Executives of Yum! Brands, the parent of Taco Bell and KFC, are less pessimistic than McDonald's franchisees about the likely impact of the omnibus health-care reform law (see item below). Indeed, said CEO David Novak, the initial impact will likely be a $6 million tax savings on the medical benefits that are provided to Yum retirees.
Longer term, Novak told investors during a conference call, franchisees will be stung by an additional cost of $10,000 to $15,000 per unit. But that burden won't be dropped on them until 2014.
"We are going to work with them to mitigate the cost," Novak said. "WE have plenty of time, I think, to deal with the issue."
Showing posts with label healthcare reform. Show all posts
Showing posts with label healthcare reform. Show all posts
Friday, April 16, 2010
Thursday, April 15, 2010
Quick calculations of health bill's impact leaves some restaurateurs feeling ill
If interpreting the new healthcare law is a point of comparison, Talmudic scholars have a cakewalk. But while the experts infer the mega-bill’s precise impact on restaurants and other small businesses, a few down-and-dirty assessments are arising from the field. The tip-offs are the screams of horror and the obscenity-laced vows to find another profession.
McDonald’s franchisees, for instance, were asked in a just-completed survey to estimate the new law’s cost to their businesses. The assessments provided by 16 of the 30 participants averaged more than $55,000 per restaurant annually, with a median response of $50,000. The other 14 demurred at providing a figure, but indicated they expect a permanent increase in costs.
“This implies that, in effect, this new law could wipe out 15%-20% of a franchised McDonald’s store’s annual profits,” noted Mark Kalinowski, the Janney Montgomery Scott restaurant analyst who periodically canvasses a sampling of franchisees on their near-term business expectations.
“We will increase prices across the board to pay for this increased cost. We cannot continue to have the bottom line shrink,” one respondent anonymously responded.
Restaurateurs flying the flags of other chains may be just a pessimistic, Kalinowski has suggested. “Over the last several months, we have spoken with dozens of U.S. franchisees in a variety of systems, and not a single one of them has mentioned in a favorable way the healthcare legislation that was recently made into law,” he wrote in an earlier report to clients.
Kalinowski himself is clearly not a fan of the Obama Administration and its policies, as indicated by postings on his Facebook page. He’s characterized the President as “an empty suit.”
McDonald’s franchisees, for instance, were asked in a just-completed survey to estimate the new law’s cost to their businesses. The assessments provided by 16 of the 30 participants averaged more than $55,000 per restaurant annually, with a median response of $50,000. The other 14 demurred at providing a figure, but indicated they expect a permanent increase in costs.
“This implies that, in effect, this new law could wipe out 15%-20% of a franchised McDonald’s store’s annual profits,” noted Mark Kalinowski, the Janney Montgomery Scott restaurant analyst who periodically canvasses a sampling of franchisees on their near-term business expectations.
“We will increase prices across the board to pay for this increased cost. We cannot continue to have the bottom line shrink,” one respondent anonymously responded.
Restaurateurs flying the flags of other chains may be just a pessimistic, Kalinowski has suggested. “Over the last several months, we have spoken with dozens of U.S. franchisees in a variety of systems, and not a single one of them has mentioned in a favorable way the healthcare legislation that was recently made into law,” he wrote in an earlier report to clients.
Kalinowski himself is clearly not a fan of the Obama Administration and its policies, as indicated by postings on his Facebook page. He’s characterized the President as “an empty suit.”
Thursday, September 10, 2009
What I learned today about the restaurant industry
The day wasn’t rife with ah-ha moments, but there were a few hmm-worthy points. Here, boiled down to snack-sized portions, is what I learned about the restaurant industry during Back to School Week:
The road ahead in the green movement may really be the road ahead. By now, even primitive tribes of the Guatemalan jungle have heard about Burger King’s test of an electricity-generating drive-thru speed bump. In essence, the device moves up and down as cars roll over it, generating kinetic energy in the process. The power could be sufficient to power a nightlight in the manager’s office.
The more promising route to restaurant economy could be the technology that’s being developed with a new $100,000 grant from the U.S. Department of Energy. The agency wants to see if an upstart company can develop a solar panel tough enough to serve as a road surface. If it can be, restaurant parking lots, access roads and drive-thru lanes could become energy generators. Throw in a few speed-bump power plants and you could get enough juice to light Las Vegas.
What’s our diagnosis of the healthcare situation? Quick, what’s the restaurant industry’s position on healthcare reform? If you can peg it, please grab a megaphone and blare it to the rank and file. They’ve largely been left in silence by the trade’s usual town criers on public affairs—a puzzling muteness, given the issue’s financial import to the nation’s second largest private-sector employer.
Hopefully we’re just not hearing a voice that’s ringing loud and clear at the negotiations table. But it certainly would be calming to know what our representatives think of the proposals that are currently being considered. How alarmed, if at all, should an average owner-operator or chain executive be? And what arguments are being put forth to protect the industry’s interests? It sure would be nice to know what’s happening on our behalf up on Capitol Hill. And something is, right?
