Restaurant takes slow and steady approach in plans for expansion
Like its restaurants, Brea-based Calabee’s Inc. has an old-school strategy–careful and slow growth.
Not that the Applebee’s franchisee wouldn’t like to grow faster in its home stale. It’s just that the cost of doing business in California is too high to afford mistakes, said John Bifone. its founder and chief executive.
“We have to be able to find the right location and the economics have to work,” he said. “There’s no sense in chasing new stores if the market doesn’t support it.”
Calabee’s plans to open as many as l0 Applebee’s Neighborhood Bar & Grill restaurants in the next five years, Bifone said.
The company franchises restaurants from Overland Park, Kan.-based Applebee’s International Inc. It has seven Applebee’s in Los Angeles. It also owns Millie’s Restaurant & Bakery, a 15-restaurant chain that includes one in Brea.
The company declined to disclose revenue figures.
Bifone said he’s eyeing Brea, Yorba Linda, Anaheim, Orange and Garden Grove, among other cities, for new locations.
“I’m working on trying to feed the pipeline so to speak,” he said. “The challenge clearly is to be able to find locations in enough cities with enough stiles to make the economics work here in California.”
Bifone said workers’ compensation insurance and a high minimum wage compared to other states are major considerations in locating spots to open restaurants.
“It’s very, very expensive to do business in California,” he said. “Frankly, it discourages us and people like us in the restaurant industry from being aggressive.”
At each new store, he said, the company hires more than 165 people. It costs about $1,4 million to $1.5 million to open an Applebee’s, which usually is about 5.000 square feet, Bifone said.
Overall, the chain has cultivated a large following throughout the U.S., with 1,600 stores in all states except Hawaii Systemwide sales for Applebee’s were 5315 billion last year, said Ron Paul, president of Chicago-based restaurant consultant Technomic Inc.
That puts it ahead of two other top casual dining chains, Outback Steakhouse Inc. and Brinker International Inc.’s Chili’s chain.
Louisiana restaurant insurance rebate to total $4.1M
The Louisiana Restaurant Association Self Insurer’s Fund will return $4.1 million in unused premium and interest income to eligible participants in April.
For 25 years, the LRA/SIF has a cumulative total of more than $75 million in dividends - more than any other workers’ compensation provider in the state. The fund insures 2,735 hospitality-related businesses in the state including restaurants, restaurant suppliers, hotels, casinos and bakeries.
“Every penny of premium not spent on claims or administrative expenses is returned to the very members who have made this program so successful,” said Jim Funk, LRA president and CEO. “No other workers’ comp insurance program in Louisiana comes close to matching our rate of return over the last several years and we commend our members’ commitment to workplace safety.”
For the past 19 years, the board has reviewed the financial stability of the LRA/SIF and concluded the surplus can be returned to members without jeopardizing the fund. In addition to regular dividends distributed in April, the LRA/SIF will continue to offer its safety incentive program, now issued in the form a credit applied annually to those members who: attend at least one annual safety seminar; complete the fund year with a loss ratio below 50 percent; and provide a copy of their working safety program.
Supersizing of America: Obesity’s Potential Implications for the Insurance Industry[dagger], The
I.
INTRODUCTION
From the late 1980s to early 1990s, many of the fast food restaurants in America began offering “supersized,” “king sized,” or “biggie sized” portions of french fries and soft drinks as part of a “combo” meal. When ordering at one of these fast food establishments, customers would invariably be asked if they wanted to “supersize” their selection for an additional charge. The increased portion sizes were not limited to fast food restaurants, and meal portions increased in many full service restaurants as well. During this period of “supersized” meals, Americans began to become “supersized” as well. In 2001, the United States Surgeon General published “The Surgeon General’s Call to Action to Prevent and Decrease Overweight and Obesity 2001″ wherein it was noted that overweight and obesity “have reached epidemic proportions in the United States.”1 This article is not intended as an attack on the fast food industry and will not focus on any issues related to the current litigation against any particular fast food restaurant. Instead, this article will examine the potential implications for the insurance companies providing health, life and disability insurance to a more obese American public.
II.
THE INFLATION OF AMERICAN WAISTLINES
Based upon data in the 1999-2000 National Health and Nutrition Examination Survey (NHANES), approximately two-thirds of adult Americans are either overweight or obese.2 The chart3 below demonstrates the increase in obesity/overweight levels from 1976 through 2000.
