Denny's CEO Smacks Down Franchise Owner Over Talk of Obamacare Surcharge

A blog about business and economics.
Nov. 20 2012 10:52 AM

Denny's CEO Smacks Down Franchise Owner Over Talk of Obamacare Surcharge

84610890
EMERYVILLE, CA - FEBRUARY 03: Denny's customers wait in line to get a free breakfast February 3, 2009 in Emeryville, California.

Photo by Justin Sullivan/Getty Images

I did a column on chain restaurant owners' absurd whining about Obamacare with special attention to John Metz who owns a bunch of Denny's franchises. Metz said he was going to start placing a special Obamacare surcharge on customers' checks, and advised people that if they didn't like it they could just tip their servers less. Today the news comes that he got a stern talking-to from the Denny's CEO and is backing down on the plan.

Good for the CEO. But, again, this is just good business sense. As I wrote in the column, evidence from San Francisco suggests we should be very suspicious of firms pleading poverty as they charge surcharges. The city adopted pioneering universal health care legislation that, like Obamacare, imposed higher costs on some classes of employers. Many of them responded with special health care surcharges. Upon investigation, much of this surcharge money just ended up in the pockets of business owners, as with any other price increase.

Advertisement

Businesses, obviously, are free to raise prices if they think that's the best strategy. And if they think the best way to market a 5 percent price increase is to call it an "Obamacare surcharge" then why not? But my strong suspicion is that the CEO is right about this and that's actually a terrible way to market a 5 percent price increase. The basic business proposition at any restaurant is the idea that we're giving you a dining experience that's more valuable to you than the money we're asking for. It's a good deal, come eat our tasty food. Whining about the fact that your servers now have health insurance is neither here nor there in terms of the value proposition on offer, and is only going to serve to alienate people by making you look like an asshole.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

Politics

The Democrats’ War at Home

How can the president’s party defend itself from the president’s foreign policy blunders?

An Iranian Woman Was Sentenced to Death for Killing Her Alleged Rapist. Can Activists Save Her?

Piper Kerman on Why She Dressed Like a Hitchcock Heroine for Her Prison Sentencing

Windows 8 Was So Bad That Microsoft Will Skip Straight to Windows 10

We Need to Talk: A Terrible Name for a Good Women’s Sports Show

Politics

Cringing. Ducking. Mumbling.

How GOP candidates react whenever someone brings up reproductive rights or gay marriage.

Music

How Even an Old Hipster Can Age Gracefully

On their new albums, Leonard Cohen, Robert Plant, and Loudon Wainwright III show three ways.

The U.S. Has a New Problem in Syria: The Moderate Rebels Feel Like We’ve Betrayed Them

Homeland Is Good Again! For Now, at Least.

Behold
Oct. 1 2014 11:48 AM An Up-Close Look at the U.S.–Mexico Border
  News & Politics
The World
Oct. 1 2014 12:20 PM Don’t Expect Hong Kong’s Protests to Spread to the Mainland
  Business
Moneybox
Oct. 1 2014 2:16 PM Wall Street Tackles Chat Services, Shies Away From Diversity Issues 
  Life
The Eye
Oct. 1 2014 1:04 PM An Architectural Crusade Against the Tyranny of Straight Lines
  Double X
The XX Factor
Oct. 1 2014 2:08 PM We Need to Talk: Terrible Name, Good Show
  Slate Plus
Political Gabfest
Oct. 1 2014 1:53 PM Slate Superfest East How to get your tickets before anyone else.
  Arts
Brow Beat
Oct. 1 2014 2:24 PM The New Interstellar Trailer Is the Most Exciting Yet
  Technology
Future Tense
Oct. 1 2014 2:26 PM The Apple Graveyard Leave a flower for a dead Apple product.
  Health & Science
Science
Oct. 1 2014 2:36 PM Climate Science Is Settled Enough The Wall Street Journal’s fresh face of climate inaction.
  Sports
Sports Nut
Sept. 30 2014 5:54 PM Goodbye, Tough Guy It’s time for Michigan to fire its toughness-obsessed coach, Brady Hoke.