Tags: five guys | obamacare | burger | costs

Obamacare Costs Will Boost Burger Prices, Five Guys Franchisee Says

Tuesday, 12 Mar 2013 03:27 PM

By Michael Mullins

A franchise holder with the popular national burger chain Five Guys recently announced his intention to raise the prices of burgers due to costs associated with the Patient Protection and Affordable Care Act, popularly known as Obamacare.

"Any added costs are going to have to be passed on," said Mike Ruffer, a Five Guys franchisee who runs eight of the restaurants in the Raleigh-Durham, N.C. area, the Washington Examiner reported.

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Under the new healthcare law, businesses with 50 or more full-time employees must offer health benefits to staffers who work between 32 and 38 hours.

Ruffer said the Obamacare surcharge will be an additional $60,000 annual expense for his business.

The franchisee also said that he postponed plans to open three new Five Guys locations until the rules and penalties employers will face under the new law are established, which won’t be until October, the Examiner reported.

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

Ruffer also said he feared the across-the-board price increase on his menu might drive away customers, adding that the recent spike in gas prices has already impacted his business.

Five Guys corporate was quick to distance itself from Ruffer's remarks on Obamacare.

"Mike Ruffer is a franchisee of Five Guys and independent business owner," Molly Catalano, director of communications and public relations, wrote in an email to The Huffington Post on Monday. "He does not represent Five Guys on this or any other subject matter."

In January, a Wendy's franchisee holder expressed similar concerns about the effects of Obamacare on his business.

Rather than increase menu prices, the business owner said he would reduce hours for all managerial workers at his Omaha-area Wendy's locations so that they no longer qualify for health insurance as full-time employees.

Additionally, in 2012, following the re-election of President Barack Obama, Papa John's CEO John Schnatter and Darden Restaurants — the parent company of chains like Olive Garden, Red Lobster, and LongHorn Steakhouse — announced the restaurants would similarly be transitioning their full-time employees to part-time status to avoid Obamacare-associated costs.

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In December, both Papa John's and Darden Restaurants backed off their Obamacare driven decisions to reduce employees' hours.

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