David Boynton

Tipping is a terrible model for feedback. You don’t know if a low tip means bad service or bad food. Maybe a foreign guest is not used to tipping 20 percent, or maybe someone just can’t afford it.

As co-owner of 7th Settlement Brewery in Dover, New Hampshire, I’ve been thinking about switching to a business model that includes service charges, coined “Hospitality Included” by restaurateur Danny Meyer, for two years. We just officially implemented it on Labor Day, and it’s going great.

Getting better feedback was a big part of the decision, but it was also about being able to be more equitable in our pay for front-of-house and back-of-house.

To me, it’s not worth running a business if we can’t also meet the social and ecological bottom lines that I’m responsible for as a community member and a community leader.

The history of tipping is rooted in slavery. The practice became entrenched in the American system when tavern owners had slaves work only for tips. When you look at the sexual harassment in the industry and the discrimination in the industry, it’s all driven around tips. It’s all driven by that perceived control of the guest over someone’s wages.

It’s just a bad situation for everyone, so why can’t we have a healthier, more fun, more relaxed environment for the guests and the employees? That’s what we’re really shooting for.

So what does it look like?

From the customer perspective, the only difference is slightly increased menu prices and no tip line on the credit card slip. We have an example on the front of our menu that shows the guest that they’re either saving money or that there’s just a slight difference from what their previous check would’ve looked like with our old menu prices and the standard tip of 18 or 20 percent.

 To me, it’s not worth running a business if we can’t also meet the social and ecological bottom lines that I’m responsible for as a community member and a community leader.

As for staff, our current system is based in revenue sharing, so front-of-house staff are receiving a higher hourly wage, plus a percentage of revenue share with their sales. Based on tenure with the company, we also offer full-time folks paid time off, and contribution to heath benefits.

Over the past year, through rigorous recording from our staff, we analyzed front-of-house servers’ cash tips, what they tip out to food runners, and bartenders tips. They were willing to record exactly what they get, and we were able to come up with their average hourly wage.

We’ve promised them that we’ll even adjust the rates that we’re using if it doesn’t work out and they’re not making at least their average hourly wage.

 The history of tipping is rooted in slavery. The practice became entrenched in the American system when tavern owners had slaves work only for tips.

Then for the back-of-house, we increased their wages over the winter and spring, which we’re now finally able to afford.

We see as phase one. Phase two is to also have a revenue sharing program with the cooks, the back-of-house and the management staff. On the back end, our eventual goal would be to go more salary- or hourly wage-based.

We’re just waiting for it to stabilize. Change is difficult for everyone.

As far as staff goes, even our most skeptical staff are really enthusiastic now that it’s been implemented. There’s a new feeling in the restaurant, where there’s less pressure. Staff are going to provide good service, or the best service they can, regardless of a tip, so now they can approach their shift with a positive attitude of just doing the best they can instead of worrying about who is a good tipper or who is a bad tipper.

 Change is difficult for everyone.

Response from guests has been overwhelmingly positive. We’re very deliberate, talking to each table as they sit down. People are on board. I think that speaks a lot to the education we did over the past two to three months.

But it can still be a little awkward for them. Some guests feel like they’re doing something wrong or screwing over the staff because they’re not leaving a tip. It’s so embedded in our culture that it feels wrong to them, but we tell them that the best thing they can do to thank us for good service or food is to come back and bring friends.

Then, wages go up across the entire company.

I’ve heard comments on Facebook saying this is just us as business owners trying to make more profits, when, in reality, it’s actually the most egalitarian approach you can take. We’re being transparent, but we’re also being very clear that the goal of the organization is not to reduce the pay for the front of the house, but to bring everyone up through a more resilient and stable business model.

  We’re very deliberate, talking to each table as they sit down. People are on board.

One positive already is that we’re able to hire and retain more qualified staff in the kitchen. In this industry, that’s one of the biggest challenges. For six months, I couldn’t hire four staff for key positions in my kitchen, and when this was announced in June, I had those four positions filled in three weeks.

Applications went up in the back-of-house, and in the front-of-house, they changed to more career-focused people. People realize it’s a way to get a car loan, or health insurance, or paid time off. This is an industry where you can make great money, but it’s really difficult to achieve that work-life balance. Hospitality Included promotes that balance.

Because we’re paying them better, staff is happier coming to work every day. And it only stands to improve.

We’re a farm-to-table scratch kitchen with about 85 percent local food. We bake all of our bread in-house, we do a lot of our own butchering and we make our own ketchup, dressing, aioli, you name it. So we have a lot of staff–45 people–and the bulk of that is in the kitchen. The longer they stay on, the faster they get, the better they get, the more efficient they get. The more efficient they get, the better service gets because guests can get their food faster.

 Applications went up in the back-of-house, and in the front-of-house, they changed to more career-focused people.

That’s what we hope will work for our restaurant. I’m not saying that the way we’re doing it is right for every restaurant. I think every restaurant needs to make their own decision on how they implement it, what their thresholds are, and what they want for their employees and guests.

One piece of advice: Don’t worry about negative comments online. I’ve been called a communist, just ridiculous things. Those commenter’s only credentials are access to the internet. There’s probably a small percentage of people who hate this idea and a small percentage who really love this idea, but the majority of our revenue coming in is from those guests who are indifferent or mildly interested. We’re not going to ignore negative feedback, but we’re not going to base our business decisions on it.

We influence our guest experience all the time, whether they like it or not. We chose not to have TVs in our restaurant. We have community tables where we sit strangers together. This is just something else you can control.

Understanding the responsibility to your community, to your employees and to your guests, I think, you’ll find you can make a decision like this.

For me, it’s about the outcomes. It’s not about how we get there.

Where do you stand? Contribute to my conversation about banning tipping here.
Written by

David is a Co-Founder and the General Manager of 7th Settlement Brewery, LLC in Dover, NH. He leads a team of 50 employees in a craft brewery and farm to table restaurant. Since opening, 7th Settlement has won a Gold Medal at the 2015 GABF (the largest beer competition in the world), named Small Business of the Year by the Greater Dover Area Chamber of Commerce in 2016, and Best New Restaurant by New Hampshire Magazine in 2014.

David has always focused on the community economy with his own small businesses and working with non-profits as Director at Seacoast Local and a founding board member of Dover Listens. An entrepreneur at heart he has helped several other entrepreneurs start and succeed through his activities with Chamber of Commerce and these non-profits.

As a lecturer at the Paul College of Business and Economics at the University of New Hampshire David combines his organizational management experience with his background in corporate team development; working with local and national companies leading high impact and experiential learning programs.

David earned a Master’s in Business Administration, in Organizational and Environmental Sustainability from Antioch New England in 2011 and a BS in Kinesiology: Outdoor Education from the University of New Hampshire in 2003.

David’s diverse educational and professional background is focused on a renaissance approach to community development, organizational change management, cultural and team development, a mastery of decision-making and critical systems thinking skills, and value based leadership.

  • Probably the worst diatribe on the issues surrounding tipping I’ve ever read.

    • Meghan Kavanaugh

      I know tipping can be a controversial issue, especially as restaurants explore new strategies. Do you have experience in this area? What have you found works best?

    • Hi Jeffrey, I’m interested in learning more what you mean? I don’t think this is forceful and bitter, but a more realistic and thorough account of reality. I’m not sure how you’re mindset is informing your opinions on this issue but the goal is a better experience for everyone involved. Which issues specifically do you disagree with my assessment of? Thanks for joining the conversation.