Interesting ACA side effect (Page 2)

In this particular example, though, I don't know why this can't pass through to consumers.  Would you notice if your pizza cost 14 cents more than you used to pay for it???  A $9.99 pie is now $10.13.  that can't be the whole story....

Yeah, that's only $35,000,000.00 per year increase in overhead,,,, peanuts

Only works if everyone takes the price increase. If someone doesn't, those that do will feel it in the form of lost customers.

i get that, and if it were a significant price increase i wouldn't even consider it.  but it's 14 CENTS on a 10 - 15 DOLLAR product.  it is a 1% increase.  if it were $1 or $2, it would be a large difference.  but it's seriously 14 freakin cents.

But isn't there a known impact of people being willing to pay "$9.99" far more than they're willing to pay "$10.00". 

Unless they hide it in a surcharge "ACA surcharge $0.14" but then that's a little suspicious isn't it?

the supreme court DID say it was a tax!

If they are only making $0.10 per pizza, then they must be selling a LOT of pizzas. Here is Papa John's house:

At $0.10 per pizza, he would have had to sell 6,000,000,00 pizzas - which even over the 28 years he's been in business seems like a lot of pizza.

He's also since announced that he will (a) raise the price of pizza by $0.50 cents, not just 11-14; and (b) cut the hours of employees to 30 or less. So that reads me to that he will be increasing his profit margin by another $0.50/pie.

"The pizza chain head has made his views on the Affordable Care Act clear in recent months, claiming the new health care law will cost his business about $5 to $8 million per year. To compensate Schnatter's said he will likely raise pizza prices and cut back some workers’ hours so he doesn’t have to insure them. "

http://www.huffingtonpost.com/2012/11/13/papa-johns-obamacare_n_2123207.html

2 million pizzas at even $10 could be 20 million in lose revenue (not counting tv spots promoting it). 

I think its more he will charge $50 to a $1.00 more a pizza blame it on obama care and make more ever ever.  Even if he charges $.15 more and according to Forbes it is less than $.05 a pizza means he would still make $.10 more per pizza.  So putting out a poor me can be very profitable for business. 

Should he quit advertising too? That money could be used for health care as well.

You guys are making me laugh.  I love the bash the owner of a business because he makes money argument.  "he should do this, he should do that".  Well here's a lesson in reality.  HE'S NOT and many other businesses owners are not either.  That's the number one flaw with the progressive mindset.  For every thing you do that "makes us all better", there are unintended consequences that generally harm far more people than they help.

Also, most of these guys make their money on the value of the company over many years of growth.  They're not pulling in $100M salaries, they're usually pulling a small salary like Warren buffet making $100k/yr.  I'm not insinuating they're poor, but it's not as simple as just having the fat cat take a pay cut and all is well with the bottom line.

I just looked at Papa Johns financials.  They had a Net income of $55M dollars last year on $1.22B in revenue.  According to Wikipedia they have 16,000 employees.  I know many of them likely already have insurance, but just for arguments sake just paying the $2k fine which would be far cheaper than insuring those people would cost over $32M which based on their current P/E ratio would drop their companies value by $604M or 55%.  That would go over well in everyones 401k

And you're right now only talking about the LAST link in the chain that gets the pizza into your hands. What about every level of marketing/distribution that gets it to HIS hands? How many of THOSE part-time people are in the same boat? Those business owners are facing the same situation, and they'd be stupid to not follow suit with similar moves. So your $.14 in that last step becomes, what, $.28? $.35? How many layers are we talking about here. And it's not just the pizza... it's everything you buy, every service you consume.

Because Papa Johns are mostly (entirely?) individual franchises, does anyone know if they're defined under Obamacare as 2,600 separate small business, or as one single employer of 16,000?  If it's the former, I doubt that there's more than a few Papa John's out there that would have 50 full time employees on the payroll.  That 2,600 number is also from wikipedia, so assuming 2,600 and 16,000 are fairly accurate figures, that's an average of less than 7 employees per store.  And even if a single store does have 50 employees, they'd only be penalized for 20.  It might be crippling to the one mega-Papa John's, but that's a far cry from $32 million in penalties.

If it's the latter, then the penalty to not insurance everyone would indeed be huge.  

