News Restaurant Sees Profits Triple After It Ditches Tipping

[brassmonkey]

hmmmmmm

It?s not exactly established economic theory, but what if you could triple your business?s profits by paying your employees more? That?s what one restaurant owner claims happened after he turned to a no-tipping policy at his restaurant, instead choosing to pay employees an annual wage.

Bobby Fry made headlines earlier this year when his restaurant, Bar Marco, decided to join the small but growing trend of restaurants that have decided to ditch tipping. Entrepreneur decided to check in to see how the restaurant owner was doing, and Fry says the results have been phenomenal. Since getting rid of tipping on April 1, profits have increased from about $3,000 a week to $9,000.

?Our water bill was cut in half, our linen bill was cut in half, our liquor inventory was lean,? Fry told Entrepreneur, crediting it all to greater employee cognizance. Employees have more on the line, too: Bar Marco?s new system cuts them into the profits as well. All workers now get a base salary of at least $35,000?plus health care, paid vacation and 500 shares in the company?but they also get bonuses. Because of his recent financial boom, Fry says salaries could end up between $48,000 and $51,000 this year.

Granted, Bar Marco made other changes as well, looking to offset some of the costs of having to better pay its staff. But not only are profits up, revenue is as well?around $7,000 more coming in per week.

Fry?s take on tipping is simple and logical. ?Whether it?s good service or bad service, people tend to tip the same amount,? he said, citing a Cornell professor?s findings. ?When you have bad service, you just don?t go back. So in reality, tipping hides how people actually feel.? Plus, Fry says how you pay your employees shows how you feel about your business. ?You cannot tell me that your business model relies on paying people below the poverty line,? he said. ?You gotta have more pride in your business than that.?

It will be interesting to see if stories like this will lead to more restaurants going tip-free. Though they might see major resistance from the calculator lobby.

https://www.yahoo.com/food/restauran...108634284.html

[CDSmith]

Originally Posted by brassmonkey

It will be interesting to see if stories like this will lead to more restaurants going tip-free.

Also keep an eye out for restaurants saying they are tip-free but then slapping a new 15 or 20% gratuity (aka: "service fee") onto every bill in lieu of those higher wages they're paying.

If we've learned anything from Kitchen Nightmares it's that some owners truly are clueless fuckheads.

[ravo]

Interesting.

But the restaurant made more changes than just a "no tipping" policy. I'd guess that if the owner did all the other changes (employee shares, profit sharing, health insurance, etc.) and KEPT tipping, the performance change will still be the same. Just a thought...

[JD]

Less people getting heavy pours, extra fries, etc because the wait staff doesn't have to kiss your ass to put gas in their car via tips. I'm sure his costs will go down a lot too.

[Dead]

Simple, I pay for all health insurance, family too, and payroll taxes for all my employees. What I get in return is lowered tax on the business and a much better employee? This is common knowledge.

[mineistaken]

Originally Posted by ravo

Interesting.

But the restaurant made more changes than just a "no tipping" policy. I'd guess that if the owner did all the other changes (employee shares, profit sharing, health insurance, etc.) and KEPT tipping, the performance change will still be the same. Just a thought...

Would be interesting to know how did the numbers of clients change. I read just half of the article, sorry if that was mentioned there.
Did they attract more clients because of no tipping? I know many people not liking the procedure of tipping (not because of being cheap, but the procedure itself).

[L-Pink]

Unless he raised his prices and was grossly mismanaging his costs I'm calling bullshit on those numbers. You don't just raise employee costs by 30 plus grand for each person and make an extra 6 grand a week.

[kane]

Originally Posted by L-Pink

Unless he raised his prices and was grossly mismanaging his costs I'm calling bullshit on those numbers. You don't just raise employee costs by 30 plus grand for each person and make an extra 6 grand a week.

I'm guessing he raised prices because it says he " made other changes as well, looking to offset some of the costs of having to better pay its staff"

[Robbie]

Yeah, no way in hell that raising his cost of business by paying employees more suddenly gained him a huge increase in profit.

This is a "feel good" bullshit story that doesn't jibe with reality.

Suddenly his shitty employees became the best and most loyal in the world?

Bullshit. People in the bar and restaurant service industry (not fast food bullshit, but REAL service at a REAL restaurant) can make a ton of money with tips. Way more than his small pay raise.

I've been married to a girl who was a bartender. Back in 1982 she was making an average of $500 a day...in CASH (no taxes on that). And that $500 in 1982 is worth over $1,450 in 2015 value of the dollar.

My ex-wife would have been PISSED if they had given her some tiny ass "raise" and took away her tip money.

This bullshit story isn't based in the reality of the world.

