Restaurants and the food business get a lot of exposure with amazing camera work and dazzling kitchen footage. But employees in the business are often unappreciated and underpaid.
Employees are always thankful to receive tip from customer tips since it adds a little extra over their often meager wages. Restaurants are stressful working conditions.
Unfortunately, many restaurants in the U.S. seem to rely on customers’ tips to add on their workers wages.
Except this San Francisco eatery.
The owners defy the status quo with their “tip-free” model. Their staff receive good pay, full benefits and a share of the restaurant’s profits.
Zazie went tip-free in 2015 when its second owner, Jennifer Piallat, took over. All Piallat had to do was increase menu prices by 20%.
The customers were fine with it.
“In fact, one customer said she expected sticker shock, but that the menu still looks reasonable,” she said.
The staff were beyond happy. When the no-tip arrangement was launched, they made anywhere from $15 to $20 an hour.
Servers received a 3% to 7% pay raise. Back-of-the-house staff got a huge 35% increase!
They now make anywhere from $30 to $65 per hour. Then 25% of each item on the menu is given to the employees as a revenue share.
“Our staff are treated like adults, with ‘real jobs,’” Piallat explained. “Our labor costs are much higher than most restaurants, but our food cost/loss is much lower, so our profits end up higher.”
“More mature, long-term staff waste less food, make less mistakes, are less likely to steal, and can handle bigger sections.”
Piallat is able offer all employees paid sick and vacation leaves as a result. Staff have health and dental insurance, paid maternity or paternity leave, and a 401(k) with a four percent employer match.
“The only person losing money is me,” she joked. “My accountant doesn’t like it, but I didn’t want to risk anyone being dissatisfied.”
Piallat believes in complete transparency. She posts a spreadsheet with all the necessary numbers so everybody sees what’s going on.
Three of Zazie’s long-time workers went on to become part-owners of the French eatery thanks to this system.
In January 2020, Piallat sold Zazie to a server, the executive chef, and the general manager. The three employees had 50 years of experience at the restaurant.
Piallat owns 25% of the business now.
Zazie’s owners are hoping to carry its “no-tipping” legacy to the future. If employees are happy, business gets better.
Zazie did well even during the pandemic, considering many business closed, let go of staff, or shortened operating hours. They even seem to be doing better now.
The staff benefits helped contributed to Zazie’s low turnover rate. The coronavirus pandemic only saw one server leave to change careers.
And over the past five years, only a few employees left to change cities or pursue different careers. No one quit to work at another restaurant, which is a testament to workplace satisfaction.
Let’s hope that other restaurants follow in their footsteps.
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Source: My Positive Outlooks, Zazie San Francisco
