Five Guys' franchisee attacks Obamacare

The owner of 8 North Carolina outlets says health care will cost him a store's worth of profits. The growing burger chain -- which counts the president as a fan -- has distanced itself from that complaint.

By Jason Notte Mar 12, 2013 4:34PM
Credit: David Paul Morris/Bloomberg via Getty Images Caption: A Five Guys Inc. restaurant stands in Dublin, CaliforniaJust a few years back, a then-upstart Five Guys Burgers and Fries got a visit from President Barack Obama and rode the exposure to a still-burgeoning coast-to-coast burger empire.


On Monday, a Five Guys franchisee in North Carolina returned the favor by saying that, according to The Washington Examiner, the president's new health care law is forcing him to put plans for new stores on hold and may result in higher prices for burgers. Mike Ruffer, a former Marriott (MAR) executive who owns eight Five Guys restaurants in the Raleigh-Durham area, told attendees of a seminar dedicated to the new health care law and hosted by the Heritage Foundation that all the profits from one of his eight outlets would have to be dedicated to health care and that “any added costs are going to have to be passed on."


Five Guys headquarters, perhaps with the president's 2009 visit to a Five Guys in its Washington, D.C., birthplace in mind, immediately put a few peanut bags' worth of distance between itself and Ruffer.


"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. "He does not represent Five Guys on this or any other subject matter."


Restaurant owners haven't exactly checked their disdain for the new law requiring employers with more than 50 full-time workers to provide health care coverage for them or be fined $3,000 per worker. Chief executives and franchise owners for Denny's (DENN), Papa John's (PZZA), DineEquity's (DINE) Applebee's, Wendy's (WEN), Darden Restaurants (DRI), Whole Foods Market (WFM) and others have all bemoaned the new expenses and have publicly suggested that they will cut employee hours to avoid the mandate. A Denny's franchisee in Florida went so far as to suggest that customers pay a surcharge for it and deduct the amount from servers' tips.


Five Guys appears to want no part of this discussion, lest it stifle the chain's exponential growth over the last decade. Five Guys began franchising in 2002 and has already grown to more than 900 locations across the U.S.


In 2011, it came in just below $1 billion in sales at $950.6 million but added more than 182 locations to land in a spot in QSR Magazine's Top 25. Its sales increased 32.8% from 2010, according to research firm Technomic, while its $1.156 million in sales per restaurant in 2011 fell just below Burger King ($1.245 million) and topped Yum Brands' (YUM) Pizza Hut ($875,000), KFC ($940,000), Sonic (SONC $1 million) and Starbucks (SBUX $1.14 million).


Franchisees are going to talk, but upstart chains like Five Guys tend to turn down the volume if keeps customers from coming in for a double and a sack of fries.


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Tags: DramaEconomyFoodGovernmentHealth careObamacarePoliticsRestaurantsSBUX
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2048Comments
Brutus625
Mar 12, 2013 5:12PM
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Using my vast business experience and knowledge, I have a 3 step plan to create millions of new jobs and help small businesses:

1.  Create tons of new regulations and require businesses to do mountains of more paperwork.
2.  Increase labor costs by increasing the minimum wage and implementing Obamacare.
3.  Increase energy costs.

