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Understanding the Tip Income Protection Act of 2018

25 Apr

Good, bad or a litigation nightmare waiting to happen?

 Buried deep within the 2,000-plus pages of the Consolidated Appropriations Act signed into law earlier this year are three pages of legislative language that amend the federal Fair Labor Standards Act, or FLSA, of 1938 to prohibit employers — including managers and supervisors — from “keeping” tips received by employees for any purpose.

What is most unusual, however, is that the new prohibition is not linked to the employer’s taking of a tip credit against its minimum wage obligations. It is this latter part that is so very significant in terms of expanding the reach of the FLSA.

How did we get here?

In 2011, the Department of Labor under the Obama administration announced FLSA regulations extending protections to tip income, even when no tip credit was being claimed by the employer and the wages being paid were in full compliance with federal minimum wage and overtime requirements.

The courts, however, were openly hostile to the 2011 regulation and on numerous occasions held that it was not supported by the statutory language of the FLSA and was therefore unenforceable.

Fast forward to 2017, when the Labor Department under the Trump administration attempted to rescind the 2011 regulation that had been held invalid by a number of courts. Unfortunately, as has become the norm these days, the 2017 regulatory proceeding became highly politicized, which opened the door for a Congressional resolution that was buried in the recent government spending bill.

Until now, the FLSA secured an employee’s right to receive the proscribed minimum wage and overtime, but it has now been amended and its protections have been extended to cover all tip income regardless of whether the employer relies upon any portion of the tip income in meeting its minimum wage requirements — in other words, regardless of whether the employer applies a tip credit.

In an apparent effort to clarify the new statutory language and possibly avoid or at least decrease the likelihood of litigation, the Labor Department issued a field bulletin on April 6 saying it expects to proceed with rulemaking in the near future to issue regulations on the FLSA amendments.

In the meantime, the Labor Department’s enforcement policy on defining who is a “manager or supervisor” for purposes of the 2018 amendments will be based on the job duties criteria for “executive” employees under the white-collar exemptions of the FLSA. That means employees whose primary duty is management, who customarily and regularly direct the work of two or more other employees, or who have the authority to hire or fire other employees or make suggestions on such that are given particular weight.

Interestingly, the bulletin did not limit the definition of a “manager or supervisor” to an employee paid on a salary basis, as is required to be exempt, so it appears that hourly paid non-exempt supervisors and managers are included in those prohibited from “keeping” any portion of the tip income.

What’s at stake?

The operative statutory language states, “An employer may not keep tips received by its employees for any purpose, including allowing managers or supervisors to keep any portion of employees’ tips, regardless of whether or not the employer takes a tip credit.”

In related language, the FLSA was amended to create a remedy to allow employees to seek recovery of all tips kept by the employer, recovery of any tip credit claimed, and recovery of an equal amount of both in the form of liquidated damages.

While they were at it, the legislators could not resist amending the civil money penalty provisions of the FLSA to allow the Labor Department to assess civil money penalties of up to $1,100 per violation of the new tip protection language.

This too is new territory for the FLSA, as the Labor Department previously needed to prove the employer’s violations of the minimum wage or overtime provisions were either “repeat or willful” in order to go after civil money penalties.

Interestingly, the bulletin also said the Labor Department will follow its normal procedures in assessing civil money penalties, including determining whether the violation is repeated or willful.  Whether this is intended to mean that civil money penalties cannot and will not be assessed unless they are determined to be repeated or willful is not clear, nor is it clear whether this enforcement position will be codified into formal regulations that cannot be easily changed from one administration to the next.

The impact on tip pooling

The concern that the Tip Income Protection Act of 2018 will usher in a whole new wave of FLSA collective actions is based on the vague and ambiguous statutory prohibition language which begs the question: what is meant by the terms “may not keep tips received by its employees for any purposes?”

For decades, restaurant employers have operated various forms of tip pooling and tip sharing arrangements where servers have been required to share a portion of the tip income with other customarily tipped employees, such as bussers, food runners and service bartenders.

In such arrangements, the employers do not “keep” any portion of the tip income, but they do facilitate and ensure that a portion of the tip income is shared with and distributed to other employees. Thus, the obvious question arises as to whether such arrangements will be deemed to violate the new statutory language.

As with most litigation issues, there will be two distinct sides as to how the new statutory language should be interpreted by the courts, and only time will tell as to which side will prevail.

For what it is worth, the Labor Department appears to be trying to clarify this issue. In the April 6 bulletin a footnote said administering a permissible tip pool does not constitute unlawful retention of tips.

Much needs to be done in the upcoming rulemaking proceeding promised by the Labor Department to bring clarity to this issue if years of litigation are to be avoided.

Jim Coleman | Apr 24, 2018

 
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Arizona restaurants see biggest spring break revenue bumps in entire country

23 Mar
Restaurants in Arizona see the largest revenue increases in the country during spring break, according to a new report by business management software company Womply.

The study found that six of the best revenue days for Arizona restaurants in 2017 happened during spring break, with the top days being March 3, 4, 11 and 25, said Brad Plothow, Womply’s vice president of marketing.

In 2017, those days fell on weekends, during which Womply found Arizona eateries had a 21 percent increase in revenue compared to other weekends outside of spring break.

Plothow said having data like this is important to small and independent restaurants. It can help them take advantage of busy times and be prepared for the influx of customers.

“You need to know how to staff your restaurant to cater to big peak times,” he said.