Between 1986 and 2000, the number of American adults who are 100 pounds or more overweight increased by four times, i.e., from one in two hundred adults to one in fifty.4 Unfortunately, the increase in obesity levels is not limited to adults.5 Since 1980, the number of obese/overweight children has doubled and the number of obese/overweight adolescents has tripled.6 The chart7 below demonstrates the increase in obesity/overweight in children and adolescents since 1963.
The increase in obesity in America has not been limited to any particular geographic area as evidenced by the chart” below.
As of 1999, all states, except Colorado, had obesity rates of at least 15 percent or more, and 22 of the states had obesity rates of 20 percent or higher.9 The obesity problem is not limited to a particular age group, gender, race, or ethnicity.10 The chart ” below demonstrates the levels of obesity among males and females in White, African-American and Mexican-American populations between 1988 and 1994.
Among children and adolescents, the racial and ethnic disparities in overweight are similar to the pattern set forth in the chart above, i.e., Mexican-American boys tend to have a higher prevalence of overweight than White or African-American boys, and African-American girls tend to have a higher prevalence of overweight than White or Mexican-American girls.12
Although BMI has become the standard to determine if an individual is obese/overweight, it has limitations because it can overestimate body fat in muscular individuals and underestimate body fat in individuals who have lost muscle mass, e.g., the elderly.14 Based upon the National Institutes of Health Clinical Guidelines, the accepted definition of overweight is a BMI between 25 kg/m^sup 2^ and 29.9 kg/m^sup 2^ and the accepted definition of obese is a BMI of 30 kg/m^sup 2^or greater.15
III.
HEALTH IMPLICATIONS OF OBESITY
With the rise in obesity levels in America over the past two decades, the impact of greater levels of obesity are beginning to be recognized in several health areas. It has been postulated that obesity causes approximately 300,000 deaths per year in America.16 The Surgeon General has warned that obesity related deaths could rival deaths caused by smoking in the near future.17 Individuals with a BMI of 30 kg/m^sup 2^ or greater comprised 80 percent of the deaths due to overweight or obesity.18 Individuals with BMI of 30 kg/m^sup 2^ have an increased mortality rate of 50 percent to 1OO percent from all causes, including cardiovascular disease, versus individuals with BMIs in the range of 20 to 25 kg/m^sup 2^.19
Obesity has been recognized as contributing to a number of health concerns including “hypertension, insulin resistance and diabetes mellitus, cardiovascular disease, hypertriglyceridemia, low high-density-lipoprotein cholesterol, and, in some studies, high total and low-density-lipoprotein cholesterol.”20 Additionally, obesity increases the risk of endometrial cancer (women) and colorectal cancer (men) and can cause “chronic hypoxia and hypercapnia, sleep apnea, gout, and degenerative joint disease.”21 The chart22 below lists several health issues complicated by obesity.
The NIH’s Clinical Guidelines address the health risks of obesity and examines several different health conditions impacted by obesity.
Hypertension - High blood pressure prevalence increases as BMI increases. For individuals with a BMI e”30, 38.4 percent of men and 32.2 percent of women have high blood pressure. This is compared to 18.2 percent of men and 16.5 percent of women with a BMI d”25. A 10 kg higher body weight increased systolic blood pressure by 3.0 mm Hg and diastolic blood pressure by 2.3 mm Hg. The increased blood pressure levels translated to a 12 percent increased risk for coronary heart disease and 24 percent increased risk for stroke. Additionally, obesity and hypertension are “co-morbid risk factors for the development of cardiovascular disease.”23
Mimi’s Cafe sets precedent with Calif. wage-hour insurance win
SANTA ANA, CALIF. — A landmark decision by the California Court of Appeals here may clear the way for restaurant operators to obtain compensation from employment practices liability policies when the employers make costly legal payouts amid the current wave of wage-and-hour litigation.
The appellate court ruled in favor of SWH Corp., former parent of the Tustin, Calif.-based Mimi’s Cafe chain, which had appealed its loss in a lawsuit against Select Insurance Co. The insurer had refused to contribute to a $1.9 million settlement in 2004 of a lawsuit against Mimi’s Cafe by assistant managers who claimed they were denied overtime pay.
The Sept. 28 ruling yielded the first appellate precedent for such cases and should encourage restaurateurs to pursue reimbursement from their insurance companies if they deny coverage in wage-and-hour class actions, said labor lawyer Robert Wallan of Pillsbury, Winthrop, Shaw and Pittman in Los Angeles. The firm represented Mimi’s Cafe in the case.
