A little-known provision of the Patient Protection and Affordable Care Act could have a negative impact on thousands of family-owned pizza shops and restaurants across the country. The menu-labeling section of the law requires food establishments with 20 or more locations to provide calorie information on menu boards. Regrettably, the Food and Drug Administration (FDA) has proposed a one-size-fits-all approach that will be both expensive to implement and ineffective, imposing high costs on businesses without improving consumer information. Especially during a time of economic uncertainty, the government can –– and must –– do better.
As president and CEO of Domino’s Pizza, it is important to note that we support providing nutritional information to our customers. In fact, we have been doing that on our own for more than a dozen years. Our concern is that the proposed rules represent an expensive step in the wrong direction. Let us consider a few examples of how the proposed law would impact Domino’s.
First, the FDA fails to account for the ways in which businesses actually service their customers. The proposed regulations would require our franchises to provide calorie information on in-store menu boards, a mandate which would cost each store thousands of dollars every year (starting at $1,600 and going up to $4,700 per year). As a delivery-oriented business, 90 percent of orders are placed by phone and online. As a result, the vast majority of our customers never even step foot in a store, much less look at the menu board. Incidentally, in New York and in other municipalities where we have already been forced to menu label, we have seen no change in customer ordering behavior. Unfortunately, the FDA’s regulations are indifferent to these facts, and could result in millions of dollars of annual expenditures that a fraction of consumers actually see.
Second, the FDA unsatisfactorily addresses the challenges posed by customizable or “variable menu items” like pizza. Under the proposed rules, we would have to label entire pizzas, and provide a calorie range that could be as wide as 2,000 calories. How is that helpful? The beauty of pizza is that is can be customized to individual preferences and nutritional needs. Given our various options for size, crust, sauce, cheese and toppings, there are over 34 million ways to order a Domino’s pizza. Moreover, we know that for Domino’s customers, pizza is a shared meal, and we know from experience and research that our customers prefer nutrition information by the slice, as it is equivalent to the “serving size” found on all packaged goods. The FDA’s decision to mandate calorie ranges for whole pizzas will result in information that is neither accessible nor clear to the consumer.
Third, we believe the legislation as written is unfair to our small business owners. While Domino’s is a global brand, the reality is that we are a network of small, family-owned businesses. The average Domino’s franchisee owns four stores, and half of our U.S. operators only own one store. Yet because they are affiliated with a “chain,” they have to bear the cost of the regulations whereas their independent in-town rival –– also a single store owner –– would not. When you factor in all of the restaurants that will not have to comply with the legislation, you soon discover that more than 70 percent of all restaurants in America will not have to share this cost burden. That imposes an unfair and significant economic disadvantage on our franchisees.
So instead of listening to long-time small business owners and their recommendations for sensible, effective ways to provide nutrition information to their customers, the FDA drafted a one-size-fits-all set of rules for menu labeling that will result in wide calorie ranges for entire pizzas on menus consumers will not even see, but will cost small business owners thousands of dollars a year.
As advocates of increased consumer education, we seek to improve the regulations so as to deliver nutritional information in a way that is clear, accessible, and cost-effective. Providing online access to such information represents exactly such a streamlined solution. Already, our website features an application called the Cal-O-Meter that displays specific calories and other nutrition information for all 34 million possible pizza combinations. Importantly, consistent with consumer requests, this information is presented by the slice. We continue to provide printed brochures in store with detailed nutritional information, but have found that online access allows people to get the information anytime they want from anywhere they are ordering. That makes more sense.
It is absurd to impose rules that will increase costs to business in a manner that will never be seen by 90 percent of our customers, and will be so confusing as to be ignored by the very few who ever see it. We strongly support the spirit of what the FDA is trying to provide to consumers. The FDA should let us continue to give customers relevant nutritional information where they actually order, in an efficient and fair way, so we can get back to growing our businesses.