While producing the report, Womply considered the first three weeks of March as spring break.

March, considered peak tourism season for Phoenix and most of Arizona, also was the best sales month for Arizona restaurants, according to Womply’s report.

Arizona doesn’t just get an influx of families, high school and college kids during the spring break season. The first three weeks of March also are prime Cactus League days, which draw hundreds of thousands of people to the region each year. Womply’s report didn’t mention the potential impact of the spring training games.

While Arizona is a traditional spring break tourism destination, other top destinations such as Southern California and Hawaii didn’t see any bump in their revenues, according to Plothow.

Surprisingly, local restaurants in Arkansas, Georgia and Nevada saw a positive impact on sales during spring break, he said.

Womply’s data comes from analyzing transactions at 26,000 small, independent restaurants in all 50 states during every day of the 2017 calendar year.

By   – Reporter, Phoenix Business Journal

 
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Starbucks Chairman Says Retail Rents Will Fall, Plans To Continue Expanding Footprint

15 Mar

As landlords struggle to fill vacant storefronts and keep traffic and tenant morale high, Starbucks Executive Chairman Howard Schultz said the industry is about to enter a new normal when it comes to rental rates.

“We are at a major inflection point as landlords across the country will be forced, sooner than later, to permanently lower rent rates to adjust to the ‘new norm’ as a result of the acute shift [in consumer behavior] away from brick-and-mortar retailing to e-commerce,” Schultz wrote in a company memo, according to Yahoo.

After noticing the increasing number of empty storefronts in major metros across the U.S., Schultz recently predicted that landlords will soon be forced to lower rents in order to account for the shift to e-commerce, or risk holding on to vacant storefronts for undetermined periods of time, according to Yahoo Finance.

Foot traffic at regional malls and shopping centers has declined in recent years due to an excess of retail real estate and a shift in consumer buying habits in favor of the digital shopping experience. Yet, in many cases, rents have not been adjusted to account for the headwinds retailers are facing, Yahoo reports.

As an early adopter of this prediction, Starbucks has gotten a head start on expanding its brick-and-mortar stores with a particular focus on its premium Reserve brand. The coffee giant has opened 1,000 Reserve brand stores and plans to open between 20 and 30 Roasteries, which features an experiential, marketplace-style design. The first concept opened in Seattle Tuesday with stores in Milan and New York to follow shortly. Roasteries in Tokyo and Chicago will open by 2019.

 
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Yaya’s Tacos Opening Brick-and-Mortar Spot in the West Valley

19 Jan

Three years ago, Yaya’s Tacos launched a Mexican-leaning food truck with a paleo and gluten-free menu. Now, after having served a whole lot of grass-fed carne asada and free-range chicken in green chile, Esteban and Lizz Garcia are bringing their food to a brick-and-mortar location in Surprise.

The grand opening of Yaya’s Mexican Bar and Grill is scheduled for January 27. Esteban says he wants the day to feel like a big party, complete with a mariachi band and free giveaways.

 “It’s important that we’re bringing attention to the West Valley,” Lizz says. “I think we need more of this kind of stuff out here. We need fresh ideas.”

The couple is currently trying to sell the old food truck. Operations have already moved to the restaurant’s new permanent location.

The Garcias have been operating under their new location’s previous name — Las Fuentes — for two months. Esteban says this has allowed them to adapt Las Fuentes’s menu to Yaya’s gluten-free and paleo requirements. In something of an unusual move, the new Yaya’s will be taking cues from the restaurant that formerly occupied the space, including key menu items that the Garcias will make gluten-free, and others, such as certain burritos, which will stay as-is.

As for bringing in a new way of eating, Lizz says she and Esteban are looking to “make some noise.”

Tacos at Yaya's

The idea to create a paleo and gluten-free food truck came to the Garcias around five years ago when they tried to adopt a healthier diet, Esteban says. Paleo diets exclude all grains, processed sugars, legumes, and are very low in fruit.

“We found out that it was next to impossible to go out and eat anywhere,” Esteban says. So the couple began experimenting at home. They found they could use coconut oil to fry their tacos, and created a homemade, vegetable-based tortilla. The tortilla has became so popular that the dough is now sold at Sprouts Farmers Market.

“A lot of restaurants don’t really cater to the community, and I’m not just talking about the paleo community, I’m talking about people with food allergies,” Esteban says.

A glimpse of the new Yaya's space

Yaya’s serves popular Mexican dishes such as carne asada tacos, and also offers vegetarian dishes such as a vegan-friendly cauliflower-rice taco.

Yaya’s Tacos. 13621 North Litchfield Road, Surprise. 602-421-8781.
Daily 11 a.m. to 8 p.m.

 
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The 10 Biggest Metro Phoenix Food Stories of 2017

15 Dec

The Yard is a popular dining and hangout space on Seventh Street in Phoenix.

The Yard is a popular dining and hangout space on Seventh Street in Phoenix.
Jacob Tyler Dunn

Vegan Mexican? Phoenix-style barbecue? A bubble on Seventh Street? Phoenix, we are coming to the end of an eventful year in food. We were happy this year to showcase some incredible, unheralded dimensions of the Valley’s delicious foodscape — and to ask a few uncomfortable questions. Here are 2017’s top food stories. 

The Seventh Street Bubble Bursts?

