Why Denny's is in damage-control mode [View all]

[ProSense]

Why Denny's is in damage-control mode

By Steve Benen

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 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.

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