Rarely do people own just one store.  I have one friend who owns a little ceasars franchise and he has 9 of them.  The guy who owns the jimmy johns store is another example.  His corporation owns a lot of stores.

It's next to impossible to make any significant money with just one fast food joint so I'd venture to guess that 80-90% are owned by corporations that have many stores.

You are correct though for the food joint that just has a handful of employees.

Most of the people who own a franchise have more than one store. I don't know what the average # is though.

So in your world what is a fair percentage of profit?

$55M dollars net income last year on $1.22B in sales; 5% is greedy?

Profit per employee $3,437 per employee per year or $66. per week per employee....,,,,,,

Possibly if the health care providers were as efficient at providing a product/service as Pappa Johns, healthcare would be a lot more affordable than it is today.

Yeah, I can see where that $.14 per pizza on a quarter billion pizzas or $35,000.000.00 should just be sucked up by the company.......

Bloody High-Larious.

And here's a situation:

So Papa John's add's an "ACA Surcharge" making their "$9.99" deal actually a "$10.13" deal.  Will anyone actually notice?  I know when pizza guy gets there, I'm usually in full pavlov's dog mode and ready to eat and I can't remember how much I owe the guy so I just add the tip and sign the thing and hand it back to him.  Rarely does the box touch the table before I've opened it up and taken a look or a bite of pizza. 

Maybe this whole thing is Papa John Sch......ger making a big fuss so people who are against the ACA (over 51% of Americans) take note and say "yeah, I agree with that guy....and I'm hungry...Papa John's it is!!!"

Or in my case "Beach Club with Sprouts it is!!!"

Marketting people are probably working on how to put this out the right way to the Right Wing Nut Jobs, but not to everyone else.  So...FoxNews and Breitbart, here we come!

The 2 million pizzas generate more business via advertizing.  Paying healthcare costs does not.  Not saying it's right or wrong but you cannot compare the two.

I believe this was in response to the calls to boycott Papa Johns for daring to say anything bad about Obamacare.

http://twitchy.com/2012/11/10/libs-call-for-boycott-of-papa-johns-as-ceo-anticipates-cut-in-workers-hours/
http://www.boycottpapajohns.com/
https://www.facebook.com/pages/Boycott-PAPA-Johns/238231372892925

I would like to know how many people actually work full-time at a job that pays $7.25/hour.  Unless you're single, that puts you right at the poverty level.  These people have other problems.  I think it's more realistic they will take their 30 hours at this job, plus two or more other part-time jobs.    They probably have another job already.   So, I have to wonder if we're making a mountain out of a molehill...

I also don't think that folks this close to the line will be wasting time at the clinic now that they have health insurance, for the slightest thing.  My mom, as a single parent and a secretary, absolutely would not take time from work for just a sniffle for me or my sisters.   And she had health insurance from the get go.  She worked at Mayo Clinic, the best sniffle fixers you can find!  

Also, if an employer made a statement that they would keep their full-time employees, despite having the extra expense, and would then have to raise prices a bit, it would be good marketing.  Shoot,  I already paid almost $20 for the good pizza place even though I can get Pizza Hut for almost half.   No one called it a national crisis when pizza delivery places started adding 1 or more dollars in delivery fees a few years ago!

I don't really know anything about the ACA, but it seems to me these news items about restaurants changing policies for full-time employees are a little overly dramatic.

I don't think this is get-over-it as much as we-told-you-so.

I don't care WHICH party nationalized healthcare, I'm just skeptical that the government can do anything efficiently.  That is non-partisan, IMO.  Part of that reason is they pretty much can't go out of business, when you can print and borrow more money if your program is losing money.

And the more complicated something is, the less predictable it will be, with so many moving parts.  This full time employee requirement is but one example.

Big business isn't perfect, or innocent, but I'd prefer less government, and a more competitive system for most things, including my health care.

Just curious what type of business you own/run?

How is this any different than if the cost of dough went up?  It's a cost increase, nothing more.  If people are going to blame the ACA for layoffs then they also need to blame shipping cost, etc.  So UPS can be blamed for layoffs just as much as the ACA can be.

In the end, as a SBO, I can choose to shift a new or increased cost to the consumer, to the employee or to my profit.  Either one is a business choice and I, the SBO, take responsibility for it.  Not who is in the Oval Office (D or R)