Only last week, the renowned Brooklyn pizzeria Franny’s announced a three-percent Obamacare surcharge – and then reneged on the surcharge only 24 hours later in favor of higher menu prices.
The owners of the eatery explained their rationale in a letter, saying:
It is appearing that many of our guests are viewing the proposed ACA surcharge as anti-Obamacare, which is unfortunate, because it is in fact, quite the opposite…Clearly our intent was misunderstood and our guests have made it clear that they would prefer to see higher prices as opposed to a surcharge.
Maybe the nature of any surcharge named “Obamacare” is likely to be as polarizing as the legislation itself, yet the reversal of course by Franny’s also points to a wider trend within the restaurant industry. Simply put the consensus around the need to reform front-of-house and heart-of-house compensation models may be shared by restaurant owners, but is not understood by or a priority for the general dining public.
Another recent example is Pok Pok in Los Angeles.
The James Beard award-winning Thai restaurant opened a new location in the Chinatown area this fall with a Tock ticketing system and a five-percent surcharge designed to spread pay to heart-of-the-house employees. However, Pok Pok’s owner, Andy Ricker, soon found the policies resulted in little more than confusion for his customers and has since opted to turn to higher menu prices.
Unfortunately, the policy was met (unsurprisingly) with misunderstanding, confusion and resistance from many of our customers and employees alike. Some of the problems we encountered: customers being confused as to how much they should tip; customers thinking that the five percent included the gratuity and then not tipping at all; and servers feeling like they were getting less in tip income (they were, and that is the nature of trying to redistribute some of the windfall that tips bring to front-of-the-house employees).
Although restaurateurs are exceedingly sensitive to hiking menu prices in the midst of an unproven economy, some owners are finding customers better equipped to process more expensive fare than having to learn a new method for settling their tabs.