Time to boycott Papa John's Pizza?
Back in August, Papa John's CEO John Schnattner got in trouble when he told shareholders he'd have to raise pizza prices by 11-14 cents in order to cover the costs of Obamacare. Well, competition won't let him pass the costs on to consumers like that, so he's come up with a new plan: cut the hours of his workers to under 30 hours/week so he is not required to cover them. (Cheesy details below the squiggle.)
You see, when costs go up you only have two choices: either screw the consumer or screw the employees. But, in case you haven't noticed, it's your employees and your consumers who are responsible for 100% of your profits. Without either one, you earn...nothing!
So how is Papa John's doing in terms of profits? Hmmm...2nd quarter 2012 looks like this:
July 31, 2012Profits are up 29.8%...and so we have to screw employees once Obamacare kicks in. Here's a thought: accept a 20% growth rate in profits. Think that will cover insurance premiums for those employees that make and sell your pizzas to those consumers who love you?
Papa John's Announces Second Quarter 2012 Results
EPS Increased 29.8% on Strong Comparable Sales of 5.7% for North America and 6.1% for International
LOUISVILLE, Ky.--(BUSINESS WIRE)-- Papa John's International, Inc. (NASDAQ: PZZA) today announced financial results for the three and six months ended June 24, 2012.
Second quarter earnings per diluted share of $0.61 in 2012, or an increase of 29.8% over earnings per diluted share of $0.47 in 2011.
"We had an outstanding second quarter as our system continued its strong sales momentum with significant comparable sales increases for our North American and International operations," said Papa John's founder, chairman, and chief executive officer, John Schnatter. "We continue to win with consumers, as we recently were recognized with Brand of the Year honors in the Pizza Chain Category of the 2012 Harris Poll EquiTrend Study, and we achieved the highest rating ever by an individual brand in the Limited Service Restaurant Category of the 2012 American Customer Satisfaction Index (ACSI)."
Don't want to touch profits? That would be un-American socialism, you say? Well, how about taking it out of your advertising budget? You know, that part where you are giving away 2 million free pizzas during football season and spending a fortune on tv to advertise it. How about if you go with your original idea and only give away 1 million pizzas. How much health insurance can you buy for that?
You charge your franchise owners 7% of sales for advertising costs. How about if you charged them 6% and then reserved 1% for health care for your staff? Think that might cover it?
So enough of the bullshit. Obamacare is a new expense. Get over it and provide the damn insurance. Maybe your employees will be a little healthier and miss less work. Maybe insuring them will prove to be a better long-term strategy than cutting hours, increasing employee turnover, and having to hire more part-timers to pick up the slack.
You do have options, Mr. Schnattner. Do the right thing. If not, we can cut you off the same way we cut off Chick-fil-A. Are you listening?