19 Aug 24th–Aug 30th, 2023 phoenixnewtimes.com phoenix new Times | cONTeNTs | feeDBacK | OPiNiON | NeWs | feaTuRe | NighT+Day | culTuRe | film | cafe | music | encourages them to partner with the restaurant association to find other cost savings in their business. With the razor-thin, single-digit profit margins food and beverage owners face, Chucri says he understands the challenges but notes that restaurateurs must also recognize the frustration of customers who are feeling the growing costs of going out, as well as tipping fatigue. Miller and Hanna say they likewise try to deter clients from implementing these fees. “Additional fees, plus the expectation of a gratuity for staff, puts customers in an uncomfortable position,” Hanna says. “Are those extra few dollars in fees really worth negative customer reviews, loss of return customers and losing valuable staff? From an HR perspective, absolutely not.” Closing gaps for employees James disagreed, saying the fee at Born & Raised Hospitality’s restaurants has been met with positive feedback from customers and staff. The charge has already allowed his hospitality group to raise salaries for cooks and other back-of-house staff by $4 to $5 an hour — an effort to close a historic pay gap and start new staff at higher wages, he says. “We’ve seen a really positive return as far as retention and overall mental health across the restaurants, especially in the back of the house,” he says, noting that prior to implementing the fee and making changes to pay, finding reliable employees was a challenge. For the Barter & Shake team, proceeds from the service fee fund health and retirement benefits for full-time employees — something that isn’t required due to the company’s small size but makes a world of difference for retaining employees, Snapp says. Downing says she never had a strong opinion about service fees but adds that as someone who knows the ups and downs of the industry after nearly nine years bartending, she’s become more understanding of the charges. She previously worked at Fox Restaurant Concepts, most recently bartending at Culinary Dropout in Scottsdale Quarter and training bar staff at new Fox restaurants. She has been bar manager at Grey Hen since November, and she just set up her first retirement savings account. “They’ve got us really set up over here to be doing what we do as a career and actually being able to live off of what we do,” she says of the benefits she receives. While industry leaders may get the nuances of service fees, they’re still rela- tively new, bewildering and frustrating for many Valley customers. “Part of what people are concerned about is it feels like a trick. It’s confusing the customer,” says Miller, who advises businesses on labor and employment law. So why not raise menu prices? Snapp and James say their teams considered increasing menu prices, but felt that a fee would offer the most flexibility, transparency and ulti- mately pass along a lower cost increase to customers than if they upped prices. “It’s easier to expand than it is to contract,” James says. “I don’t want to get into the business of consistently raising, raising, raising our prices. I’ve yet to see a restaurant group raise their prices and bring them back.” Snapp says a fee helps the company provide more benefits to staff while being upfront with customers and still letting them decide how to dole out gratuity. “The art of gratuity is still your own prerogative,” Snapp says. “I would much rather guarantee the benefits that we’re giving to our team than have them rely on the generosity of strangers.” Are fees the future in the Valley? James says he’s hopeful the fees at his restaurants are temporary. “We hope it doesn’t become a long-term thing and that prices level out,” he says. As he looks at other states, he sees the dilemma restaurant owners are in. He recalls a recent visit to San Diego, where he noticed a 13% service charge on one tab. “That was eye-opening,” he says. “It’s the nature of the beast.” Snapp agreed that as these charges become more commonplace in other cities, they will appear at more places in Phoenix, too. “I think that it’s coming to the Valley,” he says. “It shows the growth of Phoenix not only from a population standpoint but also from a food and beverage standpoint.” Clever Koi’s Gilbert location. (Photo by Lauren Cusimano)