Sincerely,
Barrack Obama

Someone
Mar 12, 2013 5:03PM
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every day we hear more about the disaster forced upon us and how counter productive it is for jobs, growth and even the healthcare industry . the more we learn the worse it is.  time to kill the law and defund it. then start over, letting the people read it and then vote for it. state by state
AlwaysMeanWhatIsay
Mar 12, 2013 5:26PM
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THANK YOU AGAIN AMERICA.WHAT IN THE WORLD DID THE VOTERS THINK ABOUT WHEN THEY VOTED. AMERICA WAS TOLD THIS FROM MANY SOURCES BUT THEY LISTENED TO A SNAKE OIL SALESMAN. NOW THEY ARE GOING TO PAY THE PRICE. (I'M PAYING THAT PRICE BECAUSE OF THE ILL INFORMED, NON-THINKING AND GULLIBLE ELECTORIT BY NOT ABLE TO FIND A FULL TIME JOB) I HOPE THIS COUNTRY WILL SURVIVE UNTIL 2016 SO WE CAN DISMANTLE EVERYTHING THIS "CHARMER" HAS DONE IF THE VOTERS BEGIN TO THINK A LITTLE.
NA497
Mar 12, 2013 5:07PM
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New name can be 4 Guys, as because of Obama and the voter livestock, one guy gets laid off.
gil263
Mar 12, 2013 5:26PM
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Congress holds the purse string and can defund obamacare. I HOPE THEY DEFUND THIS IDIOTIC HEALTH CARE BILL!
Greg F 62
Mar 12, 2013 5:11PM
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Good for this guy! Everyone forgets who pays and what the costs are for government mandated policies and benefits!! There is no free lunch...literally.
ProV1
Mar 12, 2013 5:28PM
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Obama's healthcare plan will lead to more socialism. He wants to halt all business expansion and make the citizens more dependent on government entitlement programs. Some day the Dems who voted for this guy will finally realize this.
superchicken386
Mar 12, 2013 6:24PM
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Lets see.Native american indians exempt from paying for health care ,along with the poor,  and the rich have their own health ins., and federal emloyees are exempt,so whos left?And as that turncoat supreme justice ruled for it on the grounds it was a tax,that means this is nothing but a tax on the middle class and business.If its so great then why isnt it good enough for fed emploees? Oh thats right taxpayers pay for their healthcare, and its not the garbage were stuck with,
nodemorats
Mar 12, 2013 5:54PM
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The problem with obuma care is they keep adding pages and pages of new regulations every day. You left wingnuts will crap your chaps when this whole mess finally sees the light of day. Nothing good can come from a law that nasty pelousy says we have to pass so we can see what is in it.
The one......
Mar 12, 2013 5:35PM
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I wish all employers would challenge OcrapaCare! This sh*t has got to go!
Randy Holbrook
Mar 12, 2013 5:14PM
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I have eaten at 5 guys only twice. Both times I found it to be a poor value and have no desire to try it again. As for the franchisee's comments, he is up front about the costs of yet another government mandate. If Obama Care goes forward we will see lots of changes in the restraurant industry and they will not be good for the consumer.
drangel33
Mar 12, 2013 5:23PM
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Yeah, bemoan all you want.  Wait until a number of your patrons become ill. and have to find a doctor.  Well, the Federal Government just started making the largest reimbursement cuts to doctors and hospitals.  If you think waiting in an emergency room is very long now, you ain't seen nothin' yet. When the AFA (Obamacare) kicks in, If you're lucky, you just might find English-speaking personnel.  If you're luckier, you just might find a licensed Doctor.  But, considering that 20 million more individuals will now be eligible for free care (including illegal aliens), you're about to be stung unmercifully.  Look what is happening in Canada.  PRIVATE Clinics have opened for those with C.O.D.  No one likes the government dictating the prices one should pay for a product or service.  Let competition prevail.  That has always been the reason Capitalism has thrived.  Those days are about over now.  Cry all you want about the price of hamburgers.  You won't be living long enough to enjoy them.  The era of bribery/corruption is on the way.
TIDEWATER27
Mar 12, 2013 6:45PM
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One thing is for sure.  Congress made SURE that they were EXEMPT from OdumboCare.  They would have no part of it.  Congressmen, and congresswomen, want NOTHING WHATSOEVER TO DO WITH ODUMBOCARE!!  Does that not tell you something?  Even if you are an idiot, doesn't that tell you something?

olcaptk
Mar 12, 2013 5:27PM
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This could have all been avoided with the single payor option.  My grandkids just arrived from England and one of them needed a TB test, and when our daughter told him he had to see the doctor, he asked "When is he coming?"  Housecalls in England, 911 calls in America.  The sooner we go to a single payor and fund it all with a national sales tax, the better off we will ALL be and much better financially.  Why do you think they live longer for less cost in Finland, Germany, Japan, Taiwan, Australia, Sweden, Denmark, Luxemborg, Norway, France...etc. etc?  Now, we just have folks who can't afford a doctor wait for an ambulance, go to ER's and then the taxpayors pay anyway and pay ten times as much for drugs and treatment.  Get rid the health insurance industry.  They don't treat ONE SINGLE patient, but make billions on the game.  Think about it.  All those girls sitting in the dentist office are calling insurance companies all day long finding out if the insurance company covers a particular procedure and for h ow much.   An MRI costs $100 in Japan and a thousand dollars in America.  It isn't like Japanese doctors are poor either.  Dump this for profit system.   Doctors in most of Europe get free education and the people they attract actually want to help people. They have medical universities. We should be having medical academies just like Annapolis and West Point and the Air Force Academy cranking out skilled medical people and doing away with the giant middleman...insuranc​e companies. 
stairstepper
Mar 12, 2013 5:42PM
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obama care like obama phones,worthless.
Smaller Government
Mar 12, 2013 6:57PM
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My "Affordable Health Care" payment went up 20% this year alone.  Thanks Obama....

 

spud52
Mar 12, 2013 5:41PM
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obamacare, if read, will scare the daylights out of you.  Take the money and run!

Al (kayseetch)
Mar 12, 2013 5:55PM
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Solution is simple ...... create new corporation every time you are reaching 45 employees; thereby eliminating the healthcare cost ..... wall street has been doing it forever..... just follow their lead
Randy Holbrook
Mar 12, 2013 5:32PM
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I was lucky and had an employer who provided health care insurance. The reality was they could afford it because they were able to pass the cost on to the taxpayer because they made most of there money on government contracts. The average business has little margin to pay for health insurance and still be able to compete in a free market. I don't believe health care should be tied to your job. If the insurance is tied to your job then your hung out to dry when job changes occur and they will occur. We don't have our employers purchase our car insurance for us why do we expect them to buy health insurance.

The only reason Health insurance is tied to our employment is because of the government in the first place. During the war they put a freeze on wages. Employers who needed special skills could not pay higher wages to attract those skills so the government let them provide health coverage as an added incentive. Our system has been screwed up ever since. Just another unintended consequence of government meddling.  

straightstock
Mar 12, 2013 5:17PM
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i have eaten at a local five guys and the prices suggest that there must be penny or two falling to the bottom line. over time, the restaurant business has transferred a goodly portion of their labor costs to the customer. they like it like that. before the advent of obamacare, my small businesses healthcare costs (health insurance) has gone up about 11% per year, unabated. our employees have made claims that on average are less than 55% of premiums. so there is certainly no incentive to be fair and honest. obamacare will not do much other than spawn a new government agency. nevertheless, i do not think it will make or break five guys. they will just add it to the price of a burger
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