California has witnessed an explosion of wage-and-hour class actions in recent years, and several restaurant companies have shelled out multimillion-dollar settlements to employees. Often, operators will not press an insurer if it denies a claim, but the issue is worth pursuing said Wallan, who also represented Lake Forest, Calif.-based Del Taco in a similar lawsuit.
CRA aims to overturn health insurance bill - California Restaurant Association - News Digests - Brief Article
SACRAMENTO, CALIF. — The California Restaurant Association is mounting a referendum campaign to overturn a new statewide law requiring employers of 50 people or more to provide workers with health insurance and pay most of the premiums.
The CRA said it is part of a coalition called Californians Against Government Run Healthcare, which includes the California Chamber of Commerce and California Retailers Association, among other employer group. The coalition has begun a drive to collect the signatures of 373,816 registered California voters–the number needed to qualify for the ballot a referendum to turn back the new law.
Senate Bill 2, beginning in 2006, requires employers of 200 or more people to provide specified health insurance coverage and pay at least 80 percent of the premiums for any employee working at least 100 hours a month and those workers’ dependents. Beginning in 2007, SB 2 will require employers of 50 to 199 people to provide those workers, but not their dependents, with health insurance and pay at least 80 percent of the premiums.
CRA aims to nix insurance law: seeks repeal of Calif.’s employer-paid health mandate - News - California Restaurant Association
SACRAMENTO, CALIF. — California Restaurant Association leaders said they had decided to mount a referendum campaign aimed at overturning a costly new state law mandating employer-funded health insurance because research indicates that large numbers of voters would support repeal of the controversial measure.
However, the CRA executives, hedging their bets, also have retained two political consulting groups that have a record of helping to sway voters against health care mandates.
At issue is the law implemented as a result of state Senate Bill 2, which takes effect in 2006 and will require companies with 200 or more workers to provide them with specified health insurance. The law requires employers to pay at least 80 percent of the premiums for employees and their dependents, so long as the employee works at least 100 hours a month.
Beginning in 2007, the new law will require employers of 50 to 199 people to provide those workers, but not their dependents, with health insurance and pay at least 80 percent of the premiums.
The CRA and other employer groups have dubbed the new law, the nation’s first such mandate, a business and job “killer.”
Former CRA chairman Sam Manolakas, a multiunit family restaurant operator in Sacramento, said his company’s 3.6-percent profit margin would be wiped out and replaced with an annual loss of $1 million if he is forced to comply with the new law.
“My family doesn’t have $1 million lying around, so I don’t have a lot of choices but to shut the doors and lay off 280 workers or drastically raise prices.” Manolakas said. “We’d have to raise menu prices by 40 percent just to break even.”
The CRA’s initial concerns about the difficulty of repealing SB 2 have given way to optimism that it can be rescinded.
“Our instincts were that this flaw] would be difficult to overturn at the ballot box,” CRA chief executive John D. Dunlap III said. However, research now suggests that “a lot of people have an aversion” to direct government involvement in the health care system, he added.
Dunlap said the research included recent consumer polling and a review of surveys tied to the Clinton administration’s failed efforts to enact a national, employer-funded health insurance plan. The CRA has concluded that many voters who already have insurance are uneasy about direct government involvement in health care because they believe it might lead to fewer choices in care providers and treatment options, Dunlap indicated.
The restaurant association is leading a coalition of business groups that, by referendum law, has 90 days to collect the signatures of 373,816 registered voters in order to qualify the SB 2 repeal effort for the March 2004 ballot.
“We have an overwhelming and positive opportunity to take this terrible law and overturn it at the ballot box,” Dunlap declared.
The CRA’s board of directors and political action committee have authorized the expenditure of more than $2 million to gather the needed signatures, Dunlap said. Petition forms needed to collect signatures have been transmitted to the 5,000-plus CRA directors, members, suppliers and other interested parties on the association’s e-mail list so that they can secure names to augment the work of paid collectors, he explained.
Despite the large financial commitment represented by the CRA’s referendum-related political war chest, it won’t be sufficient for doing the job, Dunlap said. “We estimate the [referendum] campaign will cost in excess of $12 million, so we have also embarked on an aggressive fundraising campaign,” he explained.
Those efforts would include a campaign to raise funds from other states’ restaurant associations and operators. The CRA will attempt to show those potential contributors that they have an interest in the outcome of the SB 2 battle because of California’s reputation as a trendsetter in work place legislation and laws affecting employers.
