i s h c o m p u b l i c at i o n s s i n c e 19 8 6
P
A
C
I
F
I
C
/
P
R
A
I
R
I
E
estaurant News R June 2014 Vol. 20 No.3
N A T I O N A L
C O V E R A G E
R E G I O N A L
F O C U S
$ 5 . 9 5
No tipping at B.C. restaurant GROWING NEW IDEAS AT TERROIR
6 Smoke ‘N Water staff.
By Jonathan Zettel, assistant editor
Canada Post Publications Mail Agreement No. 40010152
INDUSTRY FINANCIAL SNAPSHOT AT CRIS
LEBOE PARTNERS WITH CONCORDE
14 2014
Top 50 Chains Report
6
18
PARKSVILLE, BC—A Vancouver Island restaurateur opened what he is calling Canada’s first no tipping restaurant on June 2. David Jones, owner of Smoke ‘N Water, said the business model that includes tipping is broken and does not work for restaurants. “We want to be innovative, we want to create a transformational shift on the business model of how restaurants are run,” Jones told PRN. Jones said, although a handful of restaurants across the U.S. have no tipping policies, no Canadian restaurants currently prohibit the customary practice. The practice of tipping, according to Jones, creates disparity of wages between front of house and back of house employees. “We’re drawing a line in the sand and saying it stops right here,” Jones said. “No longer will a woman working in the back of the house … for thirty years, be a single mother with an 11-year-old son and be paid $11.50
with no medical or dental. That’s not OK.” Jones said he plans on paying “a living wage” to both cooks and servers and will factor labour costs into menu prices. He said operations is budgeting the cost of labour at 30 per cent and considers his business model one of profit sharing. An additional two per cent of gross sales will go to provide dental and medical care to all employees and one per cent of sales will go into a social fund, of which the use will be determined by staff on a monthly basis.According to Jones, the practice of tipping makes for difficult management situations, citing incidences when servers provide excellent service yet receive a poor tip. “How does that make you feel as a human being?” Jones said. “How do I, as an owner, tell my server to shake it off?”
Reconsider tipping models Jones said he got the idea of banning tips in his restaurant after listening to University of Guelph professor
of tourism and hospitality Bruce McAdams on CBC Radio. McAdams—who has more than 25 years experience in the restaurant industry—has researched the effects of tipping and has been a proponent of rethinking tipping and creating a dialogue around the subject. “The biggest thing is probably the inequity of wages it causes between the front and back,” McAdams told PRN, noting servers can make up to $30 per hour while cooks and dishwashers make between $10 and $14 per hour. This inequity, McAdams argues, causes real financial consequences for operators because the industry has a high employee turnover. Culinary students coming into the industry leave after a couple years because they are living paycheck to paycheck and some servers come into restaurants to make as much money as possible then leave. McAdams estimates it can cost up to $1,500 to train a new employee. McAdams said over the past 15 years, operators have tried to balance
the wage disparity by having servers tip-out to the house. Unfortunately, he said, this practice causes trust and transparency issues and puts restaurants in a high-risk situation with the Canadian Revenue Agency because tips collected from servers are “controlled tips” and must be taxed. The practice of tipping also makes it difficult for restaurants to hire mangers, McAdams said, because managers often make less, have more responsibility and work longer hours than servers. McAdams said tipping has the ability to influence quality of service, but not as much as one might think. McAdams said, some restaurants may try a no-tipping policy, boost prices and not pass along the revenue to staff. “You have to try and have faith in the marketplace and you hope that people will move to places where they are treated properly,” he said. According to McAdams, Canadians tip $6 billion annually. Continued on page 3
Craft beer at Burger King in new YMM terminal FORT MCMURRAY, AB—Burger King and Subway will serve Canadian craft beer as part of the foodservice at the new Fort McMurray airport terminal slated to open on June 9. Both QSRs will be located presecurity in the terminal’s food court. “Obviously, it is one of the first in Canada but I think it’s becoming the trend going forward and it’s usually specialty craft beers that are being sold,” Jim Meyer, senior director of airport business development at SNC-Lavalin Inc., told PRN. Meyer said QSR liquor sales are taking off in the U.S., with some fran-
chises selling wine. The terminal will also house two full service restaurants. Earl’s Kitchen and Bar will be found post-security and provide customers with features unique to the airport location such as grab-and-go options and a breakfast menu. Pre-security, located near the terminal’s main entrance, Famoso will open its first airport location, offering Neapolitan pizza, salads and a full bar. Along with Burger King and Subway, a Tim Hortons and a Mary Brown’s Chicken and Taters make up the remainder of the food court,
while a Jugo Juice and a Starbucks are located post-security near the Earl’s restaurant. The Starbucks location is a new concept for the company and has 20-foot, floor-to-ceiling windows. Meyer said a survey of customers was taken over three years to determine how to best support demand and found the airport had very long dwell times ranging between an hour and a half and two hours. “We also found that the average income was over $189,000, which is more than double the Canadian average, so they had a lot of cash in their jeans to spend on products,” said
Meyers, adding many travellers are coming from remote camps as part of the oil sands development projects and have not had a chance to spend money in some time. “We tried to align the selection with what the customer was telling us,” he said. A large percentage of the foodservice is pre-security, which Meyer said goes against current airport trends. This was done because of long dwell times, to provide easy access for terminal employees and promote the use of an outdoor courtyard. Continued on page 3