“Is Seventh Street now oversaturated?” asked critic Patricia Escárcega in a February cover story. “If the predictions are correct,” she concluded, “many mid-range restaurants will be forced to close their doors in coming years.” Indeed, both Okra and The Herb Box have since closed.

A Little Miss BBQ platter of brisket (fatty, lean, and burnt ends), turkey, ribs, and a sausage link, plus garnish and white bread.

A Little Miss BBQ platter of brisket (fatty, lean, and burnt ends), turkey, ribs, and a sausage link, plus garnish and white bread.
Chris Malloy

The Search for Phoenix Barbecue Begins
Food editor Chris Malloy been scouring metro Phoenix’s barbecue scene, gnawing ribs, slurping sauce, and  inhaling beef short ribs from San Tan Valley to Cave Creek. The series is still ongoing, but the question it seeks to answer — is there a Phoenix-style barbecue? — has been answered: Hell, yes.

The 10 Biggest Metro Phoenix Food Stories of 2017

David Loftus

Chris Bianco Writes a Book 
We knew the guy could cook — who knew he could write?! The Phoenicians who crammed into Changing Hands Bookstore this summer for Bianco’s book launch know it now. The Valley’s best-known chef hit the national talk show circuit, but remains true to our town, and we love him for it.

Ken Singh stands on his new plot of land, Singh Meadows.

Ken Singh stands on his new plot of land, Singh Meadows.
Kate Peifer

Singh Farms Expands
This year, Ken Singh expanded his operations to a 70-acre floodplain and former golf course tucked behind Big Surf Waterpark in Tempe. Post-expansion, the property is now known as Singh Meadows. Singh Meadows is an organic farm and new host to a weekend farmers market.

The 10 Biggest Metro Phoenix Food Stories of 2017

Courtesy of Laurie Notaro

Laurie Notaro Infuriates The Bitchy Waiter 
Humor writer Notaro pulls no punches — particularly at the dinner table. Her call-out to restaurants everywhere about what she’d really like them to knock off right now was the most-read item on the New Times food blog this year, thanks in no small part to The Bitchy Waiter and his not-so-merry followers. Don’t worry. Everyone kissed and made up over lunch.

The site of former restaurant Alice Cooper'stown.

The site of former restaurant Alice Cooper’stown.
Phoenix New Times

Alice Cooper’stown’s Closes
In October, Alice Cooper’stown closed without warning. The festive restaurant served American comfort classics like macaroni and cheese, potato skins, and sliders, often with a Southwestern twist. The owner was none other than rocker Alice Cooper, whose band started in Phoenix.

Nutty, buttery baklava from local Syrian bakers.

Syrian Sweets Exchange Debuts at Local Farmers’ Markets 
This was one of the best feel-good stories of the year — the idea that people displaced from their homes are building new lives here in Arizona, and bringing us a taste of their culture.

Chef Silvana Salcido Esparza of Barrio Cafe Gran Reserva.

Chef Silvana Salcido Esparza of Barrio Cafe Gran Reserva.
Evie Carpenter

Vegan Mexican Starts to Take Phoenix
Barrio Cafe Gran Reserva went to a 50 percent plant-based menu, and vegan spot Mi Vegana Madre has attracted a cult following. Vegan food has been gaining steam in the U.S. for years. That the vegan movement and one of the world’s greatest cuisines have started to marry is a cause for elation.

Szechuan sauce at a few local McDonald's

Szechuan sauce at a few local McDonald’s
McDonald’s

Bet you weren’t expecting this one! Neither were we. Our story on a few select McDonald’s locations carrying Szechuan sauce (for a very brief period) was one of our most-read stories of the year. And as you will see in the story’s post-publication update, the Szechuan saga is poised to continue.

Taqueria Los Yaquis

Taqueria Los Yaquis
Shelby Moore

Taco Summer Lingers
Three of our hungriest writers hit the pavement to dish on 50 of Phoenix’s best taco spots. Phoenix, of course, is a badass taco city in full swing — as our comprehensive guide proves. We’ve got enough solid taco options to keep you full through 2018.

 
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The cost of restaurant staff turnover

08 Dec

Do you know what your turnover is doing to your annual profit?

It’s crushing it.

study done by the prestigious Center for Hospitality Research (CHR) at Cornell University found that the cost of direct training was only about 25% of the total expense in replacing an employee. Given that three-quarters of total expense is untrackable, that figure should scare the POOP out of you. Additionally, as our economy has recovered from the Great Recession over the past eight years, turnover rates in our industry have escalated. Given the estimates made by CHR at Cornell, staff turnover could be as high as $5,864 per employee.

The National Restaurant Associate estimates that turnover was an average of 61% for the total restaurant industry. Unfortunately, that number is deceiving because it includes staff positions at chain operators and line managers where the turnover is far lower. The estimated turnover for regular line employees is closer to 110%. By doing some simple math, that level of turnover will cost the average full service restaurant operator $146,600 annually. If that number doesn’t motivate an improvement in your staffing and retention policies, I can’t imagine what will.

The hidden costs of staff turnover

We thought we should at least examine how this breaks down.

Restaurant+Staff+Turnover+Costs+Infographic

The CHR at Cornell study identified five cost categories that contribute to the total turnover bill. By far the most expensive was productivity loss, accounting for an average of 52% of the total cost of staff turnover.

The real problem here is that these are silent expenses. You typically can’t track this cost unless you set up elaborate systems for tracking productivity. Silent costs like productivity loss makes them particularly dangerous because they aren’t obvious and don’t show up on your regular reporting.

