Billionaire restaurateur: Blame regulation for higher prices in San Francisco

Tilman Fertitta, CEO of Landry's, stars in CNBC's "Billion Dollar Buyer"
Nick Valinote | CNBC
Tilman Fertitta, CEO of Landry's, stars in CNBC's "Billion Dollar Buyer"

Donald Trump has pledged, both as a candidate and as President, to decrease regulation so as to make it easier for businesses to operate in the United States.

Self-made multi-billionaire and restaurateur Tilman Fertitta is eager to see Trump succeed in that effort. By way of illustrating how regulations hamper business growth, the star of CNBC's "Billion Dollar Buyer" points to the restaurants he owns in San Francisco, where he must charge more for the same dishes.

"All these states now are doing their own mandates," says Fertitta. "Why should the city of San Francisco be able to do absolutely whatever they want to do?"

San Francisco's city-wide Health Care Security Ordinance requires certain businesses to make payments toward their employees' healthcare coverage.

"Do you realize, all the restaurants in San Francisco, we all have an added charge?" says Fertitta. "We have a 3% or 4% or 5% add-on to the menu because they make us give all our employees full healthcare. We can't afford to do it."

It is left to a business' individual discretion whether to add a surcharge to prices to cover healthcare related costs, according to the city of San Francisco.

Fertitta got his start peeling shrimp in the back of his father's restaurant in Galveston, Texas, and launched his own restaurant business empire with a $6,000 loan from the bank. Today, the 59-year-old is worth almost $3 billion and has 60,000 employees.

"I feel like all states and cities should have to abide by what the federal government thinks instead of the whim of somebody that is elected for a couple of years," says Fertitta.

Trump has said that for every new federal regulation imposed, two will be eliminated. But while the President can sway federal regulations, he does not have direct control over local, city and state regulations, like the San Francisco healthcare law, for example.

Even though Trump doesn't have direct control over local regulations, he can still make a real impact, says Fertitta.

"He can affect a lot by appointing the right people to the National Labor Relations Board," says Fertitta. "Even though state and cities do their own mandates today, still, on a national level, whoever is running the Labor Department is going to have a huge effect."

See also:
Billionaire restaurateur: Trump is doing a great job

12 hard-earned life lessons from a self-made billionaire who started with a $6,000 loan

Self-made billionaire Tilman Fertitta shares his best advice for 20-somethings