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Washington Examiner: “Five Guys: Obamacare will boost burger prices”

Paul Bedard | March 11, 2013 | 4:22 pm

6094004182_7e32c5d79c“Any added costs are going to have to be passed on,” said Mike Ruffer, a Five Guys franchise holder with eight of the popular restaurants in the Raleigh-Durham, N.C. area. He will need all the profits from at least one of his eight outlets just to cover his estimated added $60,000-a year in new Obamacare costs.

What’s more, he’s iced plans to build another three restaurants until after the administration explains the exact rules and penalties employers will face. The law’s plan to have those available March 1 has been pushed back to October.

“I’m kind of in a holding pattern,” said Ruffer, a former Marriott executive who added that many franchise owners are in a similar situation.

Ruffer was the star witness at a Monday Heritage Foundation seminar on the impact Obamacare will have on small businesses. He is typical of many: Because he has enough full time employees to activate the law, he faces either coughing up the money to provide health insurance or paying a fine of up to $3,000 per worker.

Ruffer initially thought he would escape the law because he created each restaurant as its own company. But the law doesn’t recognize that distinction, so now he’s trying to determine if he can fire enough workers, or cut enough hours, to slide out of the grasp of Obamacare.

He said that “scorched earth plan,” however, would hurt his restaurants, so Ruffer is likely to either pay the fine or buy insurance. But spreading the costs over his basic menu of fries, drinks, burgers and hot dogs, could scare off customers, he worries. He said that the recent spike in gas prices cut into his profits since fewer people were stopping at his restaurants.

And the health care law isn’t only going to hit Ruffer. He’s quizzed his workers to ask if they understand that they will be fined if they don’t get health insurance. Just one of 20 workers were aware of the $95 tax penalty that rises to $695 by 2016.

Accessed 3/19/13, Washington Examiner

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