Restaurant tables are being put to unusual use. Apparently there’s a lot of sex taking place in restaurants’ under-filled dining rooms these days. And we’re talking about the Full Monty sort, with partners and all.
Basketball coach Rick Pitino has drawn enough media glare for his professed dalliance with a woman in a Louisville, Ky., in 2003 (she alleges the coach raped her, an accusation dismissed by authorities and a witness to the scene). And that was six years ago. Even if it was atop a table, it probably should be skipped here.
But there’s no shortage of other examples. Two weeks ago, for instance, a restaurant in Woodstock, Ga., was raided because the place allegedly doubled as the headquarters for a prostitution ring. Be grateful there isn’t a Zagat guide for the town or we’d be reading snippets like “not all the moaning is for the food,” or “the real place to have it your way.”
At the other extreme are the places that tsk-tsk such base carnality right on their signage. They’ve incorporated the phrase “better than sex” right in their names, be it Better Than Sex Cake Café in Chandler, Ariz., or the Better than Sex Dessert Café in Key West, Fla.
Then there’s the new blood (sausage) lust. At Nation’s Restaurant News, we had set criteria to determine what qualifies as a trend: Three examples of anything. By that standard, appreciation of blood sausage is a veritable craze.
You’ll find it on the menu of such hot new places as DBGB, Daniel Boulud’s downscale café on New York City’s Bowery, as well as higher end places like Chicago’s Avec, where the blood sausage figures into a pasta dish.
The tubes of congealed blood, usually described in a much more appetizing way than that, are showing up in particular in their Latino versions (Puerto Rican, or morcilla; Argentinean; Cuban; etc.).
It’s not yet made its way down to the casual chains, but we’re probably only months away from a Bloomin’ Bleeder appetizer.
The road ahead in the green movement may really be the road ahead. By now, even primitive tribes of the Guatemalan jungle have heard about Burger King’s test of an electricity-generating drive-thru speed bump. In essence, the device moves up and down as cars roll over it, generating kinetic energy in the process. The power could be sufficient to power a nightlight in the manager’s office.
The more promising route to restaurant economy could be the technology that’s being developed with a new $100,000 grant from the U.S. Department of Energy. The agency wants to see if an upstart company can develop a solar panel tough enough to serve as a road surface. If it can be, restaurant parking lots, access roads and drive-thru lanes could become energy generators. Throw in a few speed-bump power plants and you could get enough juice to light Las Vegas.
What’s our diagnosis of the healthcare situation? Quick, what’s the restaurant industry’s position on healthcare reform? If you can peg it, please grab a megaphone and blare it to the rank and file. They’ve largely been left in silence by the trade’s usual town criers on public affairs—a puzzling muteness, given the issue’s financial import to the nation’s second largest private-sector employer.
Hopefully we’re just not hearing a voice that’s ringing loud and clear at the negotiations table. But it certainly would be calming to know what our representatives think of the proposals that are currently being considered. How alarmed, if at all, should an average owner-operator or chain executive be? And what arguments are being put forth to protect the industry’s interests? It sure would be nice to know what’s happening on our behalf up on Capitol Hill. And something is, right?
Restaurant tables are being put to unusual use. Apparently there’s a lot of sex taking place in restaurants’ under-filled dining rooms these days. And we’re talking about the Full Monty sort, with partners and all.
Basketball coach Rick Pitino has drawn enough media glare for his professed dalliance with a woman in a Louisville, Ky., in 2003 (she alleges the coach raped her, an accusation dismissed by authorities and a witness to the scene). And that was six years ago. Even if it was atop a table, it probably should be skipped here.
But there’s no shortage of other examples. Two weeks ago, for instance, a restaurant in Woodstock, Ga., was raided because the place allegedly doubled as the headquarters for a prostitution ring. Be grateful there isn’t a Zagat guide for the town or we’d be reading snippets like “not all the moaning is for the food,” or “the real place to have it your way.”
At the other extreme are the places that tsk-tsk such base carnality right on their signage. They’ve incorporated the phrase “better than sex” right in their names, be it Better Than Sex Cake Café in Chandler, Ariz., or the Better than Sex Dessert Café in Key West, Fla.
Then there’s the new blood (sausage) lust. At Nation’s Restaurant News, we had set criteria to determine what qualifies as a trend: Three examples of anything. By that standard, appreciation of blood sausage is a veritable craze.
You’ll find it on the menu of such hot new places as DBGB, Daniel Boulud’s downscale café on New York City’s Bowery, as well as higher end places like Chicago’s Avec, where the blood sausage figures into a pasta dish.
The tubes of congealed blood, usually described in a much more appetizing way than that, are showing up in particular in their Latino versions (Puerto Rican, or morcilla; Argentinean; Cuban; etc.).
It’s not yet made its way down to the casual chains, but we’re probably only months away from a Bloomin’ Bleeder appetizer.
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