Aug 08, 2012 03:51 PM EDT
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Obamacare 2014: Companies Feel Forced To provide workers with Health Insurance

By Donovan Jackson
Papa Johns
(Photo : Reuters) Papa John is not in favor of Obamacare

It seems as if Obamacare will increase the cost of fast food in 2014 due to companies now being forced to offer a health plan to its employers.

Papa John's CEO John Schnatter is not happy with Obamacare as he claims the cost of pizzas made by his company will see an increase in the price. The price hike is said to only affect cost for the Louisville, KY chains. Prices will go up 11 to 14 cent per pizza or 15 to 20 cents per order from a corporate basis.

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Schnatter said Papa John's, the nation's third-largest pizza chain, will be forced to offer health care coverage for its 16,500 employees or pay a penalty fine.

"We're not supportive of Obamacare, like most businesses in our industry. But our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare," he said. "If Obamacare is in fact not repealed, we will find tactics to shallow out any Obamacare costs and core strategies to pass that cost onto consumers in order to protect our shareholders' best interests."

Other fast food chains will soon be forced to comply with the same rules as Papa John's by 2014.

McDonald's said Obamacare will cost each of its 14,000 franchise locations anywhere between $10,000 and $30,000, BusinessWeek reported. In addition to McDonald's, Subway, Burger King and Dunkin' Donuts filed complaints on Capitol Hill regarding future extra costs because of the health care law.

Earlier this month, the company said its quarterly revenue rose 9 percent to $318.6 million from $293.5 million last year. Analysts had expected revenue of $311.1 million. Meanwhile, revenue at restaurants open at least one year rose 5.7 percent in North America and 6.1 percent internationally. This metric is a key indicator of a company's health, because it excludes results from recently opened or closed locations.

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