Why Denny's is in damage-control mode

[ProSense]

Why Denny's is in damage-control mode

By Steve Benen

In the wake of President Obama's re-election, a few restaurant chains raised eyebrows by making threats related to the Affordable Care Act. An Applebees franchise owner, for example, vowed to stop building and hiring because of the health-care law.

But it was Denny's franchise owner John Metz who caused the biggest stir, publicly declaring his intention to impose a 5 percent surcharge on customers at his 30 Denny's outlets to offset "Obamacare" costs. "Customers have two choices: They can either pay it and tip 15 or 20 percent, or if they really feel so inclined, they can reduce the amount of tip they give to the server," Metz said.

The backlash didn't take long. Denny's diners, including many that aren't owned by Metz, immediately saw a drop in sales, and were inundated with phone calls from angry customers. With other franchise owners panicking due to boycott threats, the corporate office is in damage-control mode.

Denny's chief executive John Miller privately reached out to Metz to express his "disappointment" with the Florida franchisee's controversial statements about Obamacare, which sparked a wave of backlash for the national restaurant chain over the past few days. Metz released a statement Monday night expressing "regret" over his statements.

"We recognize his right to speak on issues, but registered our disappointment that his comments have been interpreted as the company's position," Miller said in an email to The Huffington Post.

"Unfortunately, the comments of this franchisee, who represents less than 1 percent of our system and who owns restaurants in other concepts, has been portrayed as reflective of the entire Denny's brand," Miller added. "I am confident his perspective is not shared by the company or hundreds of franchisees/small business owners who make up the majority of the Denny's community."

For his part, Metz is in full retreat, issuing a statement denouncing the surcharge he defended last week.

- more -

http://maddowblog.msnbc.com/_news/2012/11/20/15309866-why-dennys-is-in-damage-control-mode

[BlueCaliDem]

1. We the People still have the power!

This is wonderful news because I was about to boycott the Denny's restaurants here in SoCal, too.

[BainsBane]

2. I find it interesting

that all the restaurant chains speaking out against Obamacare have crap food. Obviously chain restaurants in general are not the best, but some are okay and some are awful. The awful ones seem to be die-hard Obama haters.

[frazzled]

4. I bet not many of their employees ever got health insurance from them anyway, either

I'm doubtful they even offer that to their waitresses, line cooks, busboys, cleaning staff, etc. Maybe top managers and PR people do, but not the average worker. Slap me if I'm wrong.

[BainsBane]

6. no, they don't

That's what the surcharges and threats to reduce workers to 50 are all about. They want to avoid providing health insurance. They are cheap, immoral bastards.

[47of74]

25. Nope. I know the business.

There are some REAL ASSHOLES in that industry.

[BlueStreak]

3. Cheating employees out of health care is like walking out without paying for your meal

If anybody understand cheaters and freeloaders, I would have thought it would be restaurant owners. But it seems that it is primarily the restaurant chains that are vocal about how they want to cheat their employees.

[Kalidurga]

5. I started the boycott a long long time ago.

I don't even remember what year it was. But, 4 FBI agents went to Denny's only two got service. The two that got service were white the two that didn't were black. It was probably a coincidence.

[closeupready]

8. That was 1990 or 1991, I think.

[hootinholler]

11. It was at a Denny's in Annopolis Md.

Not sure about the FBI part, but I remember the bruhaha and that's the right year +/- Now for the google...

Ah the Google is good, Secret Service, 1993, Annapolis:

Six black Secret Service agents filed a Federal discrimination suit today charging that a branch of the Denny's restaurant chain refused to serve them because of their race.

The suit said the six were among 21 Secret Service agents who went for breakfast at the Denny's in Annapolis, Md., on April 1, after preparing for President Clinton's visit to the United States Naval Academy.

The restaurant served breakfast to all except the six black agents, who were sitting at the same table, although a single breakfast arrived after an hour's wait, the suit said. Damages Not Specified

John Relman, a lawyer representing the six, said they were good enough to protect the President, "but apparently they were not good enough to get served a plate of eggs at Denny's."

I think it was settled for like $50Mish

[Kalidurga]

18. Thank you for your reply. I was really off.

It was a long time ago and I had forgotten a lot of the details. But, after reading that. I was done with Denny's. I realize that most of their restaurants probably don't have a racist policy. But, I didn't feel like calling around and asking about how they treat black people, minorities, or even poor white people for that matter. Just reading that made me feel ill. But, now I see my initial reaction was probably spot on. Now, that they have come out of the closet and said they are going to raise prices for health insurance, but take it out on your server if you don't like it. That is exactly the kind of attitude I would expect from racist twats.

