Papa John’s CEO John Schnatter is in trouble with the Left because, like several business owners since the re-election of the Man Who Would Be King, he has said he must reduce employee hours and possibly lay off workers to deal with the costs of Obamacare and the increasing number of regulations coming out of the Obama Administration.
The Left’s knee-jerk response has been to call for a boycott because Schnatter is wealthy and therefore he should just absorb any increase costs. Or the other analysis floating around the leftist blogs and places like Forbes is that Obamacare would only mean an increase of 14 cents per pizza, therefore Schnatter is just being evil, conservative and political.
Schnatter has said Obamacare could cost up to $8 million per year. The Left’s argument goes that $8 million is just a “drop in the bucket” for a company with total operating expenses of $1.131 billion last year.
A little analysis of the numbers published by Forbes, however, reveals a slightly different picture.
Papa John’s had total revenue of $1.218 billion last year, according to Forbes. That means a total profit of $87 million. Sounds pretty good, right?
According to Forbes, Papa John’s has more than 4,000 stores worldwide. Divide that $87 million by 4,000 and you get a per-store average profit of only $21,750.
Now, assuming Obamacare only applies to U.S. stores, then if we knew Papa John’s total U.S. stores (which Forbes doesn’t mention), we should be able to figure out per-store additional cost to U.S. franchisees.
Just for the sake of argument, let’s guess that half the franchises are in the U.S. Let’s also assume the upper estimate of $8 million by Schnatter is correct, then that would be an additional $4,000 cost per store on average, bringing average per-store profit annually down to $17,750.
I’m not familiar with all the ins and outs of owning a franchise, but I assume that $17,750 profit gets divided between Papa Schnatter, shareholders and the actual franchise owner.
That’s not enough money to feed a family, and that’s why Obamacare hurts small businesses and the middle class.
That’s what the Left doesn’t get. And that’s why re-electing Obama is going to kill this country.