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Restaurants Ponder How To Charge Patrons For Obamacare

Eateries like Franny’s in New York City can’t afford Obamacare regulations without huge price hikes.


Have you recently thought your restaurant checks seem a little higher than you expected? Some of us throw down our cards without so much as a second glance, expecting to have only been charged for what we consumed, but you may want to start looking a little more closely.

By now most people have heard that many popular restaurants in New York City have abolished tipping, and raised their menu prices by up to 40 percent, which now gives them the ability to pay everyone on staff more and provide full-time health coverage. Some restaurants tried a different tactic, including Brooklyn pizzeria Franny’s. They announced that checks would soon include a line item that reads “3% surcharge for Obamacare,” then quickly reversed that decision after complaints. Now they will raise all their prices, despite their concerns this means “putting $22 pizza on the menu.”

A manager at Franny’s compared the line-item to a fuel surcharge. When gas prices go up, delivery companies will often charge their clients a percentage of their order to offset the extra expenditure. Citing Obamacare’s inflated health-insurance premiums and requirement that eateries like Franny’s insure their full-time staff, restaurants have asked their guests to pay.

Don’t Tax Me, Bro

Restaurants like Franny’s operate with razor-thin margins, which is so often the reason that the food and beverage workforce does not have employee-sponsored health care. This a very transparent way of letting the public know how the new health-care law affects a small operation like theirs.

This a very transparent way of letting the public know how the new health-care law affects a small operation like theirs.

The controversy over pointing out this surcharge on every check seems to be less about the added cost but more about the potential political statement being made. Franny’s had been applauded by left-leaning millennials for finding an innovative way to get health care while many other restaurants haven’t. I see it as a bit of a statement about how a business cannot stay afloat if it is required to pay for expensive health coverage for their staff.

Other charges could follow suit. In hotels now you see a list of fees on your room service bill that seem to mean nothing—delivery fee, service charge, an entertainment tax. A $15 club sandwich turns into a $40 item on your final bill faster than you can make sense of it.

If everyone rallies around the idea of a business-imposed health-care surcharge, it presents an opportunity for businesses to find other ways to charge people more without driving them away. Having an affordable neighborhood eatery in a big city is quickly becoming a thing of the past.