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Chicago to Phase Out the Tip Credit

Chicago to Phase Out the Tip Credit

by David Klemt

Closeup shot of the flag of the City of Chicago with Wrigley Building in background

In a move that some are celebrating and others claim will kill jobs, Chicago will phase out the tip credit incrementally by the year 2028.

Currently, pay for tipped workers amounts to 60 percent of the minimum wage. Starting next year, that will change.

Beginning July 1, 2024, tipped workers will earn eight-percent increases on an annual basis. This will continue until July 1, 2028. On that date, tipped workers must receive the full minimum wage.

Put another way, the city of Chicago will eliminate the tip credit entirely midway through 2028. To add clarification, this phasing out of the tax credit applies to all 77 of the city’s neighborhoods.

Overwhelmingly, Chicago’s City Council voted for the so-called “One Fair Wage Ordinance.” Thirty-six alderpeople voted “yea,” while just ten voted “nay.”

As one would expect, not everyone is happy that the ordinance was passed on Friday, October 6. Nor are they pleased that Mayor Brandon Johnson signed off on the bill a week ago today.

Specifically, Alderman Nicholas Sposato referred to the One Fair Wage Ordinance as a “job and business killer.”

Further, as reported by Restaurant Dive last week, the Illinois Restaurant Association opposes the decision to eliminate the tip credit in Chicago.

“We wholeheartedly disagree with the decision to move forward with the elimination of the tip credit,” Restaurant Dive reports a representative of the IRA saying in a statement emailed to the publication.

The National Restaurant Association also opposes the ordinance, reportedly vowing to fight any such legislation that introduced throughout the country.

However, One Fair Wage and the Service Employees International Union are celebrating the plan to phase out the tip credit. However, the SEIU would like the elimination to apply statewide.

A Compromise

Attempting to negotiate for legislation they found more palatable, the IRA had proposed a different approach.

Their version would have seen tipped workers make a minimum of $20.54 per hour. However, that ordinance would only have applied to restaurants that generate $3 million or more in annual revenue. Additionally, the IRA proposed tripling fines related to violations of the proposed ordinance.

Had that proposal been accepted, the pay situation would have been unchanged for tipped workers in smaller operations.

In the end, the IRA agreed to eliminating the tip credit over the course of five years to make the transition smoother for operators. This is due, in part, to the possibility of a two-year phasing out of the tip credit being passed by Chicago’s City Council.

The IRA, NRA, and others who oppose eliminating tip credits point to hardships on the operator side. Increased labor costs will lead to increases in menu prices, reductions in traffic and hours, the elimination of jobs, and, ultimately, the shuttering of many businesses.

However, those who support such ordinance point to the financial stability of vulnerable people, and those who work throughout the industry to earn a living wage.

The Future

While Chicago is the largest city in America to vote to eliminate the tip credit, it’s not the first pass such legislation.

The city joins Alaska, California, Minnesota, Montana, Nevada, and Oregon in doing so. Additionally, Washington, DC, will eliminate the tip credit fully by July 1, 2027. Phase one of DC’s tip credit elimination started May 1 of this year.

Of course, the news out of Chicago also comes on the heels of the FAST Act fight ending in California.

These developments beg the question: Which city or state will introduce legislation next, and how will it play out for workers and operators?

Image: Trace Hudson via Pexels

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Taco Bell Racking Up Rewards Program Wins

Taco Bell Racking Up Rewards Program Wins

by David Klemt

"Say yes to tacos" graffiti

Taco Bell, masters of the limited-time offer and loyalty program, continue to rack up wins with the return of a fan-favorite promotion, and more.

The fast-food giant operates more than 7,800 restaurants in the US alone. However, the company understands that sheer numbers aren’t enough to turn a profit.

Rather, Taco Bell continually proves they understand the power of promotions, loyalty, and LTOs.

The QSR routinely releases specialty items, then packs them away to generate buzz and traffic by making them available once again—for a limited time. Compellingly, Taco Bell also ties their LTOs to their loyalty program. Often times, the only way for guests to enjoy special perks and items is to be a Taco Bell Rewards member.

Not only does this help to engage existing members, this approach drives new program signups.

Case in point: the Taco Lover’s Pass.

National Taco Day Promotion

If you’re industry or a fan of Taco Bell, you should be aware of the Taco Lover’s Pass by now.

Tracing its genesis to 2021 in Arizona, the LTO pops up every now and then. In exchange for $10, those who grab a pass can get one free taco each day for 30 consecutive days.