[Cha]

23. Wow.. in Maryland, too.. How 20 years have changed! That's quite

an expensive breakfast for Denny's!

The Perfect Storm..some racist assholes in the kitchen and the manager..Fired! Has some excellent witnesses too. Can you imagine the beehive of fallout activity going on in the upper echelons of Denny's?!

They got smacked down for Racial Discrimination in the '90s!

[hootinholler]

13. See reply 11, found the story. n/t

[MrScorpio]

22. This is for you

[closeupready]

7. They can regret his remarks, but that ship has sailed.

We now know how he feels, and we can respond as we see fit. That's called free market dynamics, and running a business like Denny's, he clearly knew that was the risk he was taking.

[coalition_unwilling]

16. I'm willing to almost guarantee that the franchise contract Metz signed with

Denny's corporate contains some clause whereby Metz had to agree not to take actions adverse to the Denny's brand. There's probably also language that allows Denny's corporate to cancel Metz' franchisee privileges for cause, I'm guessing.

[uponit7771]

30. +1

[BlueStreak]

9. Here is the email I sent them

I doubt they read them, but they will at least know they are getting a lot of push-back.

I am very disappointed to hear what low regard you have for your employees, as evidenced by the recent comments of your franchisee, Mr. Metz.

Evidently you do not understand that your success is directly related to how well your employees go about their work. Frankly, the owners and executives have very little to do with your success. It is the restaurant employees who prepare the food and serve your customers. It seems very foolish to me that a business owner would hold his most vital asset in such contempt.

Do your restaurants ever have customers who sneak out without paying their checks? I bet you hate that. Well, when you try to evade your responsibility to provide reasonable health coverage for your employees, that is just like the customer who skips out on his check, The rest of us end up paying your share of the cost.

I realize this was a franchisee and you may not approve of his statement. Nonetheless, I will never again patronize any of your properties until I see a clear statement from your corporate headquarters acknowledging the value of employees and making absolutely clear you accept your responsibility to pay your small share of the nation's health care costs.

[BlueStreak]

10. And their response

It is a form letter response, but certainly more constructive than these responses often are.

We want to thank you for speaking out and taking time to voice your concerns regarding comments made by one of our franchisees. The comments made by Mr. Metz suggesting that guests might reduce the customary tip provided to their server as an offset to his proposed surcharge are inconsistent with our values and approach to business throughout our Brand. Mr. Metz has since revised his earlier position, unfortunately our rebuttal was largely dismissed while his comments have been dramatized over the past 4 days in the news and social media. In spite of dramatically increasing health care costs Denny's, Inc. passed on zero increases to our employees for two years in a row and will carry this practice in to 2013, a practice not shared by most of corporate America.

We find it most offensive to have a independent businessman who happens to be a Denny's franchisee with such ill-advised and thoughtless comments to be associated with the company. You can read the response John Miller our CEO issued in response to Mr. Metz’s comments behalf of Denny’s, available here [http://ir.dennys.com/phoenix.zhtml?c=113027&p=irol-newsArticle&ID=1759918&highlight=]. Mr. Metz operates less than one percent of the restaurants in the Denny’s system, and does not represent the views of the Denny’s system as a whole. Denny’s employees are the foundation of our business and it is our intention to continue providing all of them with good job opportunities. Our restaurant team members work tirelessly day in and day out to create a pleasant dining experience for our guests and we believe they should be rewarded for providing the good service we are known for rather than penalized due to legislation. Please be assured that we are working on this issue in collaboration with our franchise partners and will be monitoring the outcome of the Affordable Care Act closely to reach a fair and balanced outcome for everyone involved.

There is an update posted on the Huffington Post website from our CEO, John Miller. [http://www.huffingtonpost.com/2012/11/20/john-metz-dennys-obamacare-surcharge-_n_2146735.html] I hope that you take the time to read it. It is my hope that you will continue to be a patron of Denny's once you have read the latest information.

Sincerely,

Karon Ratke
Customer Service
800-733-6697

[Ruby the Liberal]

14. Applebees response:

I wrote them and said that I was writing to comment about my concern about their CEO's lack of leadership on this NY franchisee issue, and that it has me questioning the health and safety of eating at Applebees in general. Form letter below, that apologized for "my confusion" on this issue. Fuck them.

