Nearly 500 restaurateurs and association officials stormed Capitol Hill recently, in an effort to persuade lawmakers that the economy and unfavorable government policies were delivering a powerful one-two punch to the industry’s ability to create jobs.
Attendees from 44 states participating in the National Restaurant Association’s 25th annual Public Affairs Conference lobbied scores of congressmen and senators on the impact of such far-reaching issues as health-care and debit card swipe-fee reform, immigration, restaurant depreciation, and access to credit.
Cheryl Bachelder, president of Popeyes Louisiana Kitchen and chief executive of AFC Enterprises, voiced fears that franchisee creativity and entrepreneurship would be choked off under the current economic and political environment.
“I have deep concerns about whether this climate will enable us to continue to create jobs,” Bachelder said.
She cited both the lack of small-business lending and President Barack Obama’s health-care reform as posing particular challenges for the industry.
“When you look at health care, the math is really daunting,” she said. “Until we figure that out, it’s going to be a black cloud over the business.”
To address the costs associated with the health-care law, Bachelder said it is likely that many operators will have to employ a part-time labor force and job sharing practices “so that we can remain a vital, healthy, entrepreneurial industry.”
Participants also listened as lawmakers addressed them about key political issues facing businesses and the nation. Rep. Greg Walden, R-Ore., addressed the current budget battles raging in Washington during the event.
“We know things have to change,” he told attendees. “This borrowing and spending can’t be sustained.”
Walden told restaurateurs that to get job creation back on track the health-care law must be repealed.
“We repealed the 1099 [IRS tax-reporting requirement], which would have quintupled the number of filings you have to make,” he said. “And if you’re doing paperwork, you’re not creating jobs.”
He added that Congress “will take health care apart piece by piece.”
Rep. Kristi Noem, R-S.D., called small businesses the nation’s job creators, but said they are being stifled by certain government policies.
“[The new freshman class in Congress] is doing everything in our power to draw back the regulations that will cost you money,” said Noem, whose family owns a restaurant in South Dakota.
In addition to calling for an end to the estate tax, she said: “I am very happy to say that we repealed Obamacare in the House, which is bad for small business.”
Rep. Charlie Gonzalez, D-Texas, encouraged attendees to speak frankly when they headed up to Capitol Hill to lobby their lawmakers on the second day of the conference.
“Talk to your policymakers,” he said. “Tell them what it’s like to be on the ground, what it’s like to run a business.”
Scott DeFife, the NRA’s executive vice president of policy and government affairs, also advised attendees to “show [lawmakers] what it takes to run a business.”
In particular, he said, the Patient Protection and Affordable Care Act, or PPACA, continues to be a major issue for the industry, and operators should tell elected officials that it poses “real adversity” to the health of their businesses.
DeFife advised attendees to convey the fact to their lawmakers that restaurants are low-margin businesses — 4 percent to 6 percent before taxes — and the employer mandates in the law pose real problems to the bottom line. He also said operators should urge the redefinition of what the PPACA considers a full-time worker — anyone working 30 hours a week or more.
“It should be 40 hours, not 30,” DeFife said.
He also said compliance timelines for qualifying for health care should be 120 days, not 90 as the current law states.
Xavier Teixido, owner of Harry’s Savoy Grill in Wilmington, Del., also said he worries about health care.
“I question how [we are] going to deal with it as an industry and as individual operators,” Teixido said. “How do we do it in a way that is sustainable and affordable in the long term?
“I love certain aspects of the health-care law — the portability, the fact that it excludes pre-existing conditions, the ability to cover more people in the family,” he said. “But how do we do it so that it’s fair and still affordable?”
Health care also was a key topic when state delegations met with lawmakers and their aides on the hill. Rick Sampson, president and chief executive of the New York State Restaurant Association, together with other NYSRA members, discussed operators’ concerns with Steve Pfrang, the legislative director for Rep. Tom Reed, R-N.Y.
Donald O’Neill, past chairman of the NYSRA board, called the PPACA’s 30-hour threshold for a full-time worker an “unfair burden” for restaurateurs.
While health care was top of mind at the event, operators also had other things to discuss. Paul Graham, whose family owns two Gallagher’s Eatery and Pub restaurants in Kalamazoo and Paw Paw, Mich., enumerated a number of challenges confronting his business.
“Getting people just to spend money is challenging,” he said. “We have a poor economy, inflationary issues, a high rate of unemployment in Michigan. And just when things start to look better, something happens in Washington to stop it.
“We’re on the bubble every week,” Graham said. “Business is touch and go.”
Craig Heath, owner of BoomTown Kitchen + Tap in Brighton, Mich., said rising gas prices were having a negative impact on his business.
“In the past few days prices rose from $3.75 a gallon to $3.99, and I saw an immediate drop off in traffic,” he said. “I guess people go to the pump, fill up, see it comes to $80 and say, ‘I’m going home.’”
He said the restaurant is doing whatever it can to generate traffic.
“We’re doing everything to put butts in seats,” he said. “Half off burgers and draught beer. Kids eat for free on Sundays. Ten dollars off a bottle of wine on Wednesdays.
“Having a great concept and great foodservice [is] no longer enough,” Heath said.
Contact Paul Frumkin at paul.frumkin@penton.com .
