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Article on tipping out from The Orlando Sentinel

Waiters can keep the change – but not all of it

By Sandra Pedicini, Orlando Sentinel

12:28 a.m. EDT, March 14, 2011

When you leave your waiter or waitress a tip, chances are they don’t keep all of it.

It’s common in the restaurant industry for servers to share part of their tips with other workers, sometimes voluntarily, but often because they have to.

But many workers have balked at what they describe as unfair tip-sharing policies, and some have sued. Starbucks, Chili’s, Outback Steakhouse and Orlando-based Hard Rock Café International are among companies that have faced lawsuits.

Restaurant workers often depend heavily on tips because in many states, employers can take “tip credits” and pay regularly tipped employees less than minimum wage — in Florida, as little as $4.23 per hour.

Read the rest of the article here:

http://www.orlandosentinel.com/business/os-law-and-you-tip-sharing-20110313,0,1299262.story

Tipping out is something that most waiters grudgingly tolerate. Afterall, we are told upfront what we are required to tip out. Problems generally occur when tipout policies change, and several companies who have changed their policies are discussed in the article, mainly because their staff went to court against them.

In states where there is no “tip credit”, i.e. hourly wage is at least minimum wage such as Oregon, there really aren’t too many restrictions that can be made to the tipout. Kitchen personnel are often part of the tip pool in those states. In states that have a tip credit, or allow sub-minimum wage, tipouts are restricted to personnel who directly serve the public.

As much as I respect the work that line cooks and dishwashers do, I’m against the mandatory sharing of tips with them. Their positions are production positions and they are paid a commensurate hourly wage. While they generally make less than waiters overall, they also get raises periodically and have the benefit of a steady and predictable income. And, while generosity is a good thing, I also don’t like the idea of voluntarily sharing tips with them, only because it sets up the possibility of unfair delivery of the food. It’s only human nature to wash the hand that feeds you and it feels a bit like extortion to be forced to pay to get your food in the order that it was sent to the kitchen, or to have someone who’s greasing the kitchen get a better plate than someone who isn’t.  Having said that, if a waiter ever goes out for drinks with a kitchen person, I feel like they should buy at least a couple of drinks for the kitchen person, if not pick up their tab. After all, it’s a fact that waiters generally make more money than kitchen personnel. And they work very hard under hot and dirty conditions. Of course, they are doing what they want to be doing and many of them are working toward the goal of being a chef one day. Waiters really don’t have any upward mobility in their profession, except to work at another restaurant that offers a higher tip income.

Most tipouts take between 15 – 40% of a waiter’s tips. The average that I’ve seen is more like 25 – 35%. Many waiters, including myself, usually grease our backwaiters a little extra as well.

Tipouts can be done two ways – they can be based on sales or they can be based on tips. My current job is the first that I’ve had that has based it on tips, and I definitely prefer that way. That way, everyone benefits or suffers from how well the guest pool has tipped. With sales, you’re stuck at a percentage regardless of how great or poor the overall tip percentage has been. I guess I understand the idea behind tipping on sales. You don’t want the possibility of a waiter hiding cash tips from his or her support staff. But I highly encourage restaurants to consider basing the tipout percentage on tips, not sales. It’s a much fairer system. A waiter can’t complain that they’re tipping out on a stiff.

Anyway, I’ve discussed tipout in the past. If you want to revisit the topic, go here:

https://teleburst.wordpress.com/2009/06/15/tipout-pt-1/

https://teleburst.wordpress.com/2009/06/16/tipout-pt-2/

https://teleburst.wordpress.com/2009/06/17/tipout-pt-3/

One bit of disturbing “news”, if you will; something that was discussed in pt. 2. The Department of Labor used to have “fact sheets” on how tipped employees are treated. Those fact sheets have disappeared from the DoL website. Here is what it said about tipping out:

“Tip Pooling: The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), busboys/girls and service bartenders. Tipped employees may not be required to share their tips with employees who have not customarily and regularly participated in tip pooling arrangements, such as dishwashers, cooks, chefs, and janitors. Only those tips that are in excess of tips used for the tip credit may be taken for a pool. Tipped employees cannot be required to contribute a greater percentage of their tips than is customary and reasonable”.

