Franchisors warn Obamacare will halve profits

[CuteOldGuy]

Free healthcare for all? Not bloody likely.

From the article:

The International Franchise Association held a convention in Washington this week where most of the Radio Shack, Dunkin Donuts, Curves and other franchisers were grumbling about new federal regulations, especially the impact of Obamacare.

Most, said Atlanta Taco Bell and Kentucky Fried Chicken franchiser David Barr, presumed that the reports about how hard Obamacare will hit them were overblown. "They had their head in the sand," he told Secrets.

That is until he pulled out his powerpoint showing how funding Obamacare will cut his--and likely their--profits in half overnight. With simple math the small business folks understood, he spelled out that their only choice is to slash employee hours so they aren't eligible for company-paid health care or stop offering insurance and pay the $2,000 per employee fine.

Barr has 23 stores with 421 employees, 109 of whom are full-time. Of those, he provides 30 with health insurance. Barr said he pays 81 percent of their Blue Cross Blue Shield policy, or $4,073 of $5,028 for individuals, more for families, for a total bill of $129,000 a year. Employees pay $995.

Under Obamacare, however, he will have to provide health insurance for all 109 full-time workers, a cost of $444,000, or two and half times more than his current costs. That $315,000 increase is equal to just over half his annual profit, after expenses, or 1.5 percent of sales. As a result, he said, "I'm not paying $444,000."

Providing no insurance would result in a federal fine of $158,000, $29,000 more than he now spends but the lowest cost possible under the Obamacare law. So he now views that as his cap and he'll either cut worker hours or replace them with machines to get his costs down or dump them on the public health exchange and pay the fine. "Every business has a way to eliminate jobs," he said, "but that's not good for them or me."

But that's not all. His experience tells him that most low-wage workers he would have to cover under Obamacare won't take it because their $995 share is too high, meaning those the program was set up for won't see any benefit. And those who do will because they have major health issues, likely resulting in higher premiums to him.

I guess now that we've passed, we're beginning to see what's in it.

http://washingtonexaminer.com/franch...0#.UFKj1I2PV8F

[joe bloe]

It's all going to be moot after Romney wins and the Republicans take back the Senate. Obamacare is going the way of the Dodo bird.

[gnadfly]

Without giving out too much personal information, there's got to be small business owners on this board who have similar issues. Anybody care to share actually experiences?

From the information from the provided article, I thought those fastfood franchises made more money than that. Am I reading this correctly, 23 stores and a profit of $650K? Yeah I know the guy may be lying.

[Laz]

Based on what I have been told by people who own good franchises and my own experience at a crappy franchise you should not expect the owners to be making massive profits. Places like Subway do not generate large profits per location. Many franchise owners do not make large profits. That is why it is so frustrating when idiots talk about "rich" business owners. They take a lot of risk, work hard and often make average incomes. Business owners get paid last and only if there is profit.

[WTF]

Originally Posted by gnadfly

From the information from the provided article, I thought those fastfood franchises made more money than that. Am I reading this correctly, 23 stores and a profit of $650K? Yeah I know the guy may be lying.

I used to have one of the mentioned franchises , he should make that with less than 10 stores. Not sure if he is lying or cooking the books!

[Guest123018-4]

Over 10,000 pages of new government regulations since Obama took office.

[TexTushHog]

I own teo small businesses and i pay every penny of the health insurance premium for ALL my employees. Heaven forbid that the Taco Bell motherfucker actually pay to insure all his employees like I do instead of being a free rider and having their health care paid for by my premiums and my taxes. Breaks my fuckin' heart!! Cheap bastard. It's assholes like him that cause my premiums to be as high as they are. He gets no sympathy from me. And $2,000 is basically two months premium for one employee for me.