Add to that a growing issue with turnover and you have a recipe for a bad meal (pun intended).

Staff retention a growing problem

The National Restaurant Association estimates that turnover has increased steadily over the past six years and turnover rates are approaching pre-recession numbers. Since an historical low in 2010, turnover has grown by 17%. That means, even if you are good at managing turnover, it’s still costing you much more now than it did just six years ago.

It’s one of the great ironies in our business — bad economy means a great labor market for employers, good economy means a challenging labor market. It’s your job as a restaurant operator to manage in both environments, so these numbers better be alarming to you.

That brings us back to our original question: What is the real cost of turnover in your restaurant?

Even if you defy the national average, it’s still a staggering amount and on average it’s costing restaurants close to $150K annually. I don’t know about you, but I’m a big fan of profit. If you told me I could add $35,000 to my bottom line for almost no additional expense, my first question would be how.

That’s what we mean to answer with our webinar series The War For Talent. We start with some great hacks to retain staff and improve your employee turnover results. Join us and learn how to improve your performance by managing details that make a difference and will deliver immediate results.

 
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15 Best Restaurant Patios for Outdoor Dining in Metro Phoenix

01 Dec

Ocotillo's big, beautiful patio.

Ocotillo’s big, beautiful patio
A bright day at Lon's.

A bright day at Lon’s.
Jacob Tyler Dunn
The entire patio at Lon’s — named after artist Lon Megargee, an artist and former Hermosa Inn manager — is stunning. Upon entering, you’ll see a fountain, trees, tables, and maybe even see a musician performing. Deeper in, you’ll find beautiful views of Camelback Mountain and a cozy fireplace. Then there’s the food. Expect modern American entrées such as wood-fired Maine lobster, crème fraiche mashed potatoes, and truffle mac ‘n’ cheese. Many of the ingredients on your plate, like basil and peppermint, were plucked from the Inn’s on-site garden. You’ll want to consider pairing your meal with something from the restaurant’s award-winning wine list or one of the spot’s specialty cocktails from The Last Drop Bar.
We love the bright red shades at Ocotillo.

We love the bright red shades at Ocotillo.
Jacob Tyler Dunn
The sprawling complex that is one of Phoenix’s hottest restaurants, Ocotillo didn’t forget the nature lover. There’s an outdoor bar, coffee bar, and plenty of seating (from picnic tables to couches) at the culinary brainchild of chefs Walter Sterling and Sacha Levine. Don’t miss the roasted cauliflower — when it’s in season. Luckily, the Spanish Gin & Tonic never goes out of style.
In historic downtown, you'll find Gallo Blanco.

In historic downtown, you’ll find Gallo Blanco.
Jacob Tyler Dunn
The patio at Doug Robson’s excellent Mexican restaurant isn’t the biggest. It isn’t the fanciest and doesn’t have the most intricate decorations or the most lavish views. But the seats along the muraled brick building make for a stellar outdoor dining experience. Eating outside at Gallo Blanco under teal and red umbrellas and without all that much noise from other diners, you feel immersed in a scene, dropped into the neighborhood all around you. That ‘hood is Phoenix’s Garfield District, a cluster of some 800 homes built from 1883 to 1955. Eating tacos and tortas in this cool neck of the city feels right.

 

The patio at T. Cook's.

The patio at T. Cook’s.
Jacob Tyler Dunn
Originally constructed in the 1920s as a private getaway, the Royal Palms Resort drips with Old World charm, and its restaurant is no exception. T. Cook’s offers two patios and a courtyard with a fountain surrounded by tables filled with chatting patrons. (You’ll want arrive early to snag a seat or call for a reservation.) The other patio features fireplaces and impressive views of Camelback Mountain, surrounded by citrus trees. The food here is as upscale as the hotel. Try the New York strip steak or Maine lobster carbonara if you’re looking for something luxe.

 

Queen Creek Olive Mill's many tables.

Queen Creek Olive Mill’s many tables.
Jacob Tyler Dunn
Eating food within sight of where that food came from is a thrill. When that food is olives (and olive oil) and the source is a fleet of olive trees extending from your patio, lunch reaches a new level. At Queen Creek Olive Mill, the menu skews Mediterranean. Dips, boards, and various starters spotlight the olive. You can even add olive-brined chicken breast to salad, as well as olives to both salads and sandwiches. Outdoor dining feels especially suited to certain kinds of eating. The light, vegetable-based offerings of Mediterranean cuisine are one. At Queen Creek Olive Mill, al fresco dining lives up to its storied reputation.

 

Lights accent the atmosphere at the House Brasserie.

Lights accent the atmosphere at the House Brasserie.
Jacob Tyler Dunn
The House Brassiere may be just a few steps from bustling Old Town Scottsdale, but the restaurant feels worlds away. Chef Matt Carter’s dining spot is set in a 1920s bungalow, and the stunning patio features charming, storybook details like a white-picket fence and a brick fireplace. It’s not hard to see why this patio is consistently named one of the most romantic in the Valley. It’s like a secret garden. Dine in the evening and watch as the sun sets and the patio’s strung-up white lights start to twinkle. It’ll be impossible not to get lost in the romantic atmosphere. As far as the food, the menu features an eclectic mix of internationally inspired small plates and entrées.

 

The picnic tables at Joe's.

