January 12, 2016
Subject: Our Commitment to Our Staff, Community and $15 Now
As we begin a new year there is much to be hopeful for and certainly much to
be thankful for. 2016 is going to be a year of change, adjustments and another
delicious season to look forward to from our Prosser Farm. Our two new
restaurants that opened in 2015, The Carlile Room and Cantina Leña, are
prospering and have been well reviewed. Thank you to all who have written
notes of congrats and even constructive comments for us to learn
from. Opening a new restaurant is never easy, but it sure is fun!!
The biggest question for our company in 2014/2015 was, how Tom Douglas
Restaurants would respond to the new minimum wage. Because of our size, of
which I am quite proud, our minimum wage schedule is accelerated versus many
of our peers. We are committed to everyone on our team making $15 or more
immediately instead of following the schedule as laid out in the Seattle
ordinance regulations.
Starting February 1st we will start adding a 20% service charge in place of
gratuity in three of our restaurants, The Carlile Room, Palace Kitchen and Dahlia
Lounge. Our research and internal data shows that this is the average amount
our customers tipped for the last 3 years. This charge will go to "the house" and
then 100% of the charge will be redistributed to our team through wages,
commissions and benefits.
As you can probably imagine, creating this new system will take a period of
adjustment for both our team and for you, our fabulous customers. We
anticipate that our other full service restaurants will follow this path by the end
of March.
If at any point your experience was not up to your or our standard of
deliciousness served with graciousness, simply ask a manager for a refund of
your bill. Please feel free to drop us a note to [email protected] if you
have any questions or see below for more detailed information on our plan.
In addition to our commitment to our restaurant staff, we at Tom Douglas
Restaurants, believe that everyone deserves a nutritious meal every day whether
they can afford it or not. We are excited to support the building of Food
Lifeline's new "Hunger Solution Center” in a big way. Tom Douglas Restaurants
has committed donating $1 million dollars over the next ten years. I have been
co-chairing the $35 million dollar capital campaign for the last four years and we
only need $5 million more to reach our goal.
Food Lifeline is dedicated to serving our neighbors who need a healthy and
nutritious meal in Seattle and the whole of Western Washington. In 2015 alone,
40 million pounds of food were distributed to those in need. Please, if you feel
so inclined, join us in making this dream distribution center a reality. Look for
one of the Food Lifeline envelopes at any of our joints in order to donate any
amount and let’s get this thing built for all of us. Hunger doesn't have to
happen!
Cheers and happy new year,
Tom
Tom Douglas
Our company has chosen to adopt the 20% service charge model in order
stabilize wages for our entire team. The higher minimum wage required by the
Seattle City Council for companies of our size adds a significant and
unprecedented payroll expense. With a service charge, in place of the waiter
receiving tips, the company collects the money and distributes it to everyone
involved in the meal preparation and service.
With the service charge we will be able to collect and distribute adequate funds
to:
1) Be ahead of the Seattle wage ordinance time frame for large companies
by having everyone in the company at $15.00 now.
2) Afford the minimum wage increase - Just one year ago, minimum wage was
at $9.47 per hour. On January 1st 2016, it is $13 per hour. This $3.53 per hour
increase per person raises our payroll expense by over $1,000,000.
3) Maintain benefits - We do not want to sacrifice our benefits program to pay
for the increased payroll expense. We believe that our staff deserves a rich
medical plan and paid time off benefits. We work hard and our benefits help us
stay healthy and happy. Providing a silver level health plan is an imperative
company value. Paid vacation accruals are available to full and part time
employees as is a 401K. There is a substantial employee discount and staff
meals for every shift.
4) Reward merit for professional achievement - Front of House (wait staff,
bartenders, hosts and bussers) compensation will no longer rely on the
inconsistency of the customer tipping practice. A sales commission is
established for those involved in direct sales and a revenue share is in place for
the rest of the team. This creates the opportunity for the company to provide
raises based on professional skill.
5) Hold menu prices to competitive level - Many of the other “made from
scratch” restaurants in Seattle are not subject to the same minimum wage
schedule of wage increases, so it will be, at most, another 4 years until the
playing field is level in the costs of labor.
6) Participate in changing the culture of tipping - We hold as a goal to
achieve the structure used by other business types where the prices reflect what
the product and service costs.
7) Work towards greater compensation equity for Front of House and Back
of House - In the American tipping system, the majority of the tips stays with
the service staff. With a service charge, the employer can distribute the funds
based on job performance amongst all employees.
8) Offer greater wage stability for our team – The higher hourly wage and
merit based scheduling will provide dependable earnings.
9) Remain financially stable – Without a method to increase revenue we cannot
continue to support our company and coworkers with ongoing improvements,
education, investments and training.
The way forward – This is going to be a challenging transition and will not be
the last adjustment we will need to make. We are taking an expensive risk by
starting with just three restaurants in February, but this will allow us to closely
review and track diner reaction and employee incomes. The revenue share and
sales commission formulas we developed will be scrutinized daily and adjusted
to the best of our abilities to keep everyone close to their historic earning
averages.
The restaurant business is satisfying and an important part of the fabric of a
community, but the reality is that profit margins are small and we need to be
very careful about all of our decisions. Thank you for your continued support and
as always, feel free to contact me with questions and comments.
Pamela Hinckley
CEO/CVO Seattle Kitchen
[email protected]