In a significant win for the restaurant industry, the Federal Trade Commission (FTC) has excluded restaurant fees from its controversial “junk fees” regulation. The move is welcome news for foodservice operators and the onion growers and shippers who supply this vital sector, underscoring the National Restaurant Association’s role as a powerful advocate for the industry.
What the Rule Exemption Means
The FTC’s initial proposal included a comprehensive ban on several types of fees deemed “unnecessary.” This sweeping regulation would have affected common restaurant charges such as service fees, delivery fees, and credit card surcharges. Compliance with the rule, as originally written, would have cost independent restaurant operators roughly 10% of their total income – an estimated $3.5 billion industry-wide.
However, thanks to the efforts of the National Restaurant Association and its members, these restaurant-related fees have been excluded from the final rule.
“The FTC heard us loud and clear,” said Michelle Korsmo, President & CEO of the National Restaurant Association. “Today’s successful outcome is a direct result of the concerted efforts of thousands of restaurant operators who voiced their concerns to the FTC and lawmakers on Capitol Hill. The sweeping rule would have cost operators – already struggling with rising costs and labor challenges – upwards of $3.5 billion.”
Advocacy in Action
The Association’s victory stems from relentless advocacy efforts, which included:
- 4,600 Public Comments: Restaurant operators across the country submitted comments detailing how the proposed rule would have imposed undue financial burdens on their businesses.
- Capitol Hill Advocacy: The Association worked closely with lawmakers during the 2024 Public Affairs Conference to raise awareness about the rule’s potential impact on the industry.
- Legal Expertise: In partnership with its Restaurant Law Center, the Association argued that the FTC lacked the legal authority to implement the proposed regulations on restaurants.
Why This Matters to the Onion Industry
The restaurant industry is a major consumer of onions, using them as a key ingredient in everything from soups and sauces to gourmet meals and fast-casual offerings. By successfully pushing back against regulations that could have crippled foodservice operators, the National Restaurant Association has helped ensure that restaurants can continue thriving.
For onion growers and shippers, this victory means sustained demand for high-quality ingredients, a more stable foodservice market, and greater opportunities for long-term partnerships with operators.
A Bright Future for Foodservice
Korsmo emphasized the broader implications of this win: “We are extremely pleased that the FTC recognizes the role restaurants play in our economy and our communities and chose to empower operators to make important business decisions without additional financial burdens.”
The exclusion of restaurant fees from the “junk fees” regulation is a reminder of the power of advocacy and the importance of unity within the foodservice industry. As onion growers and shippers continue to support restaurants with top-tier products, they can feel confident that the industry’s leading advocates are working hard to keep the sector thriving.
From all of us at OnionBusiness.com, here’s to a prosperous holiday season for the foodservice industry and its essential suppliers!
