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by
Matt Vespa

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August 12, 2013 - 3:51 pm

Yes, not even pizza is safe from the crosshairs of Obamacare.  The Obama administration’s massive federal power grab has the National Restaurant Association (NRA) – and the American Pizza Community (APC) – feeling something of buyer’s remorse for their part in lobbying for Section 4205, which is an onerous regulation that calls for restaurant chains with more than twenty locations to label their menus with nutritional information.  For example, it’s going to cost each Domino’s location around $5,000 a year.  There are 5,000 locations. You do the math.  It’s also sucked in convenience and grocery stores into this maelstrom of government idiocy.

I had the chance to speak with American Pizza Community representative Jenny Fouracre-Petko, who works for Domino’s, to discuss the details of the third most onerous regulation in 2010, according to the Office of Management and Budget.

In all, the Affordable Care Act will cost us $2.7 trillion dollars in the first decade, with roughly 80 million man-hours spent to comply with all of the regulations.  The House Ways and Means Committee puts those figures into some perspective.

So, what can be done in 79,229,503 hours?

  1. The Empire State building, which took 7 million man-hours to build, could be constructed 11 times.
  2. The Curiosity Lander could travel from Earth to Mars 13,048 times.
  3. Halley’s comet, seen from Earth once every 76 years, could be spotted 119 times.

Screen Shot 2013-08-12 at 5.15.30 PM

Let’s get back to Domino’s.  Liz Thatcher of the Competitive Enterprise Institute wrote last July that:

Domino’s CEO J. Patrick Doyle report[ed] that there are 34 million ways to order a pizza at his chain, and as a result some menu items would have calorie ranges as wide as 2,000. Also, for most customers, pizza is a shared meal, so nutritional value by the slice would be more useful than the nutritional value of an entire pizza, which is what the new rule would require Domino’s to provide. Doyle calculated that menu labeling could cost each Domino’s restaurant $1,600 to $4,700 annually.

Yet, what is Section 4205?  Jenny Fouracre-Petko gave a detailed history of the regulations beginnings – and its faults.

This was part of the PPACA. And it was a piece of legislation that requires that – essentially chain restaurants – restaurants with more than twenty units nationwide put calories on their menus and menu boards…And it’s overriding a bunch of local and state regulations that required such menu labeling on menus and menu boards that were all very disparate. No two regulations really matched as far as what their requirements were – for instance, in California, you could do a poster, or in some places you could label by the slice.  In some places, we had to label pizza by the whole pizza.  So, this federal legislation was pre-empting a lot of local regulations that were out there that didn’t match.  So if you were a national restaurant chain, it was very difficult to kind of keep up with these… [sic inaudible] So, the national legislation pre-empts all those laws, which is great.  The problem for the pizza industry is that – the law was created with sort of a traditional McDonald’s or Olive Garden-serving restaurant format – and the restaurant industry is pretty diverse.

 We have a lot of different formats and restaurants.  For pizza delivery, like Dominos, Papa Johns, and a lot of Pizza Huts – a lot of the delivery/carry-out primary pizza restaurants – there was a lot of specifics in the rules that they were written by the FDA that were sort of a one-size fits all solution that just didn’t work for the pizza communities.

So, for instance, if Domino’s, which is where I work, we’re part of the American pizza community, the majority of our customers don’t walk into our stores, or ordering at out stores.  They’re ordering remotely. They’re calling in their orders. They’re ordering online.  It’s very common in the pizza industry for people to only go into the store to carry out a pizza they’ve already ordered.  They rarely walking in and ordering. And so, requiring expensive menu boards to be labeled can cost up to $5,000 a year for a menu board to change all of them out.  It doesn’t make a lot of sense.

As well as some of the particulars of the legislation don’t make sense.  Menu labeling by the slice would make a lot more sense than menu labeling a whole pizza…it forces you to do big calorie ranges, which are just not providing customers with useful information. And so, we’re really asking, for the pizza players, we’re really asking for some specific changes. We’re not asking to get out of the law at all.  We’ve been providing nutritional information to customers for a year, but we know the way to do it that’s the most accessible – and useable – by our customers.

And so, that’s our portion of this regulation that impacts us. For our peers in the restaurant and convenient store industry, they were actually never part of this patchwork of legislation out there in menu labeling to begin with, but when they created a federal legislation – it kind of sucks them into it. Even though they weren’t a part of the original idea behind this.   They were sort of pulled in by the FDA. And, as a result, are being required to do menu labeling in restaurants and convenient stores, which – for the large part – 75% of what they sell is already packaged goods that are labeled.

So, it’s a pretty onerous burden for them as well to have to go through all of this extensive menu labeling on things that are often very seasonal items…are created in a situation, like a salad bar, where one day they might have apple slices, and the next day it could be orange slices.  It sort of depends on what they’ve got on hand in the grocery.  And so, it’s a pretty onerous legislation, piece of regulation to put on an industry that provides a fair amount of nutritional information already. And it’s a pretty big financial burden that they bear to comply with this legislation.

So, Rep. Cathy McMorris Rodgers’ legislation that she’s introduced fixes it, so that the convenient stores and the grocery stores, who were really never part of the original state and local-level regulations to begin with, can be exempted if they are primarily operating as grocery and convenient stores, and not as restaurants.  And for the pizza industry, it kind of gets us out of the one-size fits all aspect of the regulations that just don’t make sense for us.

