Papa John's CEO John Schnatter: Obamacare likely to raise costs, employee's hours to be cut

NAPLES, Fla. - Just after Barack Obama earned a second term in the White House, Papa John's founder and CEO John Schnatter said the president's signature health-care reform law would increase his business costs and possibly result in employees' hours being cut.

Schnatter, a part-time Naples, Fla., resident, made the comments Wednesday night inside a small auditorium at Edison State College's Collier County campus. In August, he made national headlines after telling shareholders the Affordable Care Act -- commonly known as Obamacare -- would result in a 10- to 14-cent increase for customers buying a pizza.

"I got in a bunch of trouble for this," he told the students. "That's what you do, is you pass on costs. Unfortunately, I don't think people know what they're going to pay for this."

Schnatter, a Mitt Romney supporter and fundraiser, said he was not "pro or against" the reform law but likened the government's involvement in health care to its operation of the U.S. Postal Service, saying "the worst entity in the world for running the thing is the government."

About a third of Papa John's employees are covered by the company's health insurance plan, although Schnatter said he has always wanted 100 percent of them on the plan. The rising costs of health insurance, he said, have been a deterrent.

"The good news is 100 percent of the population is going to have health insurance. We're all going to pay for it," he said, estimating the new law would cost the business $5 million to $8 million annually.

Under the Affordable Care Act, full-time employees -- those working 30 hours or more per week -- would have to be provided with insurance at companies with more than 50 workers. Schnatter said it was likely that some franchise owners would reduce employees' hours in order to avoid having to cover them.

"That's probably what's going to happen," he said. "It's common sense. That's what I call lose-lose."

Other than his comments on health care, Schnatter largely steered clear of politics. The 50-year-old said future entrepreneurs need to marry talent and passion in their endeavors, his being business-savvy and a love of pizza.

"I don't consider this work," he said. "I wake up thinking about Papa John's and I go to bed thinking about Papa John's."

He credited the business' success to having a strong team of people and a quality product, repeating his commercial's catchphrase -- "Better ingredients, better pizza, Papa John's" -- several times.

Schnatter answered questions for about 45 minutes before leaving to participate in a telethon with the University of Kentucky basketball team to raise money for Hurricane Sandy victims. He told students he hopes to present the American Red Cross with a $1 million check.

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