I don’t know if they have just changed the website and haven’t added the old worksheets back in, or whether because of states like Oregon that specifically allow kitchen employees to share in the tip pool, they can no longer make that statement. And, with other court rulings that have impacted on tipouts, perhaps the governance of tipouts is in flux now. Therefore, it’s best to discuss with your local Wage and Hour people or with a local attorney that specializes in labor law what the current thinking on tipouts is if you have concerns about how your tipouts are being handled.

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Some positive restaurant industry news from Nation’s Restaurant News’ Breaking News

10 trends to watch in 4Q reports

Restaurants expected to outline higher sales, future price hikes

January 21, 2011 | By Mark Brandau

Fourth-quarter earnings season kicks into full swing next week, and many restaurant companies are expected to report improving sales and profit, said restaurant securities analyst Jeffrey Bernstein of Barclays Capital.

Restaurants also are likely to discuss plans to raise menu prices in 2011 to combat increased commodity costs, he said in a research note Friday.

Bernstein listed 10 items to watch as companies report final results for 2010:

Catch those 10 items, several of which bode well for waiters in all niches here: http://www.nrn.com/article/10-trends-watch-4q-reports?ad=news#ixzz1BmLeXd4S

Brand refresh

Any Doctor Who fans in the house?

I was re-watching a couple of the new season and was reminded that the (new) series always refreshes the opening title sequence slightly. I’m actually old enough to remember Tom Baker as perhaps the most famous Doctor Who of all time – the doctor from the mid-70s (he’s the iconic one, all tweedy and wild curly hair and the trademark scarves).

For those of you unfamiliar with Doctor Who, it’s a venerable BBC series that has been around since the early 60s and ran until 1989, when it went dormant.  In 2005, it was revived, bringing happiness to those who grew up with the series.

Doctor Who is a Timelord. He looks human but is actually a separate species with two hearts and one very advanced brain and an immune system to die for (basically, as long as certain conditions are met, he can’t die, but he is “regenerated”, complete with a new body and face. His last name isn’t Who. We don’t know his name. He’s just the Doctor. Doctor Who gives the writers plenty of opportunity for clever wordplay when someone is first introduced to him – “Doctor WHO”? “No, just The Doctor”.

This regeneration is a very clever conceit by the producers as it allows them to bring in a new actor to play the part. There have been 11 “Doctors” since the story began (12 if you count a guy who thought he was the Doctor because he had absorbed all of the information about the Doctor – of course, he was just a human, but it made for an interesting Christmas episode and starred the always charming David Morrissey as the misguided Victorian with a balloon replacing the Doctor’s famous TARDIS and a wooden version of the famed “Sonic Screwdriver”, the Doctor’s only “weapon” besides his brain and wits.

Why am I going off on a fanboy’s idolization of Dr. Who?

Because it illustrates the difference between a brand refresh and a re-branding.

The Doctor Who title sequence/theme song has been basically the same since the beginning. However, each season (at least for the 3 renewal seasons and certainly for some of the original series), there is a slight difference in the graphics and the theme song. this would be a “refresh”. It doesn’t change the basic nature of the title sequence but it “modernizes” it or provides a difference to delineate it from the preceding season.

However, when Dr. Who regenerates, it’s like a “re-branding”. The face is totally changed. The new actor brings his own quirks, characteristics and cadence to the role. The first Doctor in the revival seasons was a bit dark (Christopher Eccleston), the second more playful but full of power, intense and is judgmental at times (Scottish actor, David Tennant) and the new Doctor seems to have a more childlike and buoyant personality (Matt Smith). However, many of the basic personality traits of the Doctor’s own quirks are preserved.

This is the mark of a successful rebranding. Sometimes the slate is wiped clean and the restaurant takes an entirely new direction and flavor. But generally, when you rebrand, you want to retain a link to the past. You want to keep the basic character of the restaurant that has been developed over time, and you don’t shift from one concept to another (a Mexican restaurant goes to Italian, for instance). Usually shifting concepts or market niches occurs when a restaurant is sold to another who wants to turn it into a brand new restaurant.

Many, if not most rebrandings take the idea of rebranding literally. They change the name, the decor and the product mix. However, they tend to try to retain a lot of the things that made the previous brand strong while bringing the restaurant into a new era. The Houston’s rebranding to Hillstone is a good example:

 http://www.nrn.com/article/hillstone-restaurant-group-rebranding-houstons-units

They aren’t moving up or down market – they are trying to create a mental link with a more local and seasonal-type menu and  insulate themselves from the image of being a “chain” (Houston’s is a venerable brand but is seen as just another mass-market chain in a sea of mass-market chains). This is always fraught with danger, especially when you tamper with a chain that has seen massive success and is perceived as a restaurant that provides a certain level of consistent quality. Houston’s is leveraging this danger by not converting all of its units to Hillstone. There will still be Houston’s in certain places, but I suspect that if the rebranding is successful, the Houston’s brand will eventually disappear from the face of the Earth.