Now, what has the American Pizza Community done to make their case to Congress? Fouracre said:

We’ve [APC] done a lot actually.  We’ve submitted docket comments on the two rounds of draft regulations that were out there with our viewpoints on what the impact would be on out industry.  Representatives from the American Pizza Community met during the time we were allowed to with the FDA to sort of explain this regulation, and its impacts, to them in person.  We’ve had members of Congress write letters on our behalf to the FDA saying this is pretty onerous, please consider this as you’re writing the regulations – and [Reps.] Cathy McMorris Rodgers and Loretta Sanchez introducing legislation that they currently have in the House, as an attempt to try to fix this as well.

Then again, wasn’t this a NRA/APC initiative?  Are they complicit in this regulatory fiasco?

They did. Nope. They did. Absolutely. Because the core of it is they wanted to get rid of this patchwork of state and local regulations, which makes sense –and we support that intent. I think the problem is that because pizza is a little bit different than a McDonald’s, or a Dunkin’ Donuts, or an Olive Garden, or some of those more traditional restaurants that you might think of – we just have a few different issues in some what other restaurant chains do. And we feel like that outside the box thinking needs to be applied because restaurants are a pretty big industry. There are a lot of different formats and styles. We don’t oppose the whole idea of superseding the local and state regulations, we just feel that in the rule making; we have some issues with how the rules are coming out of the FDA.

Now, Fouracre didn’t acknowledged complicity, but did admit that they lobbied for Section 4205. She also said that it’s going to take Domino’s employees 14 million man-hours to make sure they’re following the law.

Matt Vespa is a conservative blogger who contributes to CNS News, RedState, Noodle Pundit, and was formerly with Hot Air's GreenRoom.

Comments are closed.

Top Rated Comments   
Fast food runs on very low returns. Maybe in the 3-6% range.

So if you are not happy about that I have an idea. Open a pizza delivery and pay your workers whatever you want. Run that from around 8am to closing at around 2am. Or just make your own times. Invest your life savings and borrow over that just to get started.

So tell us your story how you started up a retail high risk business like a Dominos and how you did in that. I am all ears.


35 weeks ago
35 weeks ago Link To Comment
All Comments   (12)
All Comments   (12)
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Correction: The original post stated that the American Pizza Community lobbied, with the National Restaurant Association, for Section 4205. That's incorrect. Additionally, it was originally reported that Domino's has been providing nutritional information for over a year. It's actually over a decade, and 95% – not 75% – of grocery store items are labeled. The post has been updated to reflect the change
35 weeks ago
35 weeks ago Link To Comment
Correction: The post reads that the American Pizza Community lobbied for Section 4205. That's incorrect. Please excuse the error.
35 weeks ago
35 weeks ago Link To Comment
It was only the National Restaurant Association.
35 weeks ago
35 weeks ago Link To Comment
Obama is evil.
35 weeks ago
35 weeks ago Link To Comment
and the people who elected him and lazy Conservatives who stayed home and let him win a second term are Evil- I sure hope the lazy Conservatives wake the FLUKE up and vote the Dems out of office in Nov & In 2016 and please to God please don't let Hilary run - every liberal will vote for her along with Unions and the Conserves will stay home
35 weeks ago
35 weeks ago Link To Comment
Oh, it's delicious.

Not the pizza. The irony.

Let me see if I have this right. There were a bunch of individual local and state laws for food labeling. These laws were tailored to the particular beliefs and legal predispositions of the areas that made the laws. Then the federal government came in and overwrote all those disparate, tailor-made laws with one enormous overgeneralized standard-issue law that doesn't quite fit any of the desires of said areas. Pizza restaurants supported this because they figured it'd make it easier for them. They'd only have to comply with one big law rather than having to deal with the individual tailor-made laws. Only the big law ALSO overgeneralized all over THEM, by failing to take their model into account and... as a result... requires them to do more work than not having to comply with local laws saves them.

Huh. I guess they only like over-generalization by the federal government when it's happening to other people.

And the really sad thing is that major national companies will still line up to get in bed with the government, because they'll always be blinded by the potential power and (consequently), remarkably short sighted about how hard that power is to aim. See: PRISM. Somewhere around here we really need to pry apart the people with all the money and the people with all the guns.
35 weeks ago
35 weeks ago Link To Comment
Exactly, Bill. The core is that this is what crony capitalism ends up. Lobbying and rent seeking replace competition and innovation.
35 weeks ago
35 weeks ago Link To Comment
Well, Dominos, cry me a bloody river!! Besides the millions of man hours of work you got yourself into, how about the fact that you are rapidly converting all of your employees to part time [less than 30 hours a week] so you don't have to pay health insurance benefits? Seems to me you got what your asked for.
35 weeks ago
35 weeks ago Link To Comment
You really don't understand economics, do you?
35 weeks ago
35 weeks ago Link To Comment
Think Spineoneone is saying the liberals at Dominos & other mega outlets that supported Obama should Sleep in the BED they made
35 weeks ago
35 weeks ago Link To Comment
Fast food runs on very low returns. Maybe in the 3-6% range.

So if you are not happy about that I have an idea. Open a pizza delivery and pay your workers whatever you want. Run that from around 8am to closing at around 2am. Or just make your own times. Invest your life savings and borrow over that just to get started.

So tell us your story how you started up a retail high risk business like a Dominos and how you did in that. I am all ears.


35 weeks ago
35 weeks ago Link To Comment
So, basically, you're angry at them for doing their best to conform to the new regulations. GFY.
35 weeks ago
35 weeks ago Link To Comment
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