Wednesday, August 8, 2012

Papa Johns Price Increase And Obamacare

Papa Johns Price Increase And Obamacare - Papa John's CEO says Obama's Affordable Care Act dubbed Obamacare, is causing a price increase at his popular pizza delivery and carryout business. John Schnatter said health care reform upheld by the U.S. Supreme Court will cause him to pass on higher costs to consumers.

Tuesday, the Huffington Post published a story about the CEO and founder of the third largest pizza franchise in America.

Papa John's, like other businesses, is forced to raise prices to offset the cost of providing healthcare insurance to every employee under Obama's law. With over 16,500 workers at the pizza franchise, the cost to cover all employees is a big expense.

Obamacare mandates that any business with more than 50 employees must provide affordable health insurance to workers without regard to pre-existing conditions. If not, a business operator is subject to penalties for not following the law.

Schnatter was recently quoted in an interview as saying this about the "Affordable Care Act" and its impact on his business model at Papa John's: "We're not supportive of Obamacare, like most businesses in our industry. But our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare."

Prices will rise at Papa John's pizza delivery and carryout locations to about $0.15 to $0.20 cents per order, according to industry experts.

While businesses can merely stop health insurance coverage and pay a fine to the government, it will be hurt in the long run as workers depart, in search of companies that follow the new health care law.
Another option is to cut staff below the 50-person threshold. However, with larger companies John Schnatter's pizza business, it is likely not feasible. Will Papa John's price increases cause you to defect and look for cheaper options in pizza?

Papa Johns Price Increase And Obamacare Rating: 4.5 Diposkan Oleh: Arm Aritn

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