The picnic tables at Joe’s.
Jacob Tyler Dunn
The main draw at Joe’s Real BBQ in Gilbert, of course, is Joe Johnston’s Texas-inspired barbecue, which is served cafeteria-style inside the historic 1929 brick building on Gilbert Road that once housed a grocery store. The restaurant’s laid-back patio is a close second, though. The family-friendly space features picnic tables shaded by mature trees, and a roomy, kid-friendly lawn area with a cornhole set up. There’s no shortage of comfortable patio dining options in Gilbert’s Heritage District, but the patio remains a tried-and-true local favorite.

 

House of Tricks has a pretty patio in the heart of downtown Tempe.

House of Tricks has a pretty patio in the heart of downtown Tempe.
Jacob Tyler Dunn
Just steps from Arizona State University’s campus lies a really great patio that’s just hidden enough. House of Tricks caters to parents, faculty, couples, or just students with some extra cash who want an upscale, but still casual vibe without having to venture too far from Mill Avenue. The romantic atmosphere here is no accident. Husband-and-wife owners Robert and Robin Trick met at Tempe’s bygone Bandersnatch Pub and set out to open a fine-dining spot. Since real estate on Mill Avenue was too pricey, the two refurbished an older house, opened in 1987. Since then, they’ve added another house and a stunning shaded brick patio in between the two buildings. There’s plenty to love about the patio, including a goldfish-filled pond and the fact that Robert’s mother, Mary Trick, maintains the garden.

 

A patio on the second floor.

A patio on the second floor.
Jacob Tyler Dunn
Crescent Ballroom is best known as the hip, midsize venue that’s been instrumental in re-energizing the downtown Phoenix live music scene. But it should also be recognized for its outstanding patio, which brings some much-needed urban nightlife to the relatively quiet streets of downtown. The double-decker patio regularly hosts live music, trivia, and weekend brunch. The bottom floor offers shaded seating, while the top floor boasts views of downtown Phoenix. No matter where you sit, though, you have easy access to Cocina 10, the venue’s Mexican-inspired kitchen. The menu, designed by Chris Bianco, includes house favorites like the I-10 Nachos and the Poquito bean and cheese burrito.

 

Urban dining at Cibo.

Urban dining at Cibo.
Jacob Tyler Dunn
If you were just walking by Cibo, you’d probably assume the pizzeria was a private home. But take a closer look and you’ll realize you’ve found a well-loved dinner spot with killer downtown views. The restaurant is housed in a charming 1930s bungalow that serves Italian fare including signature wood-fired Neapolitan pizzas, salads, and saltimbocca bread. And the patio provides many different places for you to enjoy the food and drinks. Gather around the fire pit with a view of the Phoenix skyline or head to a more secluded, shaded spot if you’re looking for some privacy. Our favorite perk? The patio is mostly shaded so you can dine outside here even when it’s hot. If you’re looking to save cash, head here from 3 to 6 p.m. during the week for happy hour. You can get small plates for $6 or less and glasses of wine for $4 or less.

 

Epic views at Talavera.

Epic views at Talavera.
Jacob Tyler Dunn
If a Hollywood movie director wanted to capture the beauty of the desert in an upscale setting, we might suggest the Four Seasons Resort’s Talavera. The views of Pinnacle Peak from this restaurant and bar are majestic. Plus it’s far enough away that it feels out of town — even though you’re just minutes from North Scottsdale. Think of it as your own desert hideaway. Steak and seafood dominate the menu. Go all out and order the 20-ounce prime bone-in rib eye — or try lighter fare, like the ahi tuna tartare, served with pineapple and pine nuts. If you want to enjoy the view without putting a serious dent in your bank account, you can do dessert or drinks at the restaurant’s bar. Sit by the fireplace when it’s cool outside.

 

Chelsea's Kitchen offers lovely outdoor seating.

Chelsea’s Kitchen offers lovely outdoor seating.
Jacob Tyler Dunn
Chelsea’s Kitchen provides Phoenix with waterside dining — yes, you can have that experience in the middle of the desert if you count the irrigation canal as “waterside” — that feels intimate, despite being just off Camelback Road. This secluded (and often packed) patio features an open bar, high and low tables, lights strung from the ceiling and even a fireplace. It’s enchanting. Evening crowds make it feel lively, like the place you’ll want to be seen. Larger groups and couples alike gather here to enjoy familiar, but never boring menu items including burgers, salads, short ribs, and tacos. Fresh, all-natural gelato from nearby Grateful Spoon Gelato and classic options like red velvet cake complete the dessert menu.

 

One of downtown's, and the country's, top diners: Welcome Diner.

One of downtown’s, and the country’s, top diners: Welcome Diner.
Jacob Tyler Dunn
Roosevelt Row’s best patio easily belongs to Welcome Diner. The mishmash of bar stools, tables, and chairs almost feels like someone’s backyard — a yard that was furnished after hitting a thrift shop or two. And that’s really the whole point. The patio is designed to feel like a hip neighborhood spot where you sip on one of Welcome’s signature cocktails and dig into Southern comfort food as you hang out with your buds. The backstory behind the restaurant’s setting is almost as cool as the restaurant itself: It’s a former 1940s era diner that was brought to Winslow, Arizona, all the way from Wichita, Kansas. Moved to Phoenix in 2002, it’s been a landmark ever since. This place is open until 2 a.m. every night except Mondays, making it ideal for a late night out.

