Papa John’s CEO Slices Into Obamacare

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Many U.S. companies, CEOs and their allies in Washington, D.C., have been warning since the end of June that the Supreme Court’s upholding of most of Obamacare would impact their financial health. And they indicated that they wouldn’t stand by and watch the diminishment of their bottom lines because of it.

Now, the head of one of America’s biggest pizza chains, Papa John’s, has dropped the other shoe: Directly because of the requirements of Obamacare once the full law takes effect, according to the Huffington Post, Papa John’s customers will have to pay 11 to 14 cents more per pizza, or 15 to 20 cents more per order, said John Schnatter.

Papa John’s has taken on a higher profile over the last few years, including its buzz-worthy Coin Toss Promotion during the last Super Bowl. And its ascendance has included a very public role in the chain’s TV commercials for Schnatter. So he’s not exactly trying to maintain a low profile. But Schnatter’s direct shot at the employer-carried costs of Obamacare is sure to be noticed.[more]

Because of the Obamacare requirement that companies of more than 50 employees provide affordable health insurance, the third-largest pizza takeout and delivery chain in the country will have to offer health-care coverage to more of its 16,500 total employees — or pay a penalty to the federal government.

Some Papa John’s franchisees also fear more than just the threat of a few extra nickels on the price of a pizza. Obamacare may be operating directly at cross-purposes with the administration’s expressed desire to boost American jobs at a time of persistent high unemployment.

“I have two options,” Judy Nichols, a Papa John’s franchise owner in Texas, told Legal Newsline. “I can stop offering coverage and pay the $2,000 fine” per employee, “or I could keep my number of staff under 50 so the mandate doesn’t apply.” With the extra taxes, she said, “Obamacare is making me think about cutting jobs instead.”

Schnatter also happens to be an avowed supporter of Mitt Romney, hosting a fundraiser for him in May. If his guy doesn’t turn Obama out of office in November and, with a Republican congress, start rolling back Obamacare, the best that Schnatter may be able to hope for is that the new health-care law might hurt his competitors even more than Papa John’s.

“Our business model and unit economics,” Schnatter argued, “are about as ideal as you can get for a food company to absorb Obamacare.”

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