government

5 questions restaurant operators have about QSR federal regulations

3 MINUTE READ

What do you worry about?

Often it’s sourcing, suppliers, financing…the list is long, but the National Restaurant Association in its 2016 industry forecast said operators were most concerned about how QSR federal regulations might tip the scales. The top concerns:

 1. The Labor Pool

Frankly, it’s shallow, thanks to high school and college students taking unpaid internships as resume-builders. There is a slight increase in older people looking for work, but it doesn’t replace the pool of younger workers operators typically draw from. Wages are a concern as well. In 2016, a $15 federal minimum wage “over time” was added to the Democratic party’s platform, and on January 1, 2017, the U.S. Department of Labor mandated federal contractors be paid at least $10.20 per hour, and tipped employees at least $6.80 per hour. No news yet about this expanding beyond federal employees, but the issue is on the table.

2. Profits:

Last year, the industry hit its 7th consecutive year of real sales growth, but loss prevention and narrow margins are always a concern. At the top of the worry list? Federal taxes. Operators were hoping for an overhaul on the federal tax code in 2017—something to ease the average rate (about 35 percent) operators pay now. The PATH ACT, passed in 2015 offered some relief, allowing  depreciation, expensing and tax credits to offset costs. So the worry here is two-fold: Will a much-needed overhaul happen, and, if it does, will congress keeps PATH ACT concessions in place?

3. Data Security:

Mobile payment options are increasingly popular, but security regulation is lagging. Where are we now? The NRA reports there are 48 different  state laws on breach notification (what to do if customers’ financial information is breached or hacked) and 12 on security standards. The good news: Congress is working on a standardized nationwide process, but no news when it will come.

4. Healthcare:

See #1. You know healthcare is a good retention tool, but the red tape can be overwhelming when it comes to classifying employees with the IRS. And the numbers show it might not even be worth it. According to the NRA report, employee participation in employer health plans has decreased—from 67 percent in 2010 (the year the ACA was passed) to 59 percent in 2015. The fines, often a result of miscommunication or botched paperwork, are a big problem. Efforts to repeal or reform the ACA so far have stalled.

5. Menu labeling:

Operators are now required to list calories and other nutritional information. Although it’s not enforceable yet, the big chains are already doing it. Costs run close to $1,800 per location on average, according to the NRA. And don’t forget, as of July 2018, partially hydrogenated vegetable oils (aka: trans fats) won’t be labeled under the umbrella “Generally recognized as safe” by the FDA.

So, what do I do?

We promise we’re not trying to keep you up nights, but this list would definitely do it. The takeaway: Know your numbers.

Take, for instance, your labor pool. Who do you want to hire? What do they want and value?  If you know more about them, you can customize recruitment and retention tools. > Discover 4 strategies for keeping (and improving) your QSR employees.

When it comes to profits, consider loss prevention and food waste. Maximize margins at the beginning of the process, not after the fact. Data helps you do that. > Learn 32 ways you can maximize your restaurant’s labor efficiency.

Are you mandated to provide healthcare? If so, how many employees utilize it? Is there a more cost-effective way to meet the federal requirement? If not, good data and organization will help you manage the process. Avoid botched paperwork (and costly fines) with these payroll best practices for owners and operators.

When it comes to menu labeling, your POS system will track whether or not knowing nutrition information really affects ordering decisions. That data helps across the board with operations issues. Find out how to better manage your QSR’s cost of goods sold.

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