Papa John's Reputation Tanks After CEO Criticizes Obamacare, Contemplates Cutting Workers' Hours

Apparently, threatening to reduce employee hours and fire workers rather than offer them better healthcare coverage doesn't go over well with the public.

That the lesson Papa John's pizza company CEO John Schnatter learned after he complained about Obamacare costs shortly after Election Day.

Schnatter didn't just complain; he threatened to pass any extra costs from the healthcare law onto his customers, raising the price of each pizza by about 15 cents. He also said he'd cut hours for his employees to keep them under 30 hours per week. The law mandates coverage for employees who work more than that.

Response from the public was resounding.

Schnatter basically told the world that he could provide health coverage for all his employees for a measly 15 cents per pizza, but he didn't and he wouldn't. Many people would gladly have been paying more for their cheap pizza fix if it meant the people who made it would live better lives.

The inevitable boycott followed, and the reputation of Papa John's tanked.

According to the YouGov BrandIndex, positive perceptions of Papa Johns hit a high of 32 on Election Day. Then Schnatter spoke up. A month later, the chain's score ha dropped to 4.

And Schnatter isn't the only CEO to put his foot in his mouth. Zane Terkel, one of the largest franchisees of Applebee's locations said he would stop hiring workers and building restaurants because of the healthcare law. Before his comments, Applebee's rated 35. Now the entire company's reputations has suffered, falling to 5.

Darden Restaurants, which owns the Olive Garden and Red Lobster, also declared its intention to cut back on workers' hours because of Obamacare, and they've just lowered their profit projections for the last quarter.

However, John Metz, who runs 40 Denny's locations, found that quick backpedaling and profuse apologies can mollify the public. He said he'd start adding a 5 percent "Obamacare surcharge" to customers' bills and reduce employee hours. Public perception soured and Metz apologized a few days later. After a big dip this month, Denny's posted a score nearly as high as before Metz opened his mouth.