 

Peep the garden patio at Rula Bula Irish Pub on Mill Avenue.

Peep the garden patio at Rula Bula Irish Pub on Mill Avenue.
Courtesy of Rula Bula
The entrance to Rula Bula Irish Pub may be directly on Tempe’s bustling Mill Avenue, but the garden patio behind the established restaurant and bar is a whole new world. Illuminated with swooping bistro lights by night, the Rula Bula patio is surrounded by stone walls and finished with ironwork and antiques, making the noise of Mill Avenue all but a faint roar even on the busiest nights. There’s a full bar outside, and full service for those hoping to order some of Rula’s well-known pub fare and libations. It’s also pet-friendly, making it a must-try for those with puppers.

 

Outdoor seating at The Orchard.

Outdoor seating at The Orchard.
One of the loveliest patios in north central Phoenix is at The Orchard, a two-acre food and drink compound located on the site of one of the city’s first citrus farms. The citrus groves may be gone, but owners Ken and Lucia Schnitzer have preserved many of the original homestead’s signature features, including the farm’s historic water tower. There are plenty of options for food and drink at The Orchard, including Pomelo’s, a laid-back New American restaurant with a substantive wood-fired pizza menu, and Luci’s at The Orchard, a cafe and marketplace. The family-friendly venue is also home to Splurge, a gelato and candy shop, and the Filling Station, which dispenses cocktails and beer on tap. All the restaurants share a lovely courtyard with multiple patios that boast bistro and picnic tables, a splash pad for the kids, and shaded lounge areas.
Originally published November 2, 2015. Updated November 30, 2017. Teresa Traverse, Lauren Cusimano, Patricia Escarcega, and Chris Malloy contributed to this post. 

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How to Breathe Fresh Life Into a Stale Restaurant Brand

27 Oct

Restaurant brands need to be refreshed every few years or they start to grow mold like expired bread.

So, how about your brand?  Is it as fresh as your bread?  As relevant as the latest technologies your core audiences are using? Today’s tech-savvy consumers expect their smartphone provider to come up with a new technology every twelve months.  Restaurant industry executives who don’t think the same expectation for speeding up innovation doesn’t apply to their businesses are wrong. Both the tech and restaurant industries share the same consumer, so it’s time the restaurant industry started getting used to the idea of continuous innovation.

Here are a few general tips relevant to any company considering a rebrand—but like a custom set of replacement dentures, it really should be custom-fit to work best.

1

EMBRACE CHANGE WILLINGLY

It doesn’t matter how big or small your company is, it is scary to do a brand reboot if you are doing it right.  If you’ve been there since the early days—or have a lot of your own money on the line—you must be pushed beyond your comfort zone.  Change willingly.  If you wait until a brand rejuvenation project is obviously needed, it’s too late. Ask yourself: When is the last time my business did a brand review? Remodel?

2

WORK FROM THE INSIDE OUT

When you analyze it, you’ll see that nearly every successful restaurant brand turnaround started in the heart of the house: in the kitchen, with the menu.  Ill-conceived restaurant re-branding strategies start from the outside and work their way in; meaning they announce changes with expensive advertising campaigns, start with new signage and exterior remodels, and then they work their way in with interior remodels and after-the-fact staff training.  Win the hearts and minds of the internal customer (the crew/associates) and come up with killer new signature items your associates believe in and rave about.

3

CONSIDER THE SIX SENSES

  • Sight: Does it look fresh? I mean in terms of actual fresh product but also in terms of other visuals like the paint, fixtures, finishes, fabrics, surfaces, uniforms, fonts, fashions, and overall vibe)?  Go in through the front door instead of the back door; experience the brand as a new customer would and assess the gaps between what’s there and what should or could be there.  Sometimes just a fresh coat of paint can do wonders for perceptions of associates and guests.
  • Smell: Put on a blindfold and have someone walk you around zone by zone of your restaurant.  What do you smell?  Think about it as you go through every zone and ask yourself – should there be a smell, and if so, what should it be and what is it now?  Hint: It should not be the same smell in every zone and at every sequence of the dining experience.  The sense of smell is the most memorable of all of the senses.
  • Sound:  Now go through each zone guided only by your sense of sound.  What should a guest hear (and not hear) in the dining room?  In the restroom?  At that booth near the kitchen?  There are entire companies specialized purely in acoustical design because it’s that important.  Some chefs even consider the sense of sound in the creation of new dishes, meaning, not just how the dish looks and tastes but how does it sound as it is being eaten?
  • Touch:  Do your doorknobs help tell your brand story?  I know this may seem a little far-fetched for some, but even way back in the 1970’s—before ‘brand story’ was even a thing—my dad thought this through in designing his rustic seafood restaurant.  He wrapped the door handles in worn rope and used authentic and antique nautical equipment to help guests feel transported even before they stepped foot in the restaurant.  Such queues add up to create an experience and set the stage for your brand to shine.
  • Taste:  Naturally it’s expected that the food and beverage offerings should taste amazing—and most restaurant executives will claim theirs does.  And I will assume you’re already doing guest satisfaction surveys.  But what about your associates?  Would they recommend their employer as a place to eat?  It’s so important to get this right.  (See Associate Engagement.)
  • Sixth Sense:  Great restaurants have some extra quality to them that you can’t quite point to.  All of the fundamentals are there – and those are great – but there’s something extra that feels a little magical. If you ask me, great restaurants have a soul.  It’s something that can’t be engineered, but the environment for it to exist can be designed.  And you can aspire for this quality.  Be original and build in the magical for your concept.

