Financing

Is tipping at the tipping point?

tip dish large

It’s been about a year since Union Square Hospitality Group’s President and CEO Danny Meyer started implementing his no-tipping policy as a new mode of compensation. Tom Colicchio—owner of Craft, Craftsteak and others—was among the other restaurateurs who embraced the idea. But at this point, few others on the Top 100 list have.

“It’s an interesting idea,” says Michael Jacobs, partner at Corner Table Restaurants in New York City. “I understand what Danny’s trying to do, but I firmly believe the American consumer is not ready to adopt that component. In certain circumstances, it works. But we don’t foresee any changeover to a no-tipping policy in our business, just based on the way menu pricing will have to fall out afterwards. If we’re looking to be a value-oriented casual brasserie, I can’t have a $30 burger. Whether you’re going to tip or not, I think what the guest perceives is that it’s a $30 burger, not a $20 burger that includes a tip.”

Quality Branded founder and President Michael Stillman believes that there’s a global transition in the way people are being paid in restaurants, and it’s been coming for quite some time. It’s not without good reason, he says:  There’s definitely an imbalance between front-of-house and back-of-house service staff. “As I talk to restaurateurs, they believe the system is disjointed and there needs to be some sort of new model. But I think no one is sure what that is. We don’t want to hurt our front-of-house staff either.”

Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.

Multimedia

Exclusive Content

Operations

Should Cracker Barrel get out of the gift shop business?

Reality Check: The retail component of the family dining concept drew off sales and profits during the brand's most recent quarter. Maybe it's time to leave the shops out of future Cracker Barrels.

Financing

Wendy's, whose chairman is an activist, may be getting an activist

The Bottom Line: Activist investor Blackwells apparently plans to nominate “several directors” to the burger chain’s board, according to Reuters.

Financing

Yes, there is such a thing as too fast in the quick-service world

The Bottom Line: In a world of digital orders and drive-thrus, friendly service actually matters more than speed.

Trending

More from our partners