In the fall of 2021, we engaged in research to find the best and most cost effective way to pay our kitchen staff better than industry standard wages while saving our guests money.
As most people are probably aware by now, the cost of food (along with costs in other supply chains) skyrocketed during COVID. Most restaurants were forced to raise prices to offset costs and we chose to do smaller menu price increases than the industry average, thereby absorbing some of those costs, resulting in much lower margin.
But how to keep menu prices lower without significantly raising our menu prices and still be able to pay employees a higher base wage? The answer to this was the key to recruiting and employee retention.
Enter the 4% kitchen appreciation fee. We found through research that many restaurants across the country implemented this kind of fee to great success – some as high as 12%. We calculated the lowest fee that would allow us to supplement employee base wage. The resulting 4% kitchen appreciation fee led to higher wages, lower menu prices, and lower meals and rooms taxes paid by guests.
The bottom line is that a kitchen appreciation fee saves customers an average of 10% over higher menu prices & taxes.
All this said, if a guest is uncomfortable with this fee, we will gladly comply with a guest request to remove the kitchen appreciation fee from their bill.
We have found close to 99% of our guests agree with this approach without question. For those who question it, once we explain the reasoning, guest agreement is virtually 100%.