Papa John's Price Increase Blamed on Obamacare
Obamacare has been blamed for many things, but now the founder of one of the largest pizza chains in the country is saying people will have to pay more for a slice just so he can afford to cover the company's employees.
Papa John's Founder, Chairman and CEO John H. Schnatter, explained in a conference call with reporters that in order to pay for Obamacare's mandate, franchisees will have to increase the price of a pizza 11 cents to 14 cents per pizza.
"We're not supportive of Obamacare like most businesses in our industry," Schnatter said. "But our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare."
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Schnatter went on to state that the added cost on the corporate side of the business would increase Papa Jon's price per pizza by as much as 20 cents.
"Let's say fuel goes up-- which it does from time to time-- and we have to raise delivery charges … We don't like raising delivery charges, but the price of fuel is out of our control as is Obamacare. So if Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs. And of course strategies to pass that cost onto consumers in order to protect our shareholder's best interest," Schnatter said.
Since the additional cost will be felt most sternly by franchisees around the country, they will be hard-pressed to open additional stores and even keep employees at existing ones.
Judy Nichols, a Papa John's Franchisee, is worried that Obamacare will have a negative impact on her business.
"I have two options, I can stop offering coverage and pay the $2,000 fine, or I could keep my number of staff under 50 so the mandate doesn't apply. Obamacare is making me think about cutting jobs instead," according to LegalNewsline.com.
