Restaurants Say Paying For Obamacare Will 'Threaten Their Very Business'

The Supreme Court upheld Obamacare today, and the restaurant business is "troubled" over the decision because they doubt they'll be able to afford the new regulations.
The restaurant industry is notoriously low-margin to begin with, and having to pay for employees' healthcare will be a "burden," the National Restaurant Association said today.

Here's what CEO Dawn Sweeney had to say in a release:

“Today’s ruling by the Supreme Court is troubling for restaurant operators and business owners across the country. We encourage Congress to continue efforts to repeal the law, since the Court’s decision leaves the employer requirements in place, provisions which impact restaurant operators’ ability to grow and create jobs.

“This unworkable law cannot stand as is. We need reform that addresses the increasing costs our members are faced with each year. Restaurant owners are looking for solutions that will allow them to provide better health care coverage options for their team members, but they cannot be saddled with excessive costs and regulatory burdens that threaten their very business. We ask members of Congress to take action that helps the restaurant industry continue to help create jobs and grow the national economy.”

What I find so strange is that the restaurant industry never really pay high hourly wage to waitstaff as they are getting paid by the customers as they receive gratuities. Since the diners pay tips to the waitstaff, they have less burden in that area.

The restaurant industry is also notoriously known to not pay any benefits to their workers. Very few restaurants pay health insurance, sick days, 401K or vacation time.Once again they keep their employee cost low by avoiding to pay any benefits.

Now they are concerned because of Obamacare. God forbid they have to give a little bit to their employees. For so long they could avoid giving anything, now that they have to give a little they are concerned.

They probably have never heard of "YOU HAVE TO GIVE TO RECEIVE". No wonder why there are so many restaurants that go out of business. No wonder why the rate of attrition is so high in the restaurant industry. So many people get into the restaurant business but have no passion for it. They have no clue on how to run a restaurant. They do not understand is that it's not about food, it's about a dining experience. 

Restaurants will NEVER compete on food. There are too many great restaurants, too many cuisines and people can dine anywhere they want. What restaurants DON'T GET, is that they compete ON SERVICE. People go out to a restaurant for the food the first time, but the second time for the service.

This business is about HOW HOSPITABLE YOU ARE TO OTHERS.

Richie Jackson, CEO of the Texas Restaurant Association, explained to the Dallas Business Journal why restaurants are so deeply impacted by Obamacare. The cost of health care "closely equates" to the bottom line of a restaurant.

“We have a very high labor cost and very low profit margin and very little to cover that health care cost with that.

“What it really means is that menu pricing will have to go up. The concern there is, in the struggling economy and when people are seeking value to their dollar because you don’t have to go out and eat, raised prices will reduce the number of meals served. It has that kind of spiraling effect to continue to erode profitability.”

Yeah right, you pay high labor? How much do you think it cost Microsoft, Facebook, Google or other tech companies when they hire a programmer? $8 or 10 per hour like you currently pay a cook or server to whom you do not offer any benefit? 

Just imagine how much more it cost the tech companies when they hire an employee? And you complain? Sure you know why you complain? Because those people who work in the restaurant industry do not know how to run a business. That is why so many fail in the restaurant industry.

And Mr Richie Jackson do you know how you can go up in pricing for your menu??? I give you the solution: ALL YOU HAVE TO DO IS TO RAISE THE SERVICE STANDARD OF A RESTAURANT. It is obvious that if your service is bad, you cannot justify an increase in menu pricing. If your offer is bad, your pricing will be too high. The only way you can ask for a higher price for yor food, is IF YOU RAISE YOUR SERVICE STANDARD, WHICH IS HOW YOU JUSTIFY YOUR PRICING.

Why do you think Apple, SONY, Disney, Microsoft, Rolls Royce, Ferrari, Mercedes, Nordstrom, Neiman Marcus or any other amazing company can justify their high price? They offer a fantastic service, and amazing products. And people don't mind paying high price if they have a better value for their money. And they do. YOU GET WHAT YOU PAY FOR. Americans love to get great value for their dollar. And more than EVER, they seek the best value for their dollar.

Obviously the restaurant industry doesn't get it.They believe that they are in the commodity market where they compete on price. If they could only understand that they compete on service, they would be able to ask for higher price.

So it appears that the restaurant industry is annoyed because they may have to give a little to their employees. It could be the first time in centuries that some restaurants may finally have to give a little bit to their workers who have been working so hard for nothing.

Last thought. The restaurant industry is notoriously known to cheat its workers, by not paying overtime, stealing tips of the servers to pay managers,or other. Does that mean that more are going to cheat their workers? Could be great news for lawyers as they will be able to sue more restaurants. Maybe one day only the best restaurant companies will be in existence. That would not be a bad thing. After all only the good ones will be left, those who have passion for the hospitality industry. Will get rid of all the bad apples.

I have a word for the restaurant industry; Take care of your employees, they'll take care of your customers and the money will take care of itself. If you want to succeed, follow the footsteps of other successful American companies and you will go much farther than you've ever imagined.

One thing for you, you need to hire talents. You must surround yourself with people who are passionate about the hospitality industry, and not a bunch of managers who act as cops in the dining room, who treats employees like if they are a bunch of dummies or kids. And by the way, who hired those employees that all day long are treated as kids and dummies?

How can you think of being successful is if you refuse to pay for talent? It doesn't add up, neither mathematically, nor if you apply the laws of nature. It's a losing equation. Nobody can say when, but we can certainly say that YOU WILL END UP CLOSING THE DOORS IN THE FUTURE. That is a certainty. The Ritz Carlton won't. Disney won't. But you will. That's because they think very differently than you do. They have a vision, and you don't.

Your management team should have diploma in hospitality and a management degree. Stop hiring just anyone to work at your business. Start hiring people with skills. Do you honestly think that the tech companies in Silicon Valley, just hire anyone? Why do you think they are more profitable than you? Why do you think they pay benefits? Because they have a different mentality than cheap people. Because they believe that if they can take care of their employees, they will in turn take care of business.

It amazes me to see restaurants hiring just ANYONE, ABSOLUTELY ANYONE. Anybody in the street could come and they would hire them. How foolish! I would never hire anyone to serve my customers. I would hire like high tech companies do. People that are highly skilled, because the service industry needs highly skilled people as well.

No wonder you struggle, and your profit margin is so low And you complain about paying health care to your employees. Stop nagging and start thinking outside the box, so you can contribute a little bit more to this society. Start doing something good to others. And if you think you can't pay healthcare, then you will never be able to do it.

What ever the mind of man can conceive and believe, it can achieve.  Napoleon Hill

  The future belongs to those who believe in the beauty of their dreams. Eleanor Roosevelt

START BELIEVING!