David Chang is the owner of several restaurants around the country, employing over 1,000 servers. In a very recent broadcast Chang shared his views on the new no-tip restaurants. First and foremost, Chang wanted to make it clear that he doesn’t discourage a no-tip mandate in certain areas or for certain types of restaurants. The reason he has not adopted the idea in most of his locations is because he doesn’t see how he could work out the money situation in any other way than the way he does now. Chang especially has doubts for medium sized restaurants with only about 35 tables because he says the calculations just don’t add up.
When it comes to no-tip restaurants, Chang says “My fear is the medium-sized restaurant, from 50 to 75 seats. It’s just too hard to run, we might see the extinction of it. That could be a result of labor. You need a certain number of people to run a restaurant. I don’t know if the numbers are going to work.” Many servers in restaurant this size tend to agree with Chang. When servers who worked at a moderately priced sit down restaurant with about 50 tables were asked for their opinion on the no-tip restaurant, they stated they would need somewhere between 18 and 50 dollars a month if they were not receiving tips. This is too much for any sensible restaurant owner to pay their staff, and even on a 15 dollar a month salary cuts to training days, new employees and other important components of hiring will be affected. The employees themselves said that if they were not to receive tips they wouldn’t be motivated and service would go down.
Chang voices some very important truths about a no-tip wage in his podcast, which you can read more about on Restaurant Weekly. More…
