The Orlando Sentinel, Fla.
Knight Ridder/Tribune Business News
May 25--Joe Fassler, 56, recently assumed the chairmanship of the National Restaurant Association, the Washington, D.C., group representing the $336 billion-a-year restaurant industry. Fassler, who began his career more than 40 years ago unloading trucks, is president of Restaura Inc., a food-service company in Phoenix. He spoke last week with reporter Susan G. Strother of The Orlando (Fla.) Sentinel about issues facing the industry.
Q: What are your goals as chairman?
A: I am going to try to create what I would call an all-inclusive industry. Right now, we have the National Restaurant Association, state restaurant associations, hotel-motel associations and others. They are all separate, yet we all have the same needs. I want to bring the groups into some kind of alliance so when we go to Capitol Hill and lobby, we'll have more influence. ... We have 10.2 million people working for us in food service in the United States.
Q: What's the key issue facing the industry in Congress?
A: Minimum wage. Most restaurants pay a lot more than minimum wage. It's scaled to market conditions, supply and demand. Now the government wants to artificially set a wage that doesn't take supply and demand into consideration. (Current proposals would increase the wage by at least $1 an hour to $6.15.)
That will cause the restaurateur to do one of two things. They can raise the price ... (or) automate service.
Let me give you an example. We operate the hotels in Glacier National Park (in Montana). Every summer, we hire 1,000 youngsters to work as waiters, waitresses, bus people. ... When the last minimum wage went up, ... instead of hiring 1,000 kids, we only hired 900. Instead of having wait service for lunch, we had buffet (which takes fewer people). Now, if they raise the wage again, maybe next time I can only hire 700 people.
Q: How about the deductibility of the business lunch?
A: We'd like to see a law passed to raise the deductions again on business meals, back to where they were. (A proposal would increase deductions from 50 percent to 80 percent. Meals were 100 percent deductible until 1987.) Now, you and I are at lunch, and I want to tell you how great my product is. When I do my taxes, I couldn't write off half of what it costs us for lunch as a business expense. We are 50 percent illegitimate. ... Any other type of marketing is 100 percent deductible. But the government tried to get rid of what they thought were three-martini lunches. We want to be treated the way everybody else is treated. Marketing is a legitimate business expense. We would like to get meals back up there.
Q: Are there are other bills you're following?
A: We're not happy with efforts to lower the alcohol level for someone to be legally intoxicated. There have been bills that would force states to lower the blood-alcohol level to 0.08 percent in order to keep federal highway funds. (Congressional negotiators last week agreed upon a measure that rejected the tougher drunk-driving legislation. Florida's blood-alcohol level already is 0.08 percent.)
I am 100 percent behind getting the abusive alcoholic that kills people off the road permanently. I think they should be punished terribly. But by lowering the alcohol content, they're not going after offenders who are out there killing people. ...It would cause the people who are socially responsible to not even have a glass of wine with dinner. ... This would affect the restaurant industry, but it also affects the public and could prevent them from enjoying a night out.
Q: What's the most important thing for restaurant customers today?
A: It's got to be food safety. The public is becoming very aware of problems at restaurants when proper procedures aren't followed and people wind up getting sick. Most of the problems generally take place at the meat-packing plants long before the food gets into a restaurant. But the person remembers where they ate. ...The restaurant association, through its education foundation, recognizes that and has created training to certify restaurant mangers so they understand the proper ways to protect against food-safety hazards.
Q: McDonald's, Boston Market and some other operators are having problems. Is there still room for growth in the industry?
A: We are projecting a 4 percent growth rate this year. We also know that, at this pace, we will need 3 million more employees by the year 2003 just to keep up. ...Some of the expansion in chain outlets in this country may slow. They'll look to new countries, Europe, Japan and different parts of the world that don't have all the saturation. But it's still a good time to get into the industry. More families are eating out. They want entertainment. But if you open a restaurant, before you make it a 100-unit chain or a 200-unit chain, give your concept an opportunity to prove itself and grow gradually. ... Some of the problems we've seen are in training. Restaurants open new outlets quickly and they don't have enough employees who are well-versed.
Q: Will the industry hit $400 billion in sales?
A: Absolutely. We'll get there within three or four years.