Operators: Business is tough, 'touch and go'Operators: Business is tough, 'touch and go'

Paul Frumkin

As nearly 500 restaurateurs and industry association officials gathered in Washington, D.C., to kick off the National Restaurant Association’s annual Public Affairs Conference, participants voiced anxieties about the powerful political and economic forces weighing down on the industry.

Cheryl Bachelder, president of Popeyes Louisiana Kitchen and chief executive of parent company AFC Enterprises Inc., worried that franchisee creativity and entrepreneurship would be stifled under the current 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 Obama’s health care reform as posing particular challenges to the foodservice 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.”

EARLIER:

Rep. Kristi Noem (R-S.D.) told attendees of the NRA’s 25th Public Affairs event that small businesses are the nation’s job creators, but they are being damaged by business-unfriendly 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In addition to calling for an end to the estate tax, she said: “I am very happy to say that we repealed Obamacare in the House, which is bad for small business. And we repealed the 1099 provision.”

Xavier Teixido, owner of Harry’s Savoy Grill in Wilmington, Del., also said he worries about health care. “I question how are we 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 [enact this reform bill] so that is fair and still affordable?”

While health care was top of mind at the opening day of the event, operators also voiced concerns about other, more macro-economic issues. Paul Graham, whose family owns two Gallagher’s Eatery and Pub restaurants in Kalamazoo and Pawpaw, Mich., enumerated a raft 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 and 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.

“The days of having a great concept and great foodservice are no longer enough,” Heath said.

Rep. Charlie Gonzalez, (D-Texas) encouraged attendees to talk candidly 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.”

Contact Paul Frumkin at [email protected].