Oh, and the pass is now only available via the Taco Bell app, and to members of the Taco Bell Rewards program. Again, this is an excellent way to boost engagement. Do guests want to take advantage of this LTO? Great—they’ll need to exchange their info and provide access to themselves to do so.

Normally, the Taco Lover’s Pass is available for purchase for just one day. However, this time around Taco Bell gave rewards members two days to snag one. This is likely due to a new menu item drop coming tomorrow.

For quite some time now, Taco Bell has been hinting that they’ll be making breakfast easier and better. And now we know how they plan to accomplish that goal.

Joining the Seasoned Beef Crunchy Taco, Seasoned Beef Crunchy Taco Supreme, Seasoned Beef Soft Taco, Seasoned Beef Soft Taco Supreme, Spicy Potato Soft Taco, Seasoned Beef Doritos® Locos Tacos, and Seasoned Beef Doritos® Locos Tacos Supreme on the Taco Lover’s Pass is the new Toasted Breakfast Taco.

Today, October 12 (a Taco Tuesday!), Taco Bell drops the Toasted Breakfast Taco, and holders of their coveted pass can grab one for free.

Clearly, Tuesdays are important to Taco Bell. Let’s not forget that they very publicly challenged the “Taco Tuesday” trademark, and very publicly celebrated its cancellation. So, launching an all-new item that will drive traffic to Taco Bell during the breakfast daypart makes perfect sense. The drop also further solidifies their branding and marketing.

Steal a Base…

…Steal a Taco. Not only is the Taco Lover’s Pass back, so is Taco Bell’s Major League Baseball promotion.

And, once again, it’s available only via the Taco Bell app, and only to Taco Bell Rewards members.

Focusing on the Fall Classic, “Steal a Base, Steal a Taco” is a collaboration between Taco Bell, the MLB, and Topps.

Starting October 27 (not a Tuesday), the first player to steal a base will earn the title Taco Hero. That player will also earn free Nacho Cheese Doritos® Locos Tacos for Taco Bell Rewards members.

Taking things further, however, is Topps. The iconic trading card brand has put a limited run of Topps TacoFractor cards into circulation. People who hold the card of the first player to steal a base during the 2023 World Series could win Taco Bell for life. For this promotion, that comes in the form of a digital $15,000 Taco Bell gift card.

Alternatively, the holders of Topps TacoFractor Wild Cards could win the big prize.

On October 10 (a Tuesday!), Taco Bell Rewards members will have the chance to score free Topps Chrome or Cosmic Chrome packs. This limited Tuesday Drop could lead to a Taco Hero card, which in turn can lead to winning Taco Bell for life.

Takeaway

Unquestionably, Taco Bell understands the power of marketing messaging, branding, promotions, and the LTO.

However, they also understand the need for loyalty and rewards programs to do more than just offer discounts and free menu items. A great loyalty program needs to be big, bold, and encourage constant engagement.

With that in mind, it’s more than likely time for most operators, regardless of size, to review and rethink their programs.

Image: Chad Stembridge on Unsplash

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Leisure and Hospitality Adds 96,000 Jobs

Leisure and Hospitality Adds 96,000 Jobs

by David Klemt

"Optimist" graffiti

Update: The figure of 61,000 restaurant and bar jobs was adjusted to 48,300 after revisions.

The latest report from the US Bureau of Labor Statistics reveals that the outlook looks promising for hospitality.

Put together, leisure and hospitality added 96,000 jobs in September. However, hospitality certainly leads the way according to the most recent report.

In particular, the news is wonderful for the restaurant and bar sector. Adding 61,000 jobs in September, “food services and drinking places” are back to February 2020 levels.

Put more simply, restaurants and bars are back to pre-pandemic employment numbers. It has taken more than three years, but we can finally breathe a collective (but cautious) sign of relief.

In fact, one in five jobs created in September was in a restaurant or bar. That’s incredible growth and welcome news.

But reaching this point hasn’t been easy. Operators, along with restaurant and bar workers, have clawed their way through the past several years.

The industry has changed, and operators need to avoid the temptation of regressing. Yes, employment levels are back to where they were before the pandemic. Worker and guest expectations will not return to where they were before February 2020. The changes are here to stay.

Lodging/Accommodation

Unfortunately, not every sector of hospitality is back to pre-pandemic employment levels.

First, the positive news. Lodging (or accommodation, if you prefer) did add jobs in September. Whereas restaurants and bars rose 61,000 jobs, lodging is up 16,000.

That’s good growth and reason to be optimistic regarding that sector. That’s where the good news ends when it comes to hard employment numbers.

