1 points by quantumystic (1710) from Memphis, TN 7 years ago

I have been exploring the feasibility of a field to table operation producing and preparing meals 100% organic from scratch from self produced and locally sourced goods with a sociocratic based worker owned and managed operation. I don't need ceo level compensation for putting in the work I would settle for providing myself and co-workers with the means to provide for ourselves and our families. An equitable distribution of wealth would drive worker productivity. After all if they put out top notch plates and give top notch service this drives productivity in the restaurant business. Profit sharing and work place democracy can enhance the capitalist incentive principle, driving the staff to perform at the highest level they are capable of. This is very important during the "rush". Ensuring both quality product and service through even the busiest times.

[-] -1 points by keith1967 (-2) from Brooklyn, NY 7 years ago

So if you've been wanting, then why haven't you?

[-] 1 points by factsrfun (8231) from Phoenix, AZ 7 years ago

Tough to run a free enterprise business and compete against slave owners who depend on others to pick up the costs of their labor. At least at the burger shop level.

[-] -1 points by keith1967 (-2) from Brooklyn, NY 7 years ago

BS. You sound like a lazy fook.

[-] 2 points by penguento (362) 7 years ago

You'll find that's a common theme around here. Lots of folks whose hearts are burning with socialist zeal, but when it comes time for them to actually get up off their ass and do something, there's always some implacable and utterly invincible bad guy in the way that prevents them from ever starting. Ah, if only all those bad guys would just get out of the way and let people do their good work! All would be right with the world.

[-] 0 points by quantumystic (1710) from Memphis, TN 7 years ago

ahhhhhh socialism ahhhhhhhh.

[-] -2 points by blacksad (-58) 7 years ago

Some people talk. Some people do.

[-] 3 points by inclusionman (7064) 7 years ago

Some talk do do.

[-] 1 points by Shule (2638) 7 years ago

The talk comes with the walk.

[-] 2 points by inclusionman (7064) 7 years ago

Five guys burgers are already overpriced and expanding greatly. The owners are making crazy money, so if they are squealin about the cost of providing healthcare for their employees they have no sympathy from me.

[-] 1 points by Shule (2638) 7 years ago

I don't have any sympathy for those guys, or any other national restaurant chain either. When I go out, I only go to locally owned establishments. And I don't eat cow burgers in the first place.

[-] 2 points by inclusionman (7064) 7 years ago

Sounds like you are one step ahead of most people. We need more with your mindset.

[-] 0 points by Corium (246) 7 years ago

Several years ago I was a partner in a dance studio. Our employees were complaining about the pay, so I broke down the entire business model for them. Things they didn't know...

  1. They had the highest percentage of profit compensation in the State.
  2. To cover all the bills, taxes, and payroll; the studio had to gross $340,000... just to break even.
  3. Even the money over $340K had a cost to it... it was not pure profit.
  4. The bonuses and perks we provided came out of anything over $340K... it was owner profits that we gave up to them.

We were very open with our dance teachers. Once they understood the big numbers they were seeing were just enough to keep a small business going, it helped set the stage for better future performance of the school.

I don't know how the new health insurance regs are going to effect the business, but my guess is we would have had to reduce the number of employees to to make the numbers work.

[-] 0 points by quantumystic (1710) from Memphis, TN 7 years ago

"Any added costs must be passed to the consumer cause I am not taking a pay cut"----any fucking multi million dollar making CEO.