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Restaurants Unlimited drops labor surcharge

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Restaurants Unlimited’s experiment with letting customers know exactly why they were charged more for a meal this month may have worked too well. Customers noted the breakout on tabs of a 1% surcharge to cover mandated increases in the minimum wage, but reacted so vehemently that the multiconcept operator has rescinded it.

It’s not clear if RUI will offset higher labor costs by adjusting prices, or take a hit to margins.

The company has indicated that it will not cut the staff’s hours to offset rising wages. That option was considered and rejected before the operator adopted the surcharge roughly two weeks ago, CEO Jim Eschweiler said in a press release.

RUI operates in 10 states, with a concentration of restaurants in the Pacific Northwest. One of its biggest trade areas, Oregon, raised its minimum wage on July 1 to $9.75 in the Portland area and $9.50 elsewhere, from a previous level of $9.25.

A law passed earlier this year will hike the minimum wage to $13.50 by July 1, 2022. The level will then be adjusted in accordance with changes in the cost of living.

RUI’s concepts include Palomino, Kincaid’s and Henry’s Tavern. The company is owned by Sun Capital.

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