ObamaCare Calorie Count Mandate Causing Headaches for Chain Restaurants
Chain restaurants and small businesses are up in arms over an ObamaCare provision requiring calorie counts to be placed on menus. The clause, which was buried in the 10,000-page Affordable Care Act, now has many critics warning of red tape and questioning how the federal government is going to enforce it.
Here's more background from a Forbes report earlier this month on the new mandate:
The calorie label clause, buried deep within the ACA’s 10,000 pages, seems harmless enough at first glance. Each restaurant chain with over 20 locations is required to display the calorie content of each food and drink item it serves on signs and printed menus–with vending machine distributors subjected to the same rules. But the regulation also covers “similar retail food establishments,” a clause vague enough to give FDA regulators sweeping power to determine who does and doesn’t have to comply.
FDA Commissioner Margaret Hamburg admitted that she “actually thought [calorie labeling] would be one of the more straightforward tasks…but little did I know how complicated it would be.” Hamburg’s concerns are hardly unfounded, but it’s small business owners and franchisees—not FDA bureaucrats—that will feel the most pain under the new law.
Although the law is designed to target corporate fast-food giants, in practice it will largely affect individual franchises that effectively operate as independent small businesses. For example, over 80 percent of McDonald’s locations are owned and operated by franchisees. Each of these franchisees will now be tasked with complying with the mandate–paying for new signage, removing profit-generating advertisements to make room for the calorie data, updating menus every time recipies change, and accommodating inspectors.
Moreover, the regulation itself is so poorly constructed that it presents unforeseen hurdles for franchisees. Pizzas, sandwiches, and burritos, among other common fast-food meals, can be custom-ordered in hundreds of combinations, and the law arguably requires restaurants to provide customers with calorie data for each. It’s also unclear whether non-traditional food retailers—for example, bookstore cafes, hotel minibars, and food trucks—will be subject to the labeling requirements. Furthermore, it’s unclear what penalties restaurateurs will face if they inadvertently fail to comply.
Peter Doocy reported this afternoon on The Real Story from a Domino's in Virginia. He said that Domino's executives are concerned with the added costs of having to place the calorie numbers at all locations. Doocy pointed out that the eatery has so many possible topping combinations for pizza orders that they may try to comply by listing calorie ranges.
A Domino's spokeswoman said many of its locations are owned by independent franchisees, essentially small business owners who run one or maybe a few area restaurants. She said the costs to those small businesses are going to add up when a recipe changes and then the menu signage needs to be adjusted.
Domino's argues that 90 percent of its customers never actually set foot in the store when they order a pie. So the company is hoping that posting the calorie counts online, as it has done for 13 years, will count as compliance within the eyes of the FDA.
A bipartisan group of lawmakers is on the company's side. The FDA has not said when the regulations will go into effect or what it will do if a restaurant cannot afford to comply.
Check out the report above.