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Corporate Citizens Discover Bad-Mouthing Policy is Bad for Business

Posted by Warm Southern Breeze on Sunday, December 9, 2012

Papa John’s, Applebee’s And Others Pay Huge Price For Anti-Obamacare Politicking

Op/Ed
12/04/2012 @ 5:18PM

by Rick Ungar, Contributor

Writing from the left on politics and policy.

47th Annual Academy Of Country Music Awards - Arrivals

LAS VEGAS, NV – APRIL 01: Papa Johns Pizza Founder John Schnatter arrives at the 47th Annual Academy Of Country Music Awards held at the MGM Grand Garden Arena on April 1, 2012 in Las Vegas, Nevada. (Photo by Jason Merritt/Getty Images)

It turns out that being a good corporate citizen is as important to selling pizzas as the thinness of the crust or the quality of the cheese.

If you don’t believe it, just ask Papa John CEO, John Schnatter.

As covered—and criticized—in this column in great detail, Mr. Schnatter decided to mix his politics with his pepperoni when suggesting that he would be cutting the work hours for Papa John employees in order to bring them below the 30 hour per week threshold that would require Schnatter to provide his employees with healthcare benefits.

It turns out, the pizza eating public did not approve.

Indeed, so serious was the reaction that Schnatter was forced to publish an op-ed piece where he sought to convince us that he never really intended to cut back worker hours but had simply been speculating on what he might do in response to the legislation.

According to YouGov BrandIndex,  a leading marketing survey that measures brand perception in the marketplace (called “Buzz”), Papa John’s had good reason for concern as the pizza chain’s brand identity has plummeted from a high of 32 on election day, to a remarkably low score of 4 among adults who have eaten at causal dining restaurants during the past month.

Ouch.

Papa John is not alone in his anti-Obamacare misery.

Fast food server, Applebee’s, possessed a healthy Buzz score of 35 before Zane Terkel, CEO of one of the company’s largest franchisees, appeared on television to complain about the law and to announce that he would not be building more restaurants or hiring any more workers in response to his objections to Obamacare.

Applebee’s “pre-Terkel” Buzz score of 35 now sits at a pathetic 5.

I don’t imagine Mr. Terkel will be getting many Christmas cards this year from other Applebee’s franchise owners.

While these corporate complainers have sought to explain away the hit they are experiencing at the hands of the public’s perception, one such company is facing the music straight on. Darden Restaurants, Inc.— owner of Olive Garden, Red Lobster and LongHorn Steakhouse—has lowered its profit projections for the quarter ending November 25th, acknowledging that its bad numbers are the result of poorly performing  promotions, Superstorm Sandy and…wait for it…the poor publicity it engendered by its decision to test out a plan to cut back on healthcare costs by putting more workers on part-time schedules.

Check out these rather epic declines:

Hopefully, other businesses seeking to avoid their responsibilities under the healthcare law—such as Walmart who intends to cut back employee hours in the effort to push workers onto Medicaid rolls rather than take responsibility for their employees’ health care—will get the message.

http://www.forbes.com/sites/rickungar/2012/12/04/papa-johns-applebees-and-others-pay-huge-price-for-anti-obamacare-politicking/

About the author:

Rick Ungar Contributor

“As the title of the page suggests, I am Forbes’ official ‘token lefty’. However, writing from the ‘left of center’ should not be confused with writing for the left as I often annoy progressives just as much as I upset conservative thinkers. In addition to the pages of Forbes.com, you can find me every Saturday morning on your TV arguing with my more conservative colleagues on “Forbes on Fox” on the Fox News Network and at various other times during the week serving as a liberal talking head on other Fox News and Fox Business Network shows.”

The author is a Forbes contributor. The opinions expressed are those of the writer.

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One Response to “Corporate Citizens Discover Bad-Mouthing Policy is Bad for Business”

  1. Papa Johns said

    Yeah.. John Schnatter definitely didn’t make any friends with his comments.. that’s for sure.

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