Five Guys Franchise Owner Says Obamacare Will Increase Burger Prices

Robert Jonathan

A Five Guys franchise owner says he may have to pass along price increases on burgers, fries, and hotdogs to his customers when Obamacare fully kicks in because insurance premiums will be the equivalent of "supersized."

Mike Ruffer, who owns eight Five Guys restaurants and employees 150 people, describes himself as being in the bullseye of the so-called Affordable Care Act. He also believes that it will be until July at the earliest when insurance companies will be able to tell their business clients how much healthcare premiums will cost going forward. The government is in the process of cranking out pages and pages of complicated Obamacare-related regulations that will be challenging for most employers and individuals to plan for and process, let alone implement.

In various surveys, Five Guys has become America's favorite burger chain, but things are going to get rougher for Ruffer under Obamacare.

Ruffer said today that "any added costs are going to have to be passed on" to the consumer. Ruff estimates that it will take the entire profit of one of his restaurants to pay for Obamacare. He is also holding off on opening three new Five Guys outlets until the Obamacare regulations are fully fleshed out. Under the law's mandates, since covered employers (i.e, those with 50 or more persons on the payroll) must either provide health insurance to eligible employees or pay the government a $3,000 fine for each one, he may be forced to transition many of his full-time hardworking burger cooks to part time status if the premiums become too onerous and unaffordable. He surmised that additional healthcare insurance costs under Obamacare could total $60,000 annually for his business.

Because of this regulatory dilemma, the law is providing a disincentive for maximizing his "trained, experienced, and dependable" workers if he has to trim their hours to part time, Ruff asserted.

Employers facing the same dilemma in the service sector, in retail, or in the restaurant business and in other sectors are dropping healthcare coverage altogether or offloading full-time employees into a part-time status (less than 30 hours a week) so they don't qualify for existing coverage. The Congressional Budget Office has estimated that eight million workers will lose their healthcare insurance under Obamacare.

Irrespective of the need to hire more employees, some firms are purposely keeping headcount below 50 workers to avoid the law's provisions altogether. This is not good news for anyone -- and there are millions -- looking for a job.

Other firms, particularly in the fast-food industry, are raising menu prices (or claim they will) as an Obamacare surcharge. In this environment, many politically connected unions and corporations have sought and received waivers from the law's provisions, despite vocally supporting the law's passage during the contentious debate in Congress.

Whether you think large corporate employers, or smaller ones like a Five Guys franchise owner, or even self-employed solo entrepreneurs should have to accept significantly higher insurance costs as a matter of fairness, ultimately the employee and the consumer will bear the financial burden. In class warfare, the primary "casualties" are middle income workers and not those at the high end of the income scale.