Carl's Jr Sees A Train Wreck; Getting Out Of The Way

Founder of Carl's Jr, a West Coast icon, will not expand in California because of O'BamaCare -- WSJ.

The robust marketing has helped revive a company that a decade ago was still suffering a $700 million debt hangover after purchasing Hardee's in 1997. Since Mr. Puzder took charge in 2000, CKE has grown consistently. Revenues have increased by 3.6% over the past year to about $1.3 billion, and its international restaurant count has grown by more than 15% annually over the past three years. Mr. Puzder is quick to point out that many of his competitors aren't doing as well and the U.S. economy remains underpowered.

Government policies, he says, are stifling young, hungry entrepreneurs, and he doesn't mean tech hotshots. He means the kind of entrepreneurs who run fast-food joints, often immigrants and minorities without much education. In other words, the very people that liberals say they want to help.

The fast-food executive rattles off a list of market suppressants, including uncertainty over labor costs, commodity and food prices, and taxes. But his bete noire is ObamaCare.

Mr. Puzder says his health-care consultants have calculated that it's cheaper to offer his company's 21,000 U.S. employees more expensive health-insurance plans than to drop them into state exchanges and pay the penalty for not covering what ObamaCare regulators deem are "essential health benefits." Yet his consultants can't figure out how many people will sign up under the new plans because the Health and Human Services Department hasn't issued final regulations.

Only 63% of CKE's general managers are currently covered by the company's insurance plan, and a mere 6% of regular workers enroll in its "mini-med" plans, which are prohibited under ObamaCare because they include benefit caps.

"The ones who don't sign up are the young guys and gals who feel that they are healthy and if they get sick, they just go to the emergency room," Mr. Puzder says. Under ObamaCare, "people who were worried about getting stuck without insurance can still go to the emergency room for free and no longer have the incentive of catastrophic illness to sign up for insurance. . . . So the incentives to sign up for the plan just disappeared."

About 40% of Mr. Puzder's employees are part-time and therefore exempt from ObamaCare's coverage mandates. "That percentage of employees will probably go up.

Everybody is hiring more part-time employees," he says, though he is quick to add that "we're not firing anyone to hire" part-time workers. "Through attrition, three full-time employees go away and you hire four part-time employees who basically have the same hours."

This pretty much explains it. Cue up Connie Francis.