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Tue Nov 20, 2012, 11:17 AM

Denny's CEO Smacks Down Franchise Owner Over Talk of Obamacare Surcharge


By Matthew Yglesias | Posted Tuesday, Nov. 20, 2012, at 10:52 AM ET

I did a column on chain restaurant owners' absurd whining about Obamacare with special attention to John Metz who owns a bunch of Denny's franchises. Metz said he was going to start placing a special Obamacare surcharge on customers' checks, and advised people that if they didn't like it they could just tip their servers less. Today the news comes that he got a stern talking-to from the Denny's CEO and is backing down on the plan.

Good for the CEO. But, again, this is just good business sense. As I wrote in the column, evidence from San Francisco suggests we should be very suspicious of firms pleading poverty as they charge surcharges. The city adopted pioneering universal health care legislation that, like Obamacare, imposed higher costs on some classes of employers. Many of them responded with special health care surcharges. Upon investigation, much of this surcharge money just ended up in the pockets of business owners, as with any other price increase.

Businesses, obviously, are free to raise prices if they think that's the best strategy. And if they think the best way to market a 5 percent price increase is to call it an "Obamacare surcharge" then why not? But my strong suspicion is that the CEO is right about this and that's actually a terrible way to market a 5 percent price increase. The basic business proposition at any restaurant is the idea that we're giving you a dining experience that's more valuable to you than the money we're asking for. It's a good deal, come eat our tasty food. Whining about the fact that your servers now have health insurance is neither here nor there in terms of the value proposition on offer, and is only going to serve to alienate people by making you look like an asshole.

-30-

http://www.slate.com/blogs/moneybox/2012/11/20/denny_s_obamacare_surchase_john_metz_smacked_down_by_denny_s_ceo.html

10 replies, 1960 views

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Reply Denny's CEO Smacks Down Franchise Owner Over Talk of Obamacare Surcharge (Original post)
DonViejo Nov 2012 OP
democrattotheend Nov 2012 #1
geek tragedy Nov 2012 #2
niyad Nov 2012 #3
Dubster Nov 2012 #4
freshwest Nov 2012 #5
pipewrench Nov 2012 #6
pipewrench Nov 2012 #7
davidpdx Nov 2012 #8
aandegoons Nov 2012 #9
Johnny2X2X Nov 2012 #10

Response to DonViejo (Original post)

Tue Nov 20, 2012, 11:37 AM

1. I didn't realize it was just a franchise owner doing the surcharge

I thought it was the whole chain. If it's just a few Denny's locations, maybe some form of leafleting in front of the restaurants is possible to inform consumers that the "Obamacare surcharge" is not actually being used to provide health care to employees since the owner is cutting them to part time.

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Response to democrattotheend (Reply #1)

Tue Nov 20, 2012, 11:38 AM

2. Which is exactly why the CEO smacked the guy down. Franchisees who hog

publicity for their own cause using the franchise brand hurt that brand.

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Response to DonViejo (Original post)

Tue Nov 20, 2012, 11:47 AM

3. on the other hand, how long did it take the ceo to respond? didn't we hear from this metz idiot

last week--way before the weekend, if I remember correctly?

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Response to DonViejo (Original post)

Tue Nov 20, 2012, 11:54 AM

4. Spam deleted by gkhouston (MIR Team)

 

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Response to Dubster (Reply #4)

Tue Nov 20, 2012, 12:40 PM

5. +1

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Response to DonViejo (Original post)

Tue Nov 20, 2012, 02:54 PM

6. DonViejo, it is starting to go viral

http://maddowblog.msnbc.com/_news/2012/11/20/15309866-why-dennys-is-in-damage-control-mode?lite

Twitter,facebook are all picking this up. The people are speaking with their wallets.

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Response to pipewrench (Reply #6)

Tue Nov 20, 2012, 03:05 PM

7. And there is papa johns walkback ;)

http://www.huffingtonpost.com/john-h-schnatter/papa-johns-obamacare_b_2166209.html

"Many in the media reported that I said Papa John's is going to close stores and cut jobs because of Obamacare. I never said that. The fact is we are going to open over hundreds of stores this year and next and increase employment by over 5,000 jobs worldwide. And, we have no plans to cut team hours as a result of the Affordable Care Act.

Clearly there was some misunderstanding somewhere. The remarks that generated the headlines were made during an entrepreneur class I was asked to speak to at a Florida college. I was asked to share my experience as an entrepreneur and to provide the students with real-life small business situations. Unbeknownst to me, until she identified herself, a reporter was there. "

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Response to DonViejo (Original post)

Wed Nov 21, 2012, 09:30 AM

8. The fact is that franchises have to abide by the rules

I'm sure the CEO told him (and rightfully so) that he'd yank his franchise right out from underneath him if he didn't back off. I hope he slapped him across the face a few times for good measure.

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Response to DonViejo (Original post)

Wed Nov 21, 2012, 09:33 AM

9. Revoke his franchise.

Show us you mean it.

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Response to DonViejo (Original post)

Wed Nov 21, 2012, 11:21 AM

10. Nice

I saw this coming. The backlash against their businesses forced their hands IMO.

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