NRA Show 2016 Recap – The Tipping Point

For all those people we saw this week in Chicago at NRA Show 2016, it was great to see you!  For those who couldn’t make it, we put together a quick recap of the show.

Tipping Point: Experts Debate Gratuity Structures

On Saturday, May 21, Jim Coyle led an educational session in front of a packed house titled “Tipping Point: Experts Debate Gratuity Structures,” in which the panelists examined the new industry trend of eliminating tips.

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On the panel for the discussion were three world-renowned industry experts. Sarah Lockyer is Editor-in-Chief of Nation’s Restaurant News, the foodservice industry’s most influential media brand. She also serves as Executive Director of Content for the Penton Restaurant Group, which includes NRN sister publications Restaurant Hospitality and Food Management.

Brett Traussi is Chief Operating Officer of The Dinex Group, Chef Daniel Boulud’s restaurant ownership and management company. He is a vital part of the Dinex Group’s success, overseeing management of the organization’s 18 restaurants on three continents.

Dan Rosenthal has been in the restaurant business nearly 50 years and is President of the Rosenthal Group of seven restaurants in Chicago, including Trattoria No.10, 5 Sopraffina Marketcaffès, and Poag Mahone’s. He is also the founder of the Green Chicago Restaurant Coalition and currently serves as Chairman of its Sustainable Meat Committee.

Restaurateurs Need Advanced Degrees in Math

If operators are collecting and disbursing tips under any scenario, then they need to be extremely careful about allocations and take into account tip-credits, how much the staff interact with guests, and overtime implications.

One Size Doesn’t Fit Anything

During the Q&A it was clear that operators were seeking ‘best practices’ or formulas for tip pools for their restaurants. Hats off to Brett Traussi for clearly and concisely explaining what Dinex does at their 18 restaurants. In a nutshell, look at the local laws first, draw up a plan, consult an attorney, and get staff buy-in.  There is no industry-formula for disbursing to bussers, runners, hosts, bartenders and/or BOH staff.

Restaurateurs are Raw

Many on the panel felt that while BOH and FOH pay imbalance needs correcting, the issue was just more fodder for the plaintiff bar. Already battle-weary from constant compliance, ever-changing wage laws, and government actions against small business, even those who want to do the right thing, see it as a risk.

Customers Aren’t Always Right

Dan Rosenthal made a very strong statement that he thinks that when customers leave a tip, they have NO IDEA where those funds go. Our ad-hoc research shows he is right.  Dan posits that the very first step is to educate the public about tipping so that restaurant policies don’t unravel into PR nightmares.

What’s Old is New

Gosh, even with all these headwinds, anyone in the room can take a lot of pride that the restaurant industry remains a ‘people-first’ calling or vocation if you will. I left feeling very proud to be part of an industry that really cares about customers and their employees.

Coyle introduced its recent 2016 study on customer opinions on tipping. Here are the summary results.

COYLE Tipping SESSION 3 COYLE Tipping SESSION 2 COYLE Tipping SESSION

 

We will post a link to the audio recording of the session when it becomes available.

To learn more about Coyle’s restaurant market research, contact us.

© 2018 Coyle Hospitality Group 2016. Reproduction of any material without written authorization is strictly prohibited.

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