Joe’s Crab Shack will become the first national full-service chain to test a no-tipping policy, following in the footsteps of several prominent New York-based restaurants that ditched gratuity last month.
Restaurant Business reports that Joe’s parent company, Ignite Restaurant Group, actually began testing the no-tipping policy at just a few restaurants back in August, but now plans to expand it to all 113 locations in the U.S.
To make up for the lost gratuity, the company says it will implement a new set wage practice. Servers will now be paid at a rate starting at $14/hour based on their past performance.
And, of course, to generate the revenue needed for the new wages, the company is executing a 12% to 15% increase to the restaurant’s menu.
“We’re really leading in our industry with regards to national brand going out and testing this thing in a meaningful way,” Ignite CEO Ray Blanchette told investors last week. “So we want to be somewhat cautious.”
Blanchette says the new policy is expected to reduce staff turnover, improve service quality, and lower prices for customers who are typically more generous with their tipping.
Ignite expects the test to run until at least the end of the year, but they have no plans to extend it to the company’s other brand, sports bar Brick House.
Joe’s Crab Shack Chain Tries No-Tipping [Restaurant Business]
by Ashlee Kieler via Consumerist