Some of you have asked why we are charging a 5% restaurant recovery charge and how the funds are being used.
All good relationships have communication at their center; we strive to be crystal clear in our communications and our thinking. We disclose our 5% fee clearly atop all of our menus (both printed and online), in every reservation confirmation email, and in our FAQs on our websites. There are so many industries that add unclear and sometimes seemingly hidden fees to bills, which we find frustrating and misleading. Our goal is to be transparent about why we have added this fee.
Very simply, our industry, and our restaurants, have been crushed by the pandemic and continue to face pandemic ripples and shockwaves. At times over the past 20 months, in all seven of our restaurants, we’ve struggled to pay our debts and rent, even as many of our landlords have been helpful. We are still dealing with cash losses in some of our restaurants and have incurred debts that need to be paid. In all our restaurants, we are continuing to face increased costs due to the pandemic and supply chain difficulties.
The bottom line: Our original business model has been upended by the pandemic, and the only way for us to survive is to increase our costs for our guests. Without figuring out a way to change and evolve our business model quickly, we’d be done for. This evolution and adaptation currently includes our 5% restaurant recovery fee, which helps us cover many new and different parts of our operations, such as:
The government support thru the PPP programs has ended, and no more support is in sight. It is a challenging time.
Some have asked why not just increase the prices on your menus? There are multiple reasons we have chosen to use this 5% fee. For starters, our hope is the pandemic ends, and then a restaurant recovery can be complete, and the fee can go away. Rather than raising and lowering prices, potentially multiple times as Pandemic-impacts ebb and flow, the use of a fee allows our prices to stay the same, and the fee can come and go. In addition, the administration of a price change in a restaurant is real work, and many restaurants have less office and administrative support than ever. To change every single menu item price in the database and reprint our menus only to potentially change it back is additional cost avoided by using a fee. Finally, a 5% price increase does not generate a 5% revenue increase. The intersection of economics and psychology means that consumer choices change as prices cross thresholds.
The vast majority of our guests do not express any concern about the fee to us, and when a guest does, we engage in conversation, and in the event that the guest would like the fee removed, we’re prompt with removing it from their check. We’re in the making friends business, we’re in the business of serving delicious food & drink, and we’re in the business of caring for our employees and our communities. To do these things, we need to ensure we stay in business.
For us, all roads lead back to hospitality, sustainability, and our long-term commitment to American family farmers. We sincerely appreciate your support. We promise to maintain our transparency as we continue to navigate our recovery. We also promise that we’ll keep taking care of our team, the farmers that we buy from, and you, our guests.
Michael Vucurevich & Dan Simons,