On the other hand, you have what I would term a “refresh”. Three years ago, Ruby Tuesday’s “rebranded” but I think that  it was really closer to a refreshing. the name only changed by removing “Bar and Grill” from the title. One could argue that, by moving upmarket with some pricier items, this was a rebranding, but I don’t think that they did a substantial change to decor (this had already occurred. They kept most of what was good about the restaurant (the salad bar, the upscale bar food like premium burgers, etc.) and tried to push check averages up and attract a slightly more affluent crowd.

So why would I term this a refresh and what is a refresh? In my mind, a refresh is when you retain more of the original concept. Instead of going up or down market, you introduce aspects of those markets which you haven’t really captured. For instance, a trend in steakhouses is to incorporate value meals, prix fixe specials, more modern drink offerings, etc. Another restaurant might revamp their platewear, plate presentation, do a dining room remodel, expand a wine list and premium liquor brands or offer only premium brands as their well brands. They might design a new logo. They might aggressively seek to-go and meal replacement business. One of the most common refresh items is the uniform. It’s relative cheap and can give the impression of a freshened decor without doing a lot of demolition.

One example of a refresh that appears to have possibility for success is the Palm Steakhouse. I have a friend who is a long-time regular in one of the East Coast restaurants who pointed me to their new website. Having been to the previous website when doing posts on other subjects in the past, I knew that it was in desperate need of renovation. It was ugly, unwieldy and not particularly informative or evocative. It was basically a placeholder. However, the new website has a timeless sort of look that reflects the heritage of the long-standing restaurant chain (which, oddly enough is still privately owned). It has a burnished look that fits the decor (sort of a men’s clubby look that doesn’t seem or feel ‘exclusive”). digging deeper, I found this statement from Libretto, the company which worked on the redesign:

September 2010 – Libretto is pleased to announce the launch of the redesigned Palm Restaurant website. Libretto and Korn Design were engaged by The Palm to revitalize the classic American steakhouse’s brand, messaging, and website. During an extensive discovery process, the two firms worked closely with The Palm to surface and reinterpret the authentic brand attributes that distinguished the restaurant prior to its national expansion. Libretto then developed new messaging and Web content to support The Palm’s polished identity. The resulting site features clear navigation, engaging content, and a vibrant mix of contemporary and historic photos.

Clearly, they didn’t throw the baby out with the bathwater. They focused on the heritage of the 80+ year old restaurant and did a virtual steam cleaning which didn’t alter the character or the restaurant but made it sparkle.

Here’s the new website:

http://www.thepalm.com/

There are moving parts without it being distracting. There are multigenerational shots, showing younger and older people enjoying dining together. There is a requisite number of trendy ear-length closely cropped sideburns and more than a fair share of modern pricey eyewear while retaining more than a few receding hairlines, pin-striped suits and grey haired, well-tended older types as well. This seem quite intentional. The Palm is known for having an older clientele and so, it would seem incumbent on them to try to steal market share from hipper, more trendy expensive restaurants. There’s enough food porn to caress the eye and the site is fairly logically laid-out and easy to negotiate.

My friend wasn’t too specific but she implied that there were going to be some menu refreshes as well as some changes in presentation. She said that she actually went to one of the restaurants that has started the change and was pleasantly surprised. She said that the plates had changed but didn’t get too specific about any other changes.

I tried to find a cached version of the old website but didn’t have any success. Trust me when I say that it was bleak. I can’t really comment on whether or not the menu needs refreshing as I’ve never dined out there (it’s a bit out of my price range). Having reported on some of their menu changes, I’ve seen their menu and it seems fairly old-school, so perhaps it could stand to move forward a little. But they are quite successful and have been since the 20s, so I suspect that, as with their website, they will update without losing touch with what has made them the hit that they have been.

The Palm isn’t the only steakhouse to refresh. They’ve all done it during this time of economic crisis. whether it’s offering bar food specials or bundled meals for lesser prices, look for more, not less of this sort of refresh. Other restaurant routinely tweak their product yearly, sometimes doing enough to call it an actual refresh or, more often, just doing enough to call it a tweak. People like familiarity, but they also don’t want to eat in a stale environment. they need just enough change to make them feel like they’re eating in a newly-scrubbed dining room with a modern menu. 

