Monthly Archives: January 2013

Update On Privatization In Pennsylvania

The Pennsylvania Restaurant & Lodging Association has provided an update regarding Governor Corbett’s’s proposal.  Here’s an excerpt from the PRLA announcement;

“Gov. Corbett announced his proposal to privatize wine and spirit sales in Pennsylvania. This is the first time the Corbett administration has taken the lead on a proposal. The Pennsylvania Restaurant & Lodging Association has been actively engaged on this issue and will continue to do so as the legislative process moves forward.

The proposal is expected to contain the following:

  • Full privatization of wholesale and retail.
  • Wholesale will be brokered by brand, with a valuation formula used to determine the cost of each brand item.
  • The holder of a wholesale license will distribute the brands statewide.
  • Creation of five retail licenses:
  1. Wine & spirits retail license:  1,200 total licenses. The licenses will be auctioned, and each county will have at minimum the same number of retail licenses as current wine & spirits shops.
  2. Big box stores (Costco, Walmart, etc.): They will be able to sell unlimited cases of beer and up to 6 bottles of wine per transaction.
  3. Grocery store (Giant, Wegman’s, etc.): They will be able to sell two 6-packs and up to 6 bottles of wine.
  4. Pharmacy (Rite-Aid, Walgreen’s, etc.): They will be able to sell one 6-pack and up to 6 bottles of wine.
  5. Convenience Store (Sheetz etc.): They will be able to sell one 6-pack.
  • Wine & spirits licenses are limited to 1,200.  The other four licenses are application-based with no set limit.
  • Beer distributors will have the ability to enhance their license to sell wine.      They would also be able to purchase a wine and spirits retail license and      sell down to a mixed 6-pack.
  • Restaurants and hotels will be able to sell 6 bottles of wine for no additional fee, and up to a 30-pack for an annual fee.”

I will continue to monitor this issue as it moves forward.

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Filed under In The News, Restaurant & Hospitality Law

Affordable Care Act Update

Reliable sources announce that the DOL is expected to delay the March 1, 2013 Exchange Notice deadline. This delay is welcome news for employers!! By way of background, in 2013, employers will be required to provide employees with notices of their options regarding the Affordable Care Act health care exchanges. However, given the significant challenges establishing the ACA exchanges, much of the information that employers are to provide is not yet available. Once formal guidance is received, I will share the new deadline.

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Filed under Advertising & Franchise Law, Franchisors & Obamacare, In The News, Restaurant & Hospitality Law, The Franchise Legislation Monitor

PA Liquor Control Board (PLCB) Privatization Update

As some of you know, I sit on the Board of The Pennsylvania Restaurant and Lodging Association, Brandywine Chapter.  The PRLA continues to keep a close eye on the developments regarding the privatization of wine and spirit sales in Pennsylvania.  Here is their latest update;

The legislature is shifting from talks of privatizing the state liquor store system to discussions to modernize the system. The Pennsylvania Liquor Control Board’s (PLCB) modernization proposals are being considered as an attempt to increase revenue until a privatization decision can be made. One of these initiatives, a request for flexible pricing would have a serious impact on licensees in the state. This ability would allow the PLCB to lower its standard 30 percent mark-up on some products and raise the mark-up on others. PRLA is working to ensure that the PLCB cannot adjust prices at random in a way that could negatively impact licensees in the state.  Governor Corbett continues to develop a privatization proposal that will be presented to the legislature before his February 5 budget address. While the PRLA is aware of many details in the plan, a final proposal has not yet been developed and PRLA will not consider support until language is shared.

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Filed under In The News, Restaurant & Hospitality Law

Notifying Employees About Health Benefit Exchange Begins March 1

The new health care law amends the Fair Labor Standards Act to require that employers provide all new hires and current employees with a written notice about the health benefit Exchange and some of the consequences if an employee decides to purchase a qualified health plan through the exchange in lieu of employer–sponsored coverage. This disclosure requirement is effective for employers beginning on March 1, 2013.  Employees hired on or after the effective date (March 1, 2013) must be provided the Notice of Exchange at the time of hire.  The Labor Department has indicated it will issue guidance and a template about how the information must be provided.

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Filed under Franchisors & Obamacare

Restaurant Franchising – Looking Ahead To 2013

The restaurant category is one of the largest segments in franchising.  While QSR (quick serve restaurants) is the dominant type of restaurant franchise, full service and fast casual concepts continue to grow.  The National Restaurant Association (NRA) predicts that 2013 will see moderate growth in the industry, approximately 3.8% over 2012, despite rising commodity prices, high unemployment and gloomy consumer confidence.  But growth is growth and these days, we’ll take it.  Even with the moderate growth predicted for 2013, the NRA estimates that the restaurant industry will be one of the major job creators in the U.S., outpacing average employment percentages.  In fact, the industry is the nation’s second largest private sector employer.

A major challenge both franchise and non-franchise restaurant operators will face are the additional layers of regulation they will see in 2013.  From new employment laws in California to the implementation of President Obama’s health care law, operational costs will necessarily increase, making profit margins even tighter.  The good news, according the NRA, is that consumers continue to want to eat out more often.  The challenge for the restaurant operator is how to wade through the legal morass, which varies from state to state.  The ability to deliver great value to the consumer while remaining mean and lean in this economy will test the mettle of this industry like never before.

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Filed under In The News, Restaurant & Hospitality Law