Joining the CRA in the referendum effort are the California Chamber of Commerce, the California Taxpayers Association, the California Retailers Association and the California Business Properties Association. The group is calling itself Californians Against Government Run Health Care.
This is not the first time the CRA has taken a high-profile position in a statewide battle over mandatory employer-funded health insurance. The association in 1992 was part of an employer coalition that successfully campaigned to defeat physician-sponsored Proposition 166, a ballot measure that sought to force employers to fund universal access to health care.
Borrowing a page from the playbook used in that 1992 campaign, the CRA hired Frank Schubert of Frank Schubert Public Affairs and Richard Claussen of Goddard Claussen Strategic Advocacy. They are credited with helping turn back eight statewide ballot measures tied to health care issues, including Prop. 166, the CRA said.
Of particular relevance to the SB 2 battle, Dunlap said, was Schubert’s work last year in a campaign that ultimately helped sway 80 percent of Oregon’s voters to reject a government-run health care system.
Vans in Salvation Army aid mission
Three months after Hurricane Katrina caused devastation in the Gulf Coast Region, the Salvation Army is continuing to remain active in its recovery efforts.
Two vans donated to the charity’s emergency disaster services department by Car Sense are being loaded with relief supplies in Pennsylvania and driven by a team of volunteers to Bay St. Louis in Mississippi.
After seeing the devastation caused by the hurricanes over the summer, CEO of Car Sense, Francis McGowan said that he felt compelled to help out by donating the vehicles.
The vehicles have now been integrated into the Salvation Army’s emergency disaster services fleet and are ready to be deployed, reports Business Wire.
The mission is part of the Bucks Montgomery Katrina Project recovery effort.
Volunteers using donated or company vehicles are reminded of the importance of taking out adequate van insurance.
Lorry driver ‘lucky to be alive’
A lorry driver trapped inside his vehicle after veering off the road in South Earlswood, Surrey, was reportedly lucky to have escaped the ordeal.
Despite crashing into a parked car and then smashing though the front of two semi-detached houses on Horley Road, neither the 59-year-old lorry driver nor the residents of the properties were seriously hurt in the smash.
However, the collision destroyed both of the houses, covering the area in debris and smoke, The Post reported.
After the driver was taken to East Surrey Hospital and the two properties confirmed as empty by the fire brigade, structural engineers were called onto the scene to decide what action should be taken.
Ambulance spokesman, Julee Sanderson, said: “Given the nature of the incident it could have been a lot worse than it was. The driver could have been more seriously injured.
“He is very lucky to be alive.”
The horrific incident highlights the importance of adequate lorry and van insurance, particularly after it was revealed that many long-haul drivers often go for long distances without a break.
Welsh company in van conversion scheme
A company in Wales is offering a unique service to van owners.
Arndro, set up by Iwan Lloyd Roberts in 2004, converts client’s ordinary vans into camper vans with removable interior furniture.
Speaking to the Western Mail, Mr Roberts pointed out that ex-fleet vans could be bought relatively cheaply by customers wanting to make use of the service.
The vans are gutted and cleaned before having insulation, interior walls and hard-wearing flooring fitted. Arndro specialists then use modular furniture to turn the van into a multi-purpose vehicle (MPV), where the furniture can be removed if necessary.
“I had the idea that there was a gap in the market,” said Mr Roberts: “People like myself who do outdoor sports just want a simple vehicle that does the job - somewhere to sleep and cook.”
Mr Roberts added that the converted camper vans were a much cheaper option than buying the real thing. All clients have to worry about is whether the vehicles still qualify for commercial van insurance.
Van drivers warned of legislation changes
Businesses are being advised to warn employees of recent changes to legislation concerning private use of company vans.
Until now, employees using a company van out of working hours were taxed a charge of £500 on the benefit, or £350 if the vehicle was over four years old.
New changes to legislation however mean that no charge will be incurred from now on by van drivers using company vehicles out of hours, with the catch that private use of the vehicles must be restricted to journeys to and from home.
Graeme Surtees, tax partner at accountants and business advisers Horwath Clark Whitehill, told the Evening Gazette: “If the rumours are true, the Inland Revenue ‘van spotters’ could make journeys to the supermarket for van users very expensive.”
The Inland Revenue said that it feared the changes in regulations would be abused by some businesses. Speculation has been voiced over whether inspectors are gathering a database of registration numbers in order to check if vans are being used improperly.
The warning also serves to highlight the necessity that businesses provide their drivers with fully comprehensive van insurance.