Burgers and Free Enterprise

Oct. 1, 2014

“I believe that without free enterprise there can be no democracy.” –Dwight Eisenhower

Did you happen to catch the big uproar a month or so ago when Burger King announced it was merging with Tim Horton’s, the coffee and donut chain in Canada, and was planning to locate its corporate office in Toronto?

There was an immediate and deafening roar from the bowels of our society (or maybe it was a belch) protesting that Burger King was disloyal to America and had no business opting for a lower corporate tax rate. Tens of thousands threatened they would never eat another whopper! Alas, with everything going on with HAMAS, ISIS and immigration, just to name a few, we hardly need another crisis to deal with. Even the President offered his opinion that such a course of action by Burger King, called an “inversion” (moving to another country to partake of a better corporate income tax rate), was “unfair.”

It is surprising to me that many are up-in-arms with B-K when business has been making such a move for years if it is to their advantage. In reality, inversion is really nothing more than financial engineering and pharmaceuticals, which traditionally have been the big players in that arena. In the last 10 years alone, there have been 47 inversions and many more are in planning.

There’s another aspect of this “disloyalty to America” cry that is just a bit ironic. It seems like everyone considers Burger King to be as American as hot dogs and apple pie when, in fact, they have been owned by a Brazilian Fund since 2010, and with foreign ownership corporate relocation is common and is more about efficiency than tax avoidance. Perhaps those criticizing B-K, including the government, should do a little research before they run around bashing yet another business.

The last time I checked, we were still a free enterprise society and businesses were free to make decisions for the benefit of their company and stockholders. In the case of Burger King/Tim Horton, it will make them the third largest food chain with 18,000 restaurants in more than 100 countries, and their strategy is focused on allowing growth opportunities in a highly competitive market. The vast majority of their franchises remain in the U.S. and each is privately owned, paying federal, state and local taxes, employing local labor, buying food and services from local suppliers and, in general, being as loyal to the U.S. as any other business.

It’s not that I’m cynical or anything, but this whole scenario makes me wonder if the powers that be are not taking the opportunity to downgrade the fast food industry, which has almost single-handedly been portrayed as causing the obesity problem in our country. Is it possibly yet another attempt of a “nanny government” to entice society to only eat what is grown in the First Lady’s Garden? In the land of plenty where we are blessed to live, people big and small, thin or heavy are free to eat whatever they wish. If they eat too much it’s nobody’s fault but their own and they have to accept the responsibility. It’s not government’s place to put them on a diet.

In my thoughtful opinion every business, whether fast food, manufacturing, distribution or any other, has a singular responsibility to operate in an ethical manner. In exchange, they should be allowed to do business unburdened by excessive government regulations, the whims of special interest groups and unions, to make and retain the amount of profit commensurate with the risks they take, provide employment and careers according to their employees’ abilities, pay appropriate wages and be free to share the fruits of their success commensurate with the effort expended by all. And above all, it is not their responsibility to share their success with those who refuse to work, as some demand be done.

Ciao baby,
Don Frendberg

Don Frendberg is executive director of the HVACR Workforce Development Foundation and president of Phase 3 Insights. Contact him at 614/208-6801 or [email protected].