[crockett]

Originally Posted by L-Pink

Unless he raised his prices and was grossly mismanaging his costs I'm calling bullshit on those numbers. You don't just raise employee costs by 30 plus grand for each person and make an extra 6 grand a week.

I'm betting he got a bunch of free publicity from his 1st article.. Now he's getting even more..

[brassmonkey]

Originally Posted by Robbie

Yeah, no way in hell that raising his cost of business by paying employees more suddenly gained him a huge increase in profit.

This is a "feel good" bullshit story that doesn't jibe with reality.

Suddenly his shitty employees became the best and most loyal in the world?

Bullshit. People in the bar and restaurant service industry (not fast food bullshit, but REAL service at a REAL restaurant) can make a ton of money with tips. Way more than his small pay raise.

I've been married to a girl who was a bartender. Back in 1982 she was making an average of $500 a day...in CASH (no taxes on that). And that $500 in 1982 is worth over $1,450 in 2015 value of the dollar.

My ex-wife would have been PISSED if they had given her some tiny ass "raise" and took away her tip money.

This bullshit story isn't based in the reality of the world.

thanx robbie! you flew down and looked things over!

[L-Pink]

"Our water bill was cut in half, our linen bill was cut in half"

So business increases but you wash less dishes and clean half the napkins and table cloths you did before you gave waiters a salary? That makes zero sense.

[Robbie]

Originally Posted by brassmonkey

thanx robbie! you flew down and looked things over!

No, I just live in the real world.

It's amazing how many people out there don't understand how to make money and would even believe such a ridiculous story.
I guess it makes it easy for people like me to walk right past them in the game of life.

[Robbie]

Originally Posted by L-Pink

"Our water bill was cut in half, our linen bill was cut in half"

So business increases but you wash less dishes and clean half the napkins and table cloths you did before you gave waiters a salary? That makes zero sense.

I think what they are trying to make you believe is that the employees didn't give a shit back when they were making good money with tips.
So they would let the water run longer than it needed to and didn't care about keeping things clean in the first place.

But NOW...that the EVIL business owner has seen the error of his ways and increased their pay?
NOW, they care and actually do their fucking jobs the right way.

Me? I would fire every one of their worthless asses for being shitty employees in the first place. People are waiting in line to get a job these days. So replacing these slack fucks would be no problem.

[brassmonkey]

Originally Posted by Robbie

No, I just live in the real world.

It's amazing how many people out there don't understand how to make money and would even believe such a ridiculous story.
I guess it makes it easy for people like me to walk right past them in the game of life.

tips are bullshit! if you give too little people complain! then they set the bar for how much to pay! its setup like church now give 20% or you're an asshole!

[RandyRandy]

Read the full article, took out my calculator and verified this story is 100% bullshit. Incredible that none of the writers (there are many articles on this) did the same. If you are paying all 26 of your employees a minimum of $35,000 a year, that comes out to 17,500 a week, which is more than 50% of his published sales. This DOESN'T include the bonuses, two-week paid vacations, shares in the company, etc.

He got good publicity out of it, but there's no way these numbers are real.

[RandyRandy]

double post - sorry

[Captain Kawaii]

Yahoo loves a good fake news story if it pushes their agenda...

[Robbie]

Originally Posted by brassmonkey

tips are bullshit! if you give too little people complain! then they set the bar for how much to pay! its setup like church now give 20% or you're an asshole!

Have you ever been close to anyone who makes tips?
Yeah, I'm sure that plenty of incompetent people are unsuccessful at working for tips...but there's always a big percentage of people who are incompetent at every job out there.

But the people who kick ass in the service industry? You try to put them on a salary and take away their tips and they would revolt.
A great bartender or waitress makes GREAT cash money because they are damn good at taking care of the customers.

I suppose that slack asses like this guys employees...would look at making the reliable paycheck as "better" than having to earn their tips.

But the good workers in the service industry make a LOT of money in tips. They would NEVER want a pay raise and no tips.

This is obvious "big govt." horseshit that is being spread so that the IRS can get it's greedy hands on more money.
People making tips in cash don't declare all their tips...just enough to keep the feds off their asses. But take those tips away from them and then they are on a shit salary and getting their money TAKEN from them before they even get their shitty check at the end of the week.

I'm telling you...real service industry people would never want to give up their tips and take a salary. And if they were forced to, I guarantee you that they would not be doing a "better" job like this fairytale story tries to make us believe.

[TeenCat]

lol is it april today? what an idiotic idea and absurd results the most idiotic promotion i have seen so far, enjoy your five minutes of glory, mr bobby dick ...

[TeenCat]

not talking about poor employees ...