robert:
the ACA imposes DEDUCTIBLE expenses on such restaurants.
are the restaurants including the surcharge amounts in their taxable income stream?
or are they treating the surcharge amount as non-taxable income and deducting the full cost of the ACA costs from their taxable income?
when this whole scheme was started, the restaurants came up with a narrative about how TRANSPARENT they were going to be—where is the transparency?
a deductible expense is still ($x - $x(tax rate)) out of your pocket.
I didn’t realize people hated restaurants making money. I mean they’re working with single digit profit margins here.
robert:
to reiterate,
your argument that this is a perfectly fine way for them to get around their obligation to pay their landlords a percentage of the gross receipts suggests that their actual lease exempts such surcharges from their gross receipts. what are the odds of that?
A search for “sample restaurant lease percentage of sales” leads to this definition of gross receipts:
Gross Sales (Restaurant). Gross Sales shall include the gross selling price of all merchandise, food, alcohol or services sold in or from the Premises by Tenant, its subtenants, licensees and concessionaires, whether for cash or on credit and whether made by store personnel or by approved vending, video, pinball or gaming machines. All sales originating at the Premises shall be considered as made and completed therein, even though bookkeeping, payment or collection of the account may take place elsewhere, and even though actual filling of the sale or service order and actual delivery of the merchandise may be made from a place other than the Premises. Each sale upon installments or credit shall be treated as a sale for the full cash price at the time of sale.
Looking at the restaurants named and their locations, I doubt whether many have a percentage lease clause. I think that is more likely with restaurants in shopping centers and maybe in shared kitchen or commissary concepts.
Restaurants generally try to exclude sales taxes from gross sales and may try to deduct refunds from gross sales.
ok
maybe they have a leg to stand on until the the landlords get up to speed.
still,
where is the TRANSPARENCY that they told their customers would be in place?
I don’t expect to have audit rights when I dine at a restaurant.
Oh man, I am officially putting down my John Grisham novel. Just gonna read this thread for legal entertainment.
When is Tom Cruise gonna start running full speed for no good reason?
Pizza Hut?
I had a hankering for some Wings and when I was quoted the cost of the wings plus $4.99 plus 50¢ plus $5 tip I opted for caviar instead.
when they are asserting that the money will be used for a particular purpose AND they claim TRANSPARENCY, imho, it’s different.
if they just raise their prices, of course i wouldn’t expect anything.
Yep. Those unexpected charges were…unexpected.
Of course, the one that delivers to our area doesn’t participate in most of the national promotions/coupons, either.
Alas, I don’t think he ever stopped… 
On one side, we have Daniel Sterrett, a lawyer looking to make a pile of money off a class-action suit where the alleged damages to the individual members of the class are 3% of their restaurant bills at a dozen or so restaurants between 9/1/14 and 1/9/2018.
On the other, we have the owners of AOC, Lucques, The Hungry Cat, Rustic Canyon, Milo & Olive, Huckleberry, Melisse, Animal, Son of a Gun, Trois Mec, and others. I don’t find it hard to pick sides in this fight.
To those who wonder why the restaurants added an optional surcharge for health benefits instead of raising the prices of the dishes on the menu: a surcharge is not subject to sales tax and diners won’t tip on a surcharge.
Diners who want to can subtract them from tips, but surcharges are taxable.
Here’s an article about those sneaky, greedy, millionaire restaurant owners trying to cheat their customers with those horrible surcharges. Thank god there are poor but noble class-action lawyers to bring some justice to the oppressed.
Bastards!
I insist upon thinking the worst of the chefs I admire!
This whole mess speaks to the long needed overhaul of our fractured medical system. Great for some, not so for many.
A close work associate of my wife had put off getting medical coverage because of the inordinate impact upon his income. He finally got to the point where he achieved a level of financial security where he felt he could finally afford medical coverage.
Not too longer after, he felt ill, went for a long overdue exam, and was diagnosed with stage four pancreatic cancer. The sad news is, the doctor regretfully mentioned that had this been dignosed in its early stages, the outcome would have been in his favor.
Sure, having medical coverage earlier was no guarantee in finding the cancer. But he would have had A chance, versus NO chance with no medical coverage.
I’m fortunate for having medical coverage through work. If this surcharge system is a response to offer some sort of coverage to a segment of the population that otherwise would have none, then I’m in. But this form of attempting to provide coverage speaks to how the current systems are failing to provide for so many. And damn the legals who leverage this situation to gain the lion’s share of the funds in question.
"We wanted to have our menu prices be an accurate reflection of ingredient costs…”
Then they should have a utility surcharge, too.
These guys were trying to avoid raising prices so they wouldn’t have to say “it’s not our fault our prices have gone up”
Personally, I tend to take people at their word unless they break that trust or are so full of shit I know they are lying. (I know. I’m a rube.)
The restaurateurs in question haven’t met either of those exceptions to my rule.
My read is that they are trying to make the best choices for themselves as entrepreneurs, their employees, and their customers. Finding that balance is tricky. The optional surcharge is a solution they came up with. Definitely not perfect. But I have a hard time seeing it as malicious.
