Restaurant near Panama City Beach requires 20% service charge

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Steven Sapp, one of the owners of Shade Bar & Grill, poses on Tuesday, June 4, 2022 in Panama City Beach, Florida. The restaurant instituted a 20% service charge on its restaurant bills to cover increased costs. (Mike Fender / News Herald via AP)

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For Steven Sapp, director of operations at Shades Bar & Grill, the addition of a service charge not only ensures that its waiters and waitresses will be paid properly for their work, but also saves the company from having to inflate prices for their work. cope with rising labor costs.

Located along County Road 30A in Walton County, the restaurant implemented a 20% service charge on December 27, theoretically requiring all customers to tip at least 20%, regardless of or the level of service they receive. Some industry advocates say some restaurants in the state have started considering similar changes to their business models as food and labor costs rise.

However, the owner of at least one restaurant in Panama City Beach is concerned that a large mandatory fee could be the cause of good service because a good tip is guaranteed.

“Everyone claims there is at least 20% dump body and a lot of people are, but the point is, there are a lot of people who aren’t,” Sapp said. “In the industry we’re in, (20%) has sort of been commonplace for a long time. If you get less than (that), it feels like you did something wrong or something went wrong.

He also noted that the fee, designed to establish a commission-based business model, was triggered by rising food costs and Amendment 2, which Florida voters passed in November to raise the minimum wage by $ 1 each year until 2026.

Shades publicly announced the charges in a Facebook post on December 31. As of the morning of January 3, it had elicited nearly 140 reactions, over 160 comments and around 30 shares.

The post, which appeared to have been deleted on Jan.5, also stated that servers would collect 17% of the fee and the rest would be distributed to other staff. Any additional “tips” will go directly to the server.

Comments on the post were simply polarizing, with people supporting the addition and a few frustrated with the decision.

“There is no doubt that we knew it wouldn’t be a 100% positive experience for every person, just as we know there are people who come in and will only tip 5% of their bill,” Sapp said. “We didn’t think he would get as much popularity as he has, but we expected some negative feedback.”

Among those who commented was Alice Barrett of Panama City Beach, who said she “fully” supported the charge and was “very shocked” by some of the negative comments.

“I’m a 20-25% rocker,” Barrett wrote in an email. “(The waiters) work hard for their money and sometimes end up without a tip, so I think they’ll make more money from this concept.

“… The owners and staff (of Shades) have always been so great,” she added. “I applaud their transparency and their willingness to educate consumers before entering the doors.”

Tim Jacobi, owner of Angry Tuna Seafood Company at Pier Park, said that while the fees may seem good at first glance, they could create a “dangerous game” in which the servers become complacent and the customer experience is compromised.

Angry Tuna doesn’t have a service charge, but he does add tips to the bill for parties with more than six people from time to time, Jacobi noted.

“What ends up happening is sooner rather than later, (the servers) take advantage (and) most people just do what they have to do to get the money,” he said. “They don’t want to go beyond (more) anymore.”

Jacobi also said that while a tip of at least 20% might be the norm in high-end areas like along 30A, it is not for the entire restaurant industry.

“(About) 15% is the norm, 20% means you did a great job and nothing more, it’s because people are generous,” he said. “It’s not normal. (everywhere) to get 20% tips all the time. “

According to Geoff Luebkemann, senior vice president of the Florida Restaurant and Lodging Association, “there are a number of renowned restaurateurs” across Florida who are striving to reshape the way their employees are paid.

They do this either by integrating a service charge into the menu prices, or by adding separate charges like at Shades Bar & Grill.

“The traditional tip model, while very ingrained in the fabric of our society and industry, has some drawbacks,” said Luebkemann. “(The service charge) can enter the thinking of any operator looking for a way to create more parody between base salaries and base salaries. “

He also said that while it’s important for companies using the new model to keep tabs on servers and only hire highly skilled employees, those who do a good job will always shine and be rewarded.

“One of the things that people who are really successful in food and beverage operations understand is that the more they sell, the more tips they generate,” Luebkemann said. “As you move away from a direct tip model … then you can recognize the people at the front of the house who have honed their skills (and) have excellent menu knowledge, (this which) leads to a higher checking average .. (and) a higher commission. “


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