4

KNOW THE TRENDS

Before you spend the first dollar planning or implementing, make sure you’ve spent at least a nickel researching and analyzing.  Sure, you need to know your internal trends like you know the back of your hand.  But you also are going to need to own up to the fact that there is more happening in the world than you alone can master.  Make new friends and travel with them.  Bring in an outside perspective.  To start, see these restaurant trends.  You should definitely benchmark and look at what others are doing, but if you mimic another brand yours can only ever be a counterfeit.

5

FOCUS YOUR RESOURCES

Not even Coca Cola with a seemingly limitless budget can afford to do everything it wants to do at the same time.  When you do a full top-to-bottom brand review and look to budget out for a reboot, you will inevitably exceed the parameters of what it makes sense to do simultaneously.  This is a natural part of the process so don’t feel discouraged.  Embrace limitations as a source of inspiration to be more creative. Start with the basics.  For instance, how current are your brand standards documents?  You know, things like a professionally crafted positioning strategy, brand personality statement, set of measurable brand promises, and a compelling brand story.  Plan and articulate first.

6

GET A NEW DRESS

Often times, car companies will put a new skin on a proven and renowned chassis.  Maybe your underlying framework and chassis is solid and it’s only your headlights and bodywork that’s out of touch.  Car companies can’t keep getting top dollar and industry accolades if they put the exact same model car out every single year.  Are you retooling your menu and marketing every 6 – 12 months?  Sure, it costs you too if you have to re-evaluate your menu a couple times per year and repackage, but wouldn’t you agree those boring car companies have it so much worse?

7

BE BRAVE, NOT BORING.

It fascinates me how many companies say in the same sentence, “We’re looking for innovative ideas,” but also “we need some case studies to get the support of the board.”  If it’s truly innovative, you won’t find a case study for it because it hasn’t been done before.  And if you can find a case study for it, it’s not a novel idea and can only at-best be a commandeering of someone else’s innovation.  A good rule of thumb here is to ask, “Will what we’re doing be considered so unique, exciting and ground-breaking that journalists from around the country (or world) will write about it?”

8

SOMETIMES IT’S BETTER TO START OVER.

In some cases it’s better to just get a fresh start than to keep trying to repair a brand that’s built on a compromised foundation.  Don’t be afraid to change your name or start a new company/brand.  Sometimes you’re better off cleaning the slate and doing something fresh that was unrestrained by the previous brand parameters.

I’m not asking you to depart from your current ‘brand’ with reckless disregard; nor am I pushing you to hire a consultant or to not trust your gut. I want you to find the courage and inspiration to do something so special and unique that you attract not just guests but associates, investors, and journalists.  If you feel a little lost or overwhelmed, it’s okay.  It should feel that way if you’re doing it right.  Go it alone or hire experienced help.  Companies like mine do this for a living, but you don’t have to hire help.  What you have to do above all else is aspire to do something meaningful and be willing to put it all on the line to bring it into the world.

 
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5 ways to take the temperature of your restaurant

04 Oct

Get a fuller picture of business performance with these strategies

Measuring performance is critical for your restaurant. A coach measures a team’s efficiency with wins, losses and public perception, and restaurant managers should think the same way.

Many restaurant failures could be saved by implementing some basic but necessary forms of measurement. Successful restaurants that maximize their profit have one standout approach: They use multiple levels of measurement for real-time feedback on the health of their business.

Use these five best practices to help you identify your restaurant’s needs, create a more accountable culture and generate sustainable cash flow.

1. Dine at your restaurant. You would think this is obvious, but it’s very uncommon. Every time you dine at your restaurant, you gain a new perspective. Each seat views the business from a unique angle. You may have a wobbly table or notice a light that is out. You can also evaluate the service as a guest. You will quickly see strengths and deficiencies of the service staff. What is their sense of urgency? How strong is their menu knowledge? Is the host attentive and enthusiastic? Are pre-busses and refills consistent with training standards? Once you have identified weaknesses, you can plan to bridge the gap.

As for the food, I have dined in my restaurants hundreds of times and have had very few perfect experiences. If you feel there are no growth opportunities with food, you are not looking hard enough. Eating as a guest gives you incredible coaching opportunities for recipe adherence, food production and technique, and helps find training and developmental holes you can work with.

2. Use secret shoppers. Secret shoppers are an important measurement for the sustainability of a restaurant, providing a quantitative valuation of your team’s performance. These professionals analyze everything from the façade, to the bathrooms, to theft behind the bar and the server upselling dessert. Your staff will always act differently when you are not around, so these companies are your eyes and ears. All of the successful companies I have worked with have utilized secret shoppers. Creating excitement around these results with your team is important. I have rewarded teams when I get great results, and I have disciplined weak service. When you follow through with the results, this tool can enhance the service culture.

3. Work with financial software. This is an inexpensive and essential tool for measuring your company’s financials. Software programs can allow you to identify COGs, labor management, same-store sales, comps and many other measurements in real time. You can use this software for inventory control, prep and ordering pars, which help you decrease waste.

