First they came for pizza.
You’d think there wouldn’t be much of a role for the government in regulating pizza (even if it is indirectly), but with a federal register topping 81,640 pages in length, there’s a regulation for everything. Obama set numerous regulatory records during his presidency – both for the greatest number of pages of regulations added to the federal register in a single day, and in a single year. And while he’s no longer president, there are some zombie regulations set to take effect next month if Donald Trump doesn’t halt them.
Thanks to Obamacare, franchise restaurants (with more than 20 locations) will have to provide calorie counts for every item on the menu – and every possible variant of that item. That’s no big deal for a franchise with relatively simple offerings, but think about all the different possibilities on something like pizza, or the number of ways you can customize a drink at Starbucks, and it becomes a logistical nightmare.
According to the National Review’s Kevin Williamson, Dominos executive Tim McIntyre said “We did the math. With gluten-free crusts to thick to hand-tossed to pan pizza, multiple sizes, cheeses, toppings . . . there are about 34 million possible combinations. That is difficult to put on a menu.”
Not that anybody is ever going to use it. The great majority of Domino’s orders are placed over the Internet and almost all the rest are placed by phone. The number of people who walk into a Domino’s outlet, look at a menu, and order a pizza is relatively small, representing only a few percentage points of Domino’s customers. Other pizza chains see roughly the same thing. So the signs are going to be largely useless, but they’re also kind of expensive, “Useless + Expensive” being the classic federal regulatory equation.
McIntyre estimates a price between $3,500 and $5,000 per location. That isn’t very much to a big corporation like Domino’s, but the Domino’s corporation doesn’t operate all those Domino’s shops: Those are franchises, run by independent owner-operators. The profit margins are low, and five grand is a lot to put on a business that might only be throwing off $40,000 or $50,000 in profit a year. Or less: Franchise chains are pretty tight-lipped about what their stores actually earn, but if we assume a 5 percent profit margin, typical of such restaurants, and an average sales volume of about $730,000, as reported in 2013 by the Motley Fool, then that’s only $36,500 per store, meaning that a $3,500–$5,000 sign could easily eat up a tenth of a year’s profit.
So, with all the costs considered, is there at least a silver lining in that calorie counts would reduce obesity? Before even pointing to any studies on the matter, remember that literally every item you buy at the supermarket comes complete with a calorie count and nutritional information, and the majority of food is consumed within the home. Those calorie counts certainly haven’t halted the obesity epidemic.
Anyway, as for the evidence, a study of McDonald’s customers found that those who were provided with supplemental information about recommended daily caloric intake ordered lunches with 50 calories more on average than those who were not advised of expert opinion.
What could possibly explain people eating more calories’ worth of McDonalds when provided with calorie counts? Well, it’s no secret that fast food isn’t healthy – so it’s quite possible that people were actually overestimating the calorie counts of their favorite items.
In any event, this is just one more example of government overreach and one more reason why Obamacare must be repealed — as if anyone needed more examples of both.
[Note: This post was authored by Matt Palumbo. Follow him on Twitter @MattPalumbo12]