Man, all of this from watching Doctor Who.

One thing though, BBC producers, don’t you think it’s time for a female Doctor? 

From the Palm website.

Analyst optimistic about restaurant growth

From Nation’s Restaurant News:

Improved sales expected in next round of restaurant earnings

Analyst: Chains still face higher commodity prices and shaky consumer confidence

October 6, 2010

Mark Brandau

While commodity price inflation looms on the horizon and the Consumer Confidence Index has retreated to its lowest level since February, Morgan Keegan analysts Robert Derrington, Destin Tompkins and Joe Drake think recent improving same-store sales at 15 of the restaurant companies the firm tracks should continue this quarter and into 2011.

Read the rest of the article here:

http://www.nrn.com/article/improved-sales-expected-next-round-restaurant-earnings

Restaurants go to the dogs in Nashville

In a new trend, restaurants are allowing dogs to accompany their owners on selected restaurant  patios in Nashville. This isn’t a new thing for me to experience, as it’s quite common in Europe for patrons to bring their dogs with them in restaurants. It’s probably even pretty common to have al fresco Fido dining in other parts of the country. But it’s a pretty new thing here.

Due to health codes, it will probably always be forbidden for dogs to come in the dining room (with the exception of dogs for the disabled). Personally, I think it’s a shame, but, to be honest, some guests probably wouldn’t have the sense not to bring a dog unless it was totally comfortable with lying still for a couple of hours at the foot of its owner. Look at the problems we have with children sometimes!

http://www.tennessean.com/article/20100826/FEATURES01/8260302/Dog-friendly-restaurants-welcome-all-to-dinner

Occasionally, I’ve seen people sneak their tiny dogs in a large purse. Happened just a couple of months ago. Back when I was managing a restaurant, we had a homeless-looking guy sitting at the bar who had a red squirrel under his coat. I thought to myself, “Hmmmm, now we have a new soup of the day”.

 

I ordered my peanut MEDIUM RARE! I want to see your manager RIGHT NOW!

 If you have this image as your wallpaper, then I’m worried about you. However, if you don’t have this as your wallpaper and desperately crave it, then, by all means, go here, the source of the photo:

http://www.1280x1024desktopwallpapers.com/1280x1024wallpapers-animals.php

Personally, I have a photo of a Patagonian Toothfish (aka sea bass) as my wallpaper. No lie! But let me tell you, it ain’t warm and fuzzy:

Blind waiters and dining in the dark

This interesting story about a restaurant where the waiters are blind and diners dine in the dark:

http://abcnews.go.com/Travel/blind-waiters-serve-diners-dark-restaurant/story?id=11431202

What an intriguing idea!

And yet, not all news is positive for the restaurant industry

Restaurant operators’ optimism wanes

NRA’s Restaurant Performance Index slips in June

July 30, 2010 | By Paul Frumkin

Restaurant operators appear to be less optimistic about their future prospects, which contributed to a decline in the National Restaurant Association’s Restaurant Performance Index for the third consecutive month.

The RPI fell to 99.5 in June, a decline of 0.3 percent from May and the lowest level since February, according to the NRA. It also marks the second consecutive month the RPI has stood below 100, which reflects contraction in the monthly index of key foodservice industry indicators.

Read the rest of the article here:

http://www.nrn.com/article/restaurant-operators-optimism-wanes?ad=news

Positive news on the high-end front

From Nation’s Restaurant New’s Breaking News

High-end restaurant chains say business, travel spending up

August 3, 2010 | By Molly Gise, Lisa Jennings

The return of business travel and conventions is driving traffic at fine-dining chains, many of which have recently reported positive same-store sales after suffering from empty dining rooms during the recession.

While steakhouse chains including Morton’s, Ruth’s Chris and The Capital Grille have taken advantage of the increased spending among their core markets, the high-end seafood chain McCormick & Schmick’s says it has suffered from the Gulf oil spill, which has kept consumers away.

Read the rest of the article here:

http://www.nrn.com/article/high-end-restaurant-chains-say-business-travel-spending?ad=news

Restaurants sued over music copyrights

From Nation’s Restaurant News:

Restaurants sued over music copyrights
June 23, 2010 | By Elissa Elan

The American Society of Composers, Authors and Publishers, or ASCAP, filed 21 separate copyright infringement lawsuits against restaurants, bars and nightclubs in 13 states, officials for the music society said this week.

