John Metz, Denny’s CEO to cut Hours and Charge 5 Percent Obamacare Surcharge

Denny's Obamacare Surcharge

With the CEO of Papa John’s recently going public and saying that he will cut employees hours to avoid paying the high costs of insurance due to Obamacare, other business owners seem to be playing “follow the leader” and saying they plan on doing the same.  One CEO is going one step further in hopes of being able to handle the costs and penalties that are associated with the Affordable Care Act.

John Metz, CEO franchise owner of Denny’s restaurants and five Hurricane Grill and Wings, has decided to add a five percent surcharge to the bills of its’ customers. Knowing he could end up facing a backlash from customers, Metz feels he has no choice and is also sending a message to customers in the hopes that they will contact elected officials and tell them to put a stop to Obamacare.

While many voters celebrated when Obama won his reelection campaign bid, many business owners were not happy as they saw the writing on the wall. They knew Obamacare was soon to become a reality; a costly reality that they would have to find the money to fund health insurance to their employees working 40 or more hours a week. However, one option was not to provide the health insurance to their employees but to instead reduce employee’s hours or simply laying them off.

Applebees, for example, has announced they are planning massive layoffs as a result of Obama winning a second term and because of Obamacare. Metz has looked at his options and in order to deal with the impending health care costs that are associated with Obama’s Affordable Care Act, not only must he take away hours from his employees but also add a five percent surcharge to the bills of customers.

Metz has tried to be open to both his employees and customers saying that he has no other alternative but to pass costs on to his customers. He said that, “because of Obamacare, we are cutting hours to under 30 hours, effective immediately.” He added that, “Everyone’s looking for a way to not have to provide insurance for their employees. It’s essentially a huge tax on all of us business people.”

Metz went on further by telling the Huffington Post that, “I think it’s a terrible thing. It’s ridiculous that the maximum hours we can give people are twenty-eight hours a week instead of forty. It’s going to force my employees to go out and get a second job.”

The average check at a Denny’s restaurant is $9, Metz said, meaning if the surcharge was implemented, 45 would be added to the bill. The average bill at a Hurricane Grill & Wings location is $14.50, so the surcharge amount would be 72 cents.

Starting in December, Metz will hold meetings at all his Denny’s restaurants to talk about the surcharge to his employees and tell them “that because of Obamacare, we are going to be cutting front-of-the-house employees to under 30 hours, effective immediately.” He hopes that the meetings in the future will not alienate his employees but inspire them. He said, “What we’re going to ask them to do is to speak to their elected officials, to try to convey what this means in terms of their jobs and their livelihoods,” Metz said.

Though he wants to cover his employees with insurance, his current coverage has costs of $5,000 to $6,000 annually for full-time employees. Metz said, “Obviously, I’d love to cover all our employees under that insurance. But to pay $5,000 per employee would cost us $175,000 per restaurant, and unfortunately, most of our restaurants don’t make $175,000 a year. I can’t afford it.”

Though Metz feels that Obamacare is more harmful than beneficial, he may not realize the positive effects of choosing to have employer-based health care. There have been studies to support that Obamacare ultimately decreases the costs of health care for small businesses. Not only that, by providing insurance coverage for employees generally leads to higher retention rates, a more competitive hiring market and more satisfied employees.

If Metz follows through with his plan on a five percent surcharge for customers, a simple option is to go to another restaurant; at least for now. With other restaurants contemplating on reducing staff hours to deal with Obamacare, such as the Olive Garden and Red Lobster, it may be only a matter of time before restaurants adopt Metz’s idea for a five percent surcharge that all customers will have to pay.

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9 Comments on "John Metz, Denny’s CEO to cut Hours and Charge 5 Percent Obamacare Surcharge"

  1. I usually take my wife to dennys once or twice a weekend.
    But with this idiots statements, never will we ever set foot in to dennys restaurants again, or papa johns.
    Good riddance, we will just eat somewhere else.
    Adios butt heads.

  2. What is the difference in a business owner raising prices to cover costs such as increased fuel, food, liability insurance, taxes and other g & a costs, and raising prices to cover Obamacare costs? They’re all costs of doing business, even the new Obamacare taxes, and whether its in the form of a surcharge or just generally increased prices, one way or another, its going to trickle down to the customer or the employees. If a business owner doesn’t recoup the cost of operating a business by covering these costs in the price of its goods or services, it will eventually go out of business and no one will have a job.

    If it were possible to actually force these business owners to eat these taxes, they would simply either go bankrupt or go try to find a regular job. What’s the point of owning and running a business if you can’t make a living at it?

    The comments you people have made against Mr. Metz, who by the way isn’t the CEO of Dennys, demonstrate you don’t have a clue about how business and the economy works, but I bet you know what movie is #1 at the box office or what the top selling hiphop artist is at the moment. It is a leftist, utopian fantasy to think you can endlessly increase taxes and regulations on some, to give free handouts to others, and no one has to pay for it. And, no matter what you do, it always trickles down to the lowest common denominator, and that my friend, is you and I and the rest of us individual consumers. It is the law of nature and it is the law of economics and you cannot change this fact.

  3. I eat there!!! Good idea pass the debt on to patrons that is what his stupid obama care crap has done, wake up you stupid demorat people !!!!!

  4. If this catches on It will go down in history as being the best thing for Mom and Pa business owners . Its either this or cut work hours to thirty or less. So who wins now.

  5. This man has lost his mind. I have loved Denny’s for years but I refuse to eat at a place that uses his employees as pawns. What a sore looser. Any business that does this will have to face consequences from an alert public who will not support cry babies. We’ll see what happens to the bottom line then.

  6. ceo mertz. i,too will no longer frequent your restaurant. what not making enough money to fill those pockets. your such a sore loser you have to pass your anger out on your employees. they all need to walk. iwould love to see you close your doors. i am going to picket there for thanksgiving.

  7. I find your decision unconscionable. It seems you would want healthier employees who could take advantage of the new regulations. Please know you will get a taste of your own medicine. (Pun intended). I will never step foot in one of your restaurants and I will certainly convey to patrons of the Hurricane Grill restaurant your utter disregard for your employees.
    Actions have consequences. Do the right thing.
    N. Sims

  8. Kathryn Williams | November 15, 2012 at 8:37 pm | Reply

    Really Mr. CEO of Denny’s. Shame, shame, on you. Your bottom line means more to u than your people and your customer, correct? Then u will understand why those of us who used to support Denny’s by enjoying your restaurant, will no longer enjoy anything about Denny’s. Sorry for u and sorry for your employees. We will spread the word. Social Media is not your friend Mr. Mertz! The Republicans found out the hard way; so will u.
    Thanks listening. Good luck in the future with your franchise; you’ll need it. This is going viral!

  9. Dear Mr. Metz,

    I WILL NEVER spend another penny in your restaurants. Hopefully, your employees can find a better job somewhere else. I put you in a class with Rupert Murdoch – two assholes.


    Richard Cox

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