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Passing Expenses

© Drew Sheneman

Some CEOs are complaining that they will have to pass the cost of health insurance for their employees on to customers. One of the biggest complainers was John Schnatter, who claimed he would have to raise the price of each pizza by 11 to 14 cents. First of all, is that all? Second of all, Schnatter claims that he already provides health insurance to 100% of his employees, so why would his costs go up? Regardless, after customers started boycotting his pizza, he backed down. Besides, since Schnatter was a supporter and fundraiser for Mitt Romney, it is more likely that his complaints were just so much hot air. If he was really worried about costs, he could reduce them by lowering how much he pays himself.

© Matt Bors



  1. ebdoug wrote:

    Someone has to explain this to me: I thought that insurance was going to be provided by income the was our “child Health Plus” is in New York State. So if the company stops providing insurance by cutting hours, should the employee not be able to get insurance based on those 30 hours? and now if Olive Garden and Red Lobster keep their prices the same even through they no longer have the expense of health insurance, can’t another company start up with the same Italian food and same Red Lobsters at less expense? Seems to me that all goods would drop in price or face stiff competition if health insurance is removed from the workplace. WHAT AM I THINKING WRONG?

    Monday, November 26, 2012 at 7:45 am | Permalink
  2. Anonymous wrote:

    Many restaurants seem to be having problems due to the economy. Many people are loyal to restaurants they like and trust. The startup costs and issues for a restaurant are high, there is a limited supply of chefs, locations, and customers. Maybe?

    Monday, November 26, 2012 at 10:58 am | Permalink
  3. hieronymus wrote:

    support your local restaurants so that these jack-asses go out-of-business from low demand for their crap food.

    Monday, November 26, 2012 at 5:39 pm | Permalink
  4. il-08 wrote:

    How can you boycott restaurants that you would never be caught dead in? The common thread here is that Papa John’s pizza tastes like cardboard, dead lobster makes up for very low quality with overflowing plates and olive garden is an affront to all things Italian.

    Monday, November 26, 2012 at 6:43 pm | Permalink
  5. Iron Knee wrote:

    I agree Hieronymus. I can’t remember the last time I ate in a national restaurant chain of any kind (fast or otherwise). And it isn’t because I was deliberately trying. We just have an abundance of really good locally-owned restaurants.

    And IL-08, I guess if you already don’t eat there, then you can try to spread the word and get other people to eat at locally-owned restaurants.

    Monday, November 26, 2012 at 8:11 pm | Permalink
  6. hieronymus wrote:

    I’ll take Scott Van Duzer’s pizza over John Schnatter’s “pizza” any day.

    Tuesday, November 27, 2012 at 2:04 am | Permalink
  7. Nance wrote:

    IK’s comment is important. In my town, we are glutted with chain restaurants and have tons of choices…OF THOSE. The small, independent, locally-owned restaurants simply don’t flourish. There…aren’t any. I can think of a tiny breakfast/lunch diner in a very bad part of downtown. That’s it. As you get into Cleveland, there are tons, yes, but driving into the city each time you want to go out to eat, paying the parking, etc. is prohibitive. That being said, I agree: Red Lobster and Olive Garden, both of which are in my suburb and do well, are hideous.

    Tuesday, November 27, 2012 at 9:04 am | Permalink
  8. hieronymus wrote:

    the one time i actually dined at an Olive Garden, i remember noticing that it was the first time I’ve ever seen wheels on the dining chairs. let me guess…

    Tuesday, November 27, 2012 at 11:07 am | Permalink
  9. We have struck all Darden Restaurants locations off our list. Papa John’s is crap, we never ate their stuff anyway. We are going to go non-chain from now on.

    Friday, November 30, 2012 at 2:29 pm | Permalink
  10. Iron Knee wrote:

    What surprises me is that the local restaurants around here are typically less expensive than the chains and have better food. I think the reason why chain restaurants became popular was because they gave you a safe and predictable experience, and were large enough to become well branded. Not because of their food, prices, or service.

    As I said, I haven’t been deliberately avoiding chain restaurants, but I realized while writing this post that I haven’t eaten at one in a while. In fact, as far as I can remember the last time I ate at a chain restaurant was breakfast at a Black Bear Diner a year ago while on a road trip (but they are a relatively small chain).

    I think what probably happened was the internet. It is easier now to find good restaurants using websites like urbanspoon, yelp, or tripadvisor.

    I used to eat at fast food chains like Subway or restaurants like Chevy’s or Chili’s and didn’t think anything about it. But now there are much better options where I live, and they are all local. The internet helped me (and my friends) find these good local restaurants. Even when I’m traveling, rather than just find some chain that I know about, I’ll use the internet to find something good. Even though I haven’t in the past really cared whether it was local or not, it seems like most of the really good restaurants are not part of large chains. At least where I live.

    So maybe there’s hope, as more people use the internet to find places to eat.

    Friday, November 30, 2012 at 3:40 pm | Permalink