Health Care Reform Likely to take a Bite Out of Restaurant Profits

Restaurant owners around the country will be watching closely as the health care reform bill goes into effect during the coming years. Some are already reacting, making plans to sell off stores and dropping expansion plans to avoid the cost of providing full-time staffers with health insurance. In a recent survey of McDonald’s franchisees, analyst Mark Kalinowski of Janney Montgomery Scott got a glimpse of how small operators see the coming change — namely, they expect health insurance requirements to cost between $50,000 and $55,000 per store annually.

“A lot of franchisees are small-business people and they don’t necessarily make a lot of money to begin with,” Kalinowski said in an interview Friday. “When something comes along that impacts the business for the worse, in some cases it may make sense to figure out an exit strategy.”.

Respondents also said they’re likely to raise prices, pare down staff below the 50-employee mark and cut perks in other areas, including paid vacation and profit sharing..