Shocking: Implementation of ObamaCare is a job killer for franchise expansion

Via Fox Business (bolded emphasis added by me):

Dan Drennen says his franchisees are sitting on their hands. According to the general manager of Visiting Angels Living Assistance Services, multi-unit franchisees are withholding expansion in the face of the Affordable Care Act’s employer mandate.


Drennen said single owner deals continue to come in, as Visiting Angels has 437 franchise locations, and near 420 individual franchisees. But for many of those nearing the 50-employee level, where the employer mandate kicks in and health-care is a requirement or a $2,000 annual penalty per employee is due, they’re staying put.

“Everyone is in a holding pattern,” he said. “In the last year, we have between 30 and 40 [multi-franchise] deals that have been held off, because it’s not a perfectly clear picture.”

Paul Mangiamele, CEO of Bennigan’s, said he has several multi-store agreements with franchisees that have been shelved since the ACA became law. Bennigan’s franchises cost $35,000 in fees to open per location, Mangiamele said. If someone signs a five- store deal with the franchise, Bennigan’s charges $35,000 for the first store, and a $10,000 deposit upfront for the remaining four locations.

So the expansion slowdown not only halts job growth under the Bennigan’s name, but withholds the company from collecting about $100,000 in fees.

“This very mandate will stifle the growth that the administration touts it will help,” Mangiamele said. “It’s puzzling how this makes sense for anyone in D.C. These are jobs that would impact high unemployment.”


Don Fox, CEO of Firehouse of America, a restaurant franchise, said he plans to bring his franchisees together next month for a health-care summit. His multi-location franchisees, those with five or more restaurants, will discuss how the law impacts their businesses.

“If [a franchisee] is in a five-store agreement, for our brand, opening restaurant number five means the mandate will apply. In essence, what I have done is put my entire investment for restaurant number five toward offering paying for health care. So why open it?” he said.

These are troublesome realities that CEOs, small business owners, and potential franchisees in the REAL world have to contemplate in the face of the implementation of the mammoth legislation known as the ACA aka “ObamaCare.” Unlike the centralized-government agenda-driven idiots at Big Labor headquarters, popular “progressive” websites like Think Progress, and far left think tanks who think it’s their job to threaten and “punish” these businesses by way of pushing for boycotts, business-savvy CEOs, small biz owners, & potential franchisees are actually running the numbers and see that ObamaCare is going to impact their bottom line and as a result, they have to make adjustments. For some potential franchisees, the risk is too big to take so they hold off – and that translates into (duh) ZERO jobs. For those who did take the risk, if they don’t make these adjustments – like cutting back hours so they don’t fall under the ObamaCare rule that they have to offer health care coverage, it won’t just be hours lost – but jobs lost.

Making matters worse are the absolute liberal fools who think boycotting businesses will actually “force” their hands into keeping hours like they are without layoffs and cut backs in hours and benefits. WRONG. Not only do owners typically NOT comply with liberal threats of this nature, but – carried out to its logical conclusion – boycotts only end up HURTING the very employees liberals claim to want to “help.” NOTE TO CLUELESS LIBERALS: A drop in customers over a period of time typically means businesses eventually will have to cut back on the number of employees. Hint hint.

Anyway, all of this was entirely predictable and in fact was predicted by many of us well in advance of the eventual passage of ObamaCare. To those of you whose hours and / or jobs might be on the line as a result of this, and who VOTED for Obama, don’t say we didn’t tell ya so. Because we did.

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