So much for that McChicken only costing a dollar….
Papa John: I must raise pizza prices if ‘Obamacare’ survives – LINK
Cook Medical Scraps Plans to Expand Production in USA Because of ObamaCare Tax: Looking to Go Overseas – LINK
The Affordable Care Act could cost McDonald’s and its franchisees more than $400 million a year in additional health-care expenses, Chief Financial Officer Peter Bensen said on Monday.
McDonald’s estimates that each restaurant will incur between $10,000 and $30,000 in added annual costs, Bensen said in response to an analyst’s question on a conference call to discuss the fast-food giant’s second-quarter results, according to an unedited transcript of the call provided by FactSet. There are about 14,000 McDonald’s restaurants in the U.S., meaning McDonald’s expects the total cost to the company and its franchisees to be in the range of $140 million to $420 million. McDonald’s owns about 11% of its U.S. restaurants, while the rest are franchised.
Bensen added that the wide range is due to a number of variables, including the number of employees per restaurant and how many are full-time workers. Spokeswomen for McDonald’s added that the final cost will also depend on what percentage of its eligible employees elect to accept health insurance from the chain, as well as any changes McDonald’s might make to its health-care plan. McDonald’s worked with its franchisees to analyze and estimate the potential costs, the spokeswomen said, which could be mitigated by higher menu prices.
Companies have moved ahead with planning for economic and other consequences of the law since a Supreme Court ruling last month upheld the vast majority of President Barack Obama’s controversial health-care law, even as congressional Republicans and that party’s presidential nominee, Mitt Romney, vow to overturn it.
“Now that the Supreme Court has ruled,” Bensen said, “[we are] increasing our conversations and disclosures with franchisees” to educate them about the potential changes and how to minimize their impact.
To put the cost per restaurant into perspective, Bensen noted on the call that the commodity-costs increases it experienced in 2011, for example, added more than $30,000 in overhead to each restaurant that year.