Denny’s, Papa John’s, walk back criticism of Obamacare

Customers eat a free Grand Slam breakfast at a Denny's restaurant in Sunnyvale, Calif., Tuesday, Feb. 3, 2009.
Customers eat a free Grand Slam breakfast at a Denny's restaurant in Sunnyvale, Calif., Tuesday, Feb. 3, 2009.
AP Photo/Paul Sakuma

Conservative restauranteurs are discovering that retaliation against the Affordable Care Act is bad for business.

Papa John’s CEO John Schnatter took to the Huffington Post to clarify his earlier suggestion that some restaurants might need to increase prices and cut employee hours in order to deal with the cost of Obamacare.

“Many in the media reported that I said Papa John’s is going to close stores and cut jobs because of Obamacare,” he wrote in a blog post. “I never said that. The fact is we are going to open over hundreds of stores this year and next and increase employment by over 5,000 jobs worldwide. And, we have no plans to cut team hours as a result of the Affordable Care Act.”

Though the Affordable Care Act is still somewhat divisive, the trend in public polling is towards broad acceptance of the law. Last week, the Kaiser Family Foundation reported that support for the health care law’s repeal had hit an all-time low of 33%.

Regardless of how many Americans felt about the law when it was first passed, making them pay extra in return seems to be a public relations loser.

Schnatter isn’t the only one feeling the heat. Just days after Denny’s franchise owner John Metz said he would add a 5% Obamacare surcharge to all his customers’ checks, Denny’s CEO John Miller publicly distanced himself from the decision. ”We recognize his right to speak on issues, but registered our disappointment that his comments have been interpreted as the company’s position,” he told the Huffington Post.

Given the public backlash against Metz, Miller has good reason to be disappointed. Denny’s franchise owner Abdo Mouannes told the Huffington Post that traffic at his seven Florida locations dropped “overnight” after Metz’s comments went viral. His restaurants received so many angry phone calls that one of his managers wanted to unplug the phone, Mouannes said to the Post.

“People didn’t like what they heard and were saying they wouldn’t support Denny’s,” Mouannes said. “But we have nothing to do with that decision. I am not a fan of that [5% surcharge] idea.”