Thank you for contacting us. The statements you reference were not made by our president, but by an independent franchisee in New York City. The views he expressed represent his perspective, not Applebee’s. To see the company’s response to this please click or copy/paste this link into your internet browser:

http://applebees.mwnewsroom.com/Home/Statement-From-Applebee’s®-President-Mike-Archer-R

We plan to keep growing our brand which will not only create jobs but continue giving us the opportunity to do right by employees including their opportunities for growth as well. We also realize that freedom of speech is a treasured hallmark of our nation and would never attempt to control any citizen’s right to exercise that constitutional privilege. We hope this clarifies the situation and regret the confusion.


Sincerely,

Kevin Neslage
Guest Relations Specialist

[Cha]

24. Wow, BlueStreak,! thanks for your letter to Denny's.. it was quite

compelling and thorough!

And, the response is pretty damaging to Metz! And, all Up With Our People who Work For Us!

If it was a form letter then a lot of people must have sent the type of complaints that you did. So encouraging what Activism Can Do!

[martalcd]

27. Thoughts on this...

- If Denny's truly found Metz's reply "offensive," they would have pulled his franchise licenses immediately.
- If Metz does not represent their views, they should have pulled the licenses immediately.
- Their rebuttal was largely dismissed because they didn't immediately pull his franchise licenses. Everyone knew it was only window dressing.
- Metz revised his previous position only because Denny's probably threatened to pull the licenses.
- If Denny's had actually included every one of their employees in a health insurance plan, they would have had to raise their prices, given the cost of health care today. Because they didn't, they most likely only include a certain elite group in a health care plan. Like those all-important executives who allow idiot franchise owners to speak for the entire company.
- Denny's says only that they provide their employees with good job opportunities, not health care.

Finally, ignore anything Denny's says and boycott their restaurants until Metz's franchise licenses are canceled, and they take steps to treat their employee's like human beings...and their customers...and don't hold your breath.

[hrmjustin]

29. Welcome to DU!

[martalcd]

32. Thank you!

[BlueStreak]

31. You cannot cancel a franchise that easily

The book of franchise law is bigger than a New York phone directory (to use an archaic metaphor). You just can't do that. The franchisee has loads of right to protect him against abuses by the franchise system. There is no way any franchisor could terminate a franchisee in a case like this. If there were a continuing patter of damage to the chain, then that could be litigated, but that still might take a year or more. Some franchise agreements have expiration/renewals -- others do not. If there is a renewal point, then that may present an opportunity to end a relationship that is not working well.

Part of the problem is that this boils down to a matter of opinion -- a PR miscue. It would be different if a MacDonalds franchisee decided to start selling his own menu items competing with the franchise products, or decided to sell Pepsi products when the chain has an agreement with Coke. I assume that for matters of fact like that, it would be pretty easy to get a restraining order, but I still don't think MacDonalds could immediately terminate the franchise in that case.

[Ruby the Liberal]

12. Thats the part I love about this.

John Schattner can do whatever he wants, but when you have franchisees speaking out like this, it forces corporate to speak out against them (even in weak non-apology terms like this).

I hope Applebees is having the same heartache right now.

If these assholes want to speak their minds and fuck with their customers, then they should go get their own brands and stop ruining the name for other franchisees just trying to do the right thing.

Letter to Applebees sent last week (requisite, "that isn't OUR position, and we respect his right to have an opinion, we just don't share it" response received) and the one to Denny's corporate going out now.

[Bake]

15. If Denny's really disapproved of Metz' position, they could yank his franchise.

I"m sure the franchise agreement has a provision about damaging the corporate brand.

Same for Applebee's. As for me, I won't patronize either one until they actually DO that.

Bake

[BlueStreak]

17. They probably cannot "yank" it

What they can do, undoubtedly, is begin a long process of putting him on probation, and if there is a renewal ahead, they can probably opt not to renew. Franchise law gives franchisees a lot of protection here. A hell of a lot more protection than any employee gets, I might add.

[onethatcares]

19. all the more reason

for Medicare for all.

quit the bullshit and let's move into the 21st century.

but that's just me talking, the guy that's tired of spending gauddammmmm gazzillions on war, and
killing tools but lets kids go hungry for food and education.

something is seriously wrong with the United States of America and this Dennys blister is just a hint.

[JHB]

20. I suspect there's a "don't damage the brand" clause...

...in the franchise contract.

If so, Metz is probably backtracking so he doesn't suddenly suddenly find himself operating several no-name and no-supply-chain soon-to-be-ex restaurants.

[central scrutinizer]

21. "who owns restaurants in other concepts" This is so wrong

I do not want to eat at a "concept". Cookie cutter restaurants where everything always tastes the same - ugh

[DonRedwood]

26. Then offer health care to your workers. Case closed.

[uponit7771]

28. Why didn't Dennys corporate offices immediatly come out against the Franchisee?!