In a sizzling showdown, the Federal Trade Commission (FTC) faced off against the restaurant industry in a heated debate over proposed regulations targeting what they dub as “junk fees.” While this may seem like just another bureaucratic scuffle, the implications could leave a pungent aftertaste for both onion suppliers and consumers alike.
The proposed rule aims to axe common service fees and surcharges, waving a red flag for restaurant operators who fear a domino effect of price hikes and operational shake-ups. It’s not just about what’s on the menu; it’s about the essence of dining out and the layers of services that make it possible.
Michael P. LaMarca, the seasoned owner and CEO of the Master Pizza Franchise Group, minced no words in his opposition to the proposed ban on delivery fees. “Our customers that CHOOSE to have their food delivered are accustomed to paying a delivery fee (for over 20 plus years) and appreciate the service that we offer,” he asserts. For operators like LaMarca, the delivery fee is more than just an add-on; it’s a lifeline that keeps their businesses afloat in a sea of competition.
Echoing LaMarca’s sentiments, Jeffrey Gosnear, president of Grotto Pizza, adds a layer of complexity to the issue. “Right now, order one pizza or 15, and you only pay one delivery fee. If we have to put the cost of delivery in the menu price, when you order more, you’re going to be paying way more than if we just charged a delivery fee,” he explains. It’s a delicate balancing act between transparency and customer satisfaction, one that could crumble under the weight of regulatory interference.
But it’s not just about the bottom line for operators; it’s about the livelihood of their staff. Gosnear sheds light on the impact on tipped service staff, whose earnings could take a hit if these fees disappear. “To protect our server’s earning potential, we use a large party service fee that we post on our menus and website,” he reveals. It’s a symbiotic relationship between operators and servers, one that could wither if forced to adapt to the FTC’s proposed changes.
The FTC estimates the cost of compliance with the new rule to be a hefty $3.5 billion, a figure that has left many in the industry reeling. Sean Kennedy, executive vice president of Public Affairs at the National Restaurant Association, describes the reaction from restaurant owners as nothing short of shock. “The sweeping nature of the FTC proposal on the restaurant industry is the epitome of a solution in search of a problem,” he remarks. It’s a sentiment shared by many in the industry who feel blindsided by the regulatory onslaught.
As the battle rages on, operators find themselves caught in the crossfire, grappling with the uncertainty of what lies ahead. Will the FTC’s proposed ban leave a bitter taste in the mouths of consumers, or will the industry find a way to weather the storm and emerge stronger than ever? Only time will tell, but one thing’s for sure: the onion industry won’t be shedding any tears just yet.
Learn more about the impact of the proposed rule here(Opens in a new window) and read the full National Restaurant Association and Restaurant Law Center joint comments here(Opens in a new window).