ASCAP alleged that each of the businesses it filed suit against either publicly performed the copyrighted music of ASCAP songwriters, composers and publishers without obtaining a license to do so, or did not pay the required licensing fees.

Read the rest of the article here:

http://www.nrn.com/article/restaurants-sued-over-music-copyrights

This isn’t a story that directly impacts waiters, but I thought it would be interesting background.

Most people don’t realize that if you play music in a public setting for commercial purposes, either prerecorded or live, royalties must be paid to both the artists and the songwriters.

Many restaurants use a canned music service and in those cases, the royalties are covered by the fee that the restaurant pays. But some restaurants either have live music or play music from their own sound systems. In those cases, royalties must be paid to organizations like BMI, ASCAP and SESAC.

And, trust me, those organizations send out representatives to make sure that royalties are paid.

So, if any bar or restaurant owners are reading this blog, you may want to make sure that you’re dotting the i’s and crossing the t’s. Royalty organizations are tightening the screws.

By the way, the same thing is true for broadcasting professional sports on TV.

Small is beautiful

I had to drop into the local WalMart Supercenter to pick something up the other day. I don’t shop at WalMart very often, mainly because of ideological reasons, so I was surprised to see that the store was changing drastically. They were still renovating but much of the work seemed to have been done.

I was surprised to see that the display aisles were now only around 6 feet high, whereas before they were at least 8 feet tall.

There seemed to be less merchandise as well, although this could be a function of the unfinished nature of of the redo. Not only did there seem to be less of each item, there seemed to be less total items. I wondered if this was a concrete manifestation of the economic crisis that we’ve been going through. It looked like a fairly drastic downsizing of the Supercenter.

This seems to be borne out by this CNN article:

http://money.cnn.com/2010/02/15/news/companies/walmart_dropping_brands/

When I left the store, I noticed that the Superstore signage had even been removed. Perhaps they’re just changing the signage and it will continue to be considered a “Supercenter”, but I wonder if it’s being “demoted”. They certainly don’t seem to be shrinking the square footage.

Doing some superficial browsing, it looks like WalMart is contracting a bit. In one case, they actually cut the size of the store in half. It doesn’t look like that’s going to be the case here, but it does look like there’s going to be a much smaller inventory and assortment.

I think that we’ll see the same forces at work in restaurants as well. I wonder how long it will be before we see restaurants that used to open units with 200 seats start redesigning their new units to be 150 seats (just to use a random example). I wonder how long it will be until menus start contracting the number of items on their menus. And I wonder how long it will be before we start seeing smaller staff (larger sections, fewer hosts/hostesses/fewer managers stretched with more hours, fewer kitchen employees consolidating more and more tasks, etc.)  In many states, there’s not much savings in cutting waiters that make $2.13 – $4/hr, but there could be some savings in reducing the number of server assistants, putting more burden on waiters in general.

I saw this happen at P.F. Chang’s about 3 years ago when they went from one Server Assistant for every two servers to a couple of SAs for the whole restaurant. They did it the right way though and shrunk each server’s section by 1 table and added an additional server (that’s 1 more server and 2 less SAs).. SAs made 4.50 an hour, so this was a net gain against payroll and probably didn’t affect service too much. but I can see some big corporate entity with less savvy trying to trim staff without taking the impact on service into consideration (Darden, I’m looking at you!).

This trend could trigger some realignment of a large chain’s strategy and could also impact the gross number of jobs available to waiters in general. It could have a benefit of making it more feasable for smaller independent restaurants to make a go of it. If restaurants in general get smaller, then, in the eyes of the average consumer, a smaller indie restaurant might be on more of an equal footing with the larger chains due to the general perception in the US that “bigger is better”. On the downside, it could make waiters’ jobs more difficult and it might make great service harder to give and get.

These are just some random thoughts triggered by a mundane shopping experience. If anyone has seen some manifestations of this trend, feel free to comment. Or if you have any thoughts on the matter, please weigh in.

Yes, that’s a restaurant under the striped blue awning.

Photo is from “Rene G” at the “lthforum” at  http://www.lthforum.com/bb/viewtopic.php?f=15&t=24958

It’s a “Chicago-based culinary chat site”.