An Open Letter to Our Valued Guests and The Chicago Dining Community
As a small, independently owned and operated restaurant, we believe in serving the highest quality food and drink at fair prices with warm, attentive service. We care for our guests and want to provide the best for them. We also value each and every member of our team, and truly believe that all positions are equally integral to providing the guest with their dining experience. We are committed to creating a sustainable life and healthy work environment for all those we employ.
This letter is an effort to create awareness of a new initiative we are taking, which we believe to be a movement in the right direction for our restaurant and similar small restaurants. With your support, we have an opportunity to take progressive steps towards fair wages and health benefits for all of our team members. We are committed to making these steps clear and transparent, so that our guests can be confident in the business that they are supporting.
The current tipping structure in the United States is an antiquated paradigm, which has resulted in wage disparity between front-of-house and back-of-house employees in full-service restaurants for decades. Back-of-house staff lay the foundation for dining experiences in venues all over the country, but do not typically have access to fair wages and/or basic health benefits. The entirety of the customer’s tip is the legal property of the front-of-house staff, making it inaccessible to the back-of-house – either to increase their wages or to provide them with healthcare and benefits. Because this tip is such a large percentage of the customer’s check, it leads to massive income inequality between the staff who has access to it and the staff who do not. This increasing inequality is unjust and unsustainable, and treats these hardworking individuals like second-class citizens.
For restaurants on either end of the spectrum, from fast casual chains to high-end tasting menus, the cost of providing higher wages and health benefits for their back-of-house employees is rolled into the prices of individual items or fixed price menus. But for full-service, a la carte restaurants, the balance between offering reasonably priced menu items and maintaining the staff required to prep, cook, serve, and clean them proves extremely difficult to strike.
Additionally, casual chains and restaurant groups have large scale buying power and the ability to mass produce ingredients, both of which drive down the cost of doing business. Based on our core values, these practices do not resonate with us. We wish to provide our guests with high quality, from-scratch, handmade dishes made from the best ingredients possible. We make massive efforts to support sustainable, local, humane farming practices, and to utilize organic and natural ingredients whenever possible. We care for our guests and want to provide what is best for them, while still supporting the ecosystems that make delicious food possible. Unfortunately, this means that margins for restaurants like ours are significantly reduced, making it difficult compete for talented personnel when it comes to higher wages and benefits.
Every year across the country, more and more restaurants are opening, but independent operations such as ours find it difficult to offer competitive wages when compared to large restaurant groups and fast casual chains. Those that do manage to keep their heads above water are still financially unable to provide the basic employee benefits that other industries take for granted. For a restaurant to offer health benefits outside of the umbrella of the corporate restaurant group is almost unheard of. This is what we seek to change.
Our Hospitality Provision is two-fold in its design. It both seeks to provide health benefits to all employees, as well as significantly diminish the wage disparity between traditionally tipped (servers, bartenders, food runners, etc) and non-tipped employees (chefs, prep cooks, dishwashers, and line cooks). We here at Fat Rice have always been advocates of change, and with the support of our community, we believe that we can better provide for the staff who put their labor and love into the food on our tables.
Therefore, beginning January 1st 2019, Fat Rice, The Bakery at Fat Rice and The Ladies’ Room will be raising the cost of our dining experience to provide fair wages and health benefits for our team members. Rather than implementing this cost by increasing prices of individual menu items, we have decided to take a path that encourages transparency and does not further aggravate the inequality between front- and back-of-house wages. To this end, we are adding a 4% Hospitality Provision to all guest checks. After careful research, we have come to the conclusion that this is the best way to reduce wage disparity and provide health benefits for all full time employees. No portion of this Hospitality Provision will go to ownership wages or investor dividends.
This has been a long-anticipated, carefully considered decision that we believe is the clearest path forward, both for our restaurant and for the many restaurants across the country already adopting a similar structure. This has been a difficult decision for us, and involves great risk on our part. But it is the best way we see to help fix a complex problem, and we ask for the support and understanding of our guests and community to do so.
We appreciate your continued support of the entire Fat Rice team, and we look forward to serving you.
Merely raising prices discourages transparency between the restaurant and the guest. By delineating our price increase to a line item, it ensures that our guests can be confident that this additional income directly towards the staff who need it most. Additionally, merely raising prices actually perpetuates the wage gap between front- and back-of-house, as increased prices results in increased tips, which cannot subsidize benefits or back-of-house wages. While this decision is a risk for us, but our commitment to honesty with our supporters and our community makes us unwilling to simply disguise it in other ways.
Why not eliminate tipping altogether, or implement a service charge/auto-gratuity?
As imperfect as it is, tipping is the system currently embedded into the restaurant structure. We do not want to disempower our guests by removing their voice from their dining experience.
Why not share tips with the Back of House?
While sharing tips across the entire restaurant would partially help balance out inequality, it would not contribute to fair wages for salaried employees, both in the back of house and front of house, or to providing benefits like health insurance.
Why not just cut costs?
We at Fat Rice believe passionately in local farms, quality ingredients, and in cooking dishes from scratch. While we work diligently to be as efficient and waste-reductive as possible, cutting costs by diminishing the quality of our dishes or ingredients is simply not an option. It would be a disservice to our staff, our producers, our core values, and our guests.
Why don’t you reduce ownership / investor dividends?
With already razor-thin margins and rising costs, many restaurants (including ours) simply don’t have the resources to provide these staff benefits without changing the status quo.
Are you worried about how your guests will react?
Having spoken with owners who have adopted similar models across the country, we believe that our guests will understand why these changes are necessary, and why they are good for the restaurant industry as a whole. However, since we know that this may be an adjustment for some guests, we are also slightly reducing our suggested gratuity on guest checks from the traditional 18% / 20% / 22% to 16% / 18% / 20%.
Why don’t you stop giving donations or doing charity events?
We believe deeply in supporting our community and contributing to charitable organizations that align with the values of our team members. We wish to continue this support of the greater Chicago community, beyond just the restaurant industry.