Although a monthly P&L is an important measurement, it analyzes the past. P&Ls should be a report card, but you shouldn’t measure business health with just a P&L. Use the software to understand your business in real time so you and your team can make operational changes on the fly. Create an educated culture around these tools with your team, focused on sales but able to analyze inefficiencies. In my company, all managers are trained on software so they can understand the “why” behind the numbers and make operational decisions based on analytics. I don’t manage to the bottom line; I lead through information. This has added to millions to my company’s profit.

4. Pay attention to reviews. Online reviews have an incredible influence on public perception. When dealing with reviews, you first need to communicate directly with the guest who has reviewed your business. Quick public responses to reviews stop a guest from ranting about your business and show them you value their input. It’s also essential to thank those who leave positive reviews, providing positive reinforcement and making them more likely to dine with you again. Secondly, take the feedback to your team. If you dismiss reviews, so will your team.

5. Talk to your guests and employees. These are incredible barometers of your business. Guests will tell you if they like the food directly and indirectly. If a guest says everything was good, ask them what you can do to make it great, and they will tell you. Just because they aren’t complaining doesn’t mean they don’t have issues. Watch their interactions to see if they are enjoying themselves. Nonverbal interaction offers much information.

Servers and bartenders are filled with information on what people say about their experience. They know which items consistently get returned. Ask them how to make the training program more effective. Find out how morale is and how you can impact it. Give them a voice. Empower them as partners and they will act accordingly.

Justin Cohen is partner and VP of operations for Riot Hospitality, a $50 million, multi-concept hospitality company. Cohen has worked in every single vertical within the restaurant business.

 
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The Art of hospitality

19 Sep

Hospitality doesn’t just make guests feel good – it’s good for business

I’m not one to spend money on filling my closet with rows of flashy sneakers, or lining up at dawn to get the latest tech gadget. But I do happily spend my hard-earned cash hunting down great dining and drinking experiences.

Over the years, my litmus test for which restaurants and bars I return to has become quite simple: How does the place make me feel? Call it comfort, call it vibe, call it being taken care of, or call it escapism, but more than any other element, a palpable sense of hospitality is what truly captures a guest’s heart.

Genuine hospitality is what separates a great experience from a forgettable one. It’s what fills the bar stools with devout regulars. Yes, it can be an ephemeral factor that’s hard to put into words, but when you feel it, you know it. Developing hospitality that emanates from your staff, and encouraging them to unfurl it night after night, is the key to creating repeat business, and is imperative for the bottom line.

“Hospitality is the most important aspect of what we do,” said Sophie Oppelt, sommelier at Summit at the Broadmoor in Colorado Springs, Colo. “At the end of the day, you can have a killer beverage program and incredible food, but it all comes down to how your product gets to the table and the human interactions that go with it. These can have an impact that are more memorable than the bottle of wine, or even the entire meal.”

Having empathy for your guests and recognizing that each one is looking for something different, allows you to engage them with an open mind, to adapt your approach to what you’re hearing, and then to create custom experiences they’ll remember.

One principle to focus on with your staff is the difference between service and hospitality. These are two different skill sets, said Matthew George, lead sommelier at Rivea in Las Vegas, one of Alain Ducasse’s properties.

“Learning the steps of detailed service is one thing, but you have to choose to be hospitable,” George said. “All the finer points of service can be taught. But the staff has to openly, and happily, embrace a sense of hospitality that affects their conduct every day. It’s about being one step ahead of the guest, knowing what should come next in their experience before they do. Beating their anticipation and needs makes for a secure, welcome feeling. And for repeat guests, you can enhance their experience with a new wine or dish, but ultimately they should leave with a feeling as welcoming as on their first visit.”

Even how your staff refers to guests is important.

“First off, you must refer to them as ‘guests’ and not ‘customers,’” said Jeff Taylor, beverage director for North End Grill in New York City, part of Danny Meyer’s Union Square Hospitality Group. “We try to take a lot of the transactional nature of a restaurant out of the equation and make it feel like we’re inviting our friends over to our apartment for dinner. Every guest must be handled differently. Does this guest require a lot of attention? Is this guest hands-off? Is this guest having a bad day? Is this guest celebrating something and, if so, how do we acknowledge it? Do we know what the guest’s preferences are ahead of time, like what kind of water they prefer? How do they like their Martini made? The list is endless, but it’s a list that is specific to that particular guest.”

Hiring employees that have an innate sense of hospitality is a must.

“Some people will be more naturally inclined to hospitality than others,” said Jason Percival, beverage director at Post 390 in Boston. “You can tell your staff to smile more, to refine their tableside manner, or to use certain verbiage, but if it’s not genuine, it’s apparent. If someone by nature genuinely wants to take care of people, it’s very easy.”

Although it can be challenging to identify in an interview, look for positive characteristics in prospective employees like sustained eye contact, clear articulation of thought, ease and confidence in body language, and a sense of humility. These qualities can pay off in spades when your employees get to know your guests and spend extensive time with them.

When things go wrong and a guest’s experience is blown off track, a skilled practitioner of hospitality must swoop in. It’s much more effective to deal with a guest in real time than to find that they’ve already left and begun complaining on social media.

“With each moment that passes after the guest leaves and they feel like they weren’t heard, they have the potential to become more upset,” Taylor said. “I always tell my staff, ‘If you see or hear something, say something!’ In layman’s terms, I like to call it ‘No Guest Left Behind.’ Get in there as quick as possible, listen to their complaints, acknowledge their feelings and act accordingly to remedy the situation.

David Flaherty

 
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