McDonald’s Franchisees Face Big Health-Reform Tab

Crain’s Chicago Business:

McDonald’s Corp.‘s franchisees fear the coming health care overhaul will take a big bite out of their profits and force them to either raise prices or spend less on their restaurants.

Franchisees estimate the new federal health care bill, which requires businesses to provide health insurance for employees or pay penalties, could cost them as much as $55,000 per restaurant annually.

That’s a significant hit for franchisees, whose restaurants generate about $2.4 million in revenue and $300,000 in pre-tax profit, on average. And it could hamper the Oak Brook company’s campaign to persuade franchisees to remodel thousands of locations in the next five years. With their profits reduced, the restaurant owners are likely to raise prices and resist McDonald’s push to offer promotions and discounts to boost sales.

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