On the negative side, lodging hasn’t yet returned to pre-pandemic employment levels. In fact, the sector is remains down by 217,000 jobs when compared to February 2020.

Should lodging/accommodation continue to add jobs at this pace, we could see a full recovery in Q4 2024.

However, the past few years have been an eyeopener for many lodging and accommodation operators. Many hotels, for example, have reduced the sizes of their teams.

It’s possible that as long as guest feedback remains positive, hotels and resorts will continue to operate with smaller teams. Indeed, technological innovations have made it simpler for mid- and large-scale properties to pare back labor.

Takeaway

While returning to pre-pandemic employment levels in restaurants and bars is great news, we must still be cautious.

This is a delicate situation, and one month of growth isn’t enough to shout, “We’re back!” There’s reason to be optimistic, to be sure, but adding jobs is just one part of an equation that features many variables.

For example, the unemployment level in the US remains unchanged at 3.8 percent.

So, be optimistic. Allow yourself to feel some hope. But be cautious. Continue to work toward empowering your teams, increasing traffic and revenue, mastering the guest experience, and achieving short- and long-term goals.

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The Top-performing New Restaurant Type

The Top-performing New Restaurant Type

by David Klemt

A bowl of ramen with beers in the background

According to a midyear Yelp report, one category of new restaurant is experiencing a surge in growth across the US unlike any other.

No, it’s not ramen, as the image above suggests. Instead, it’s pop-up restaurants.

We can trace the growth of this category, at least on the operator side, to cost. Sure, pop-ups were popular before 2020. However, they grew even more popular during the pandemic.

One can argue the life cycle of the pop-up is fad to trend to cost-saving adaptation to proliferation.

There are even those who transform shipping containers into mobile, pop-up restaurants and bars. With the right permits and hookups (water, electricity, etc.), an operator can test a new market or an entirely new concept before committing fully to a brick-and-mortar location.

In other words, the pop-up simply makes sense for our industry. This category of restaurant (or bar) clearly doesn’t cost anywhere as much as its permanent brick-and-mortar counterparts, for one. Secondly, a pop-up doesn’t (shouldn’t, anyway) require more than a skeleton crew. And thirdly, they do seem to enjoy pops in interest whenever they come to a new market or new address.

There are, of course, other benefits. However, the low(er) cost is the most attractive element for most operators.

Keep in mind that Double Chicken Please started life as a pop-up cocktail concept. In fact, DCP is the current Best Bar in North America according to the World’s 50 Best Bars.

Covering more than 10,000 miles and serving over 1,200 cocktails, the DCP pop-up toured the US for three years before finding a brick-and-mortar home. And what a home. The concept is now a jewel in New York’s Lower East Side F&B crown.

Top Restaurant Types by Opening

According to Yelp, the following restaurant categories are experiencing the most growth.

The numbers below represent the changes in business openings from April 2021 to March 2022 in comparison to April 2022 to March 2023.

  • Pop-ups: +105 percent
  • Ramen: +45 percent
  • Noodles: +40 percent
  • Tacos: +28 percent
  • Chicken shops: +28 percent
  • Food stands: +23 percent
  • Japanese: +20 percent
  • Breakfast and brunch: +20 percent
  • Sushi: +13 percent
  • Steakhouses: +9 percent

As the numbers above show, the growth of pop-ups far exceeds that of any of the other categories. In fact, they’re growing by nearly three times that of the second-place category, ramen restaurants.

Make a Pop-up Work for You

For a pop-up to work the concept must be realized fully. The brand and its story must be communicated clearly.

And while the menus can perhaps change more easily, signatures should be dialed in to generate buzz.

At KRG Hospitality, our view of pop-ups is a popular one. We think they’re excellent branding tools and are a viable way for new operators to test the waters.

However, we believe that a successful pop-up should be paired with a fully customized feasibility study and in-depth concept development. Both are core services offered by KRG Hospitality, and both are specialties that set us apart.

They may be mobile, they may feel niche and “temporary” or experimental, but they’re still a business.

A pop-up can only transform into a brick-and-mortar concept with a shot at longevity if the operator treats it as a roving proving ground.

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Pumpkin Spice Everything is Already Here

Pumpkin Spice Everything is Already Here

by David Klemt

Black and white image of jack-o'-lantern with smoke coming of its eyes

In what perhaps is an attempt to encourage people to think of cooler autumnal temperatures, pumpkin spice is descending upon us earlier than ever before.

Operators who are finalizing their pumpkin spice menu items are basically already late to the party.

Luckily, it isn’t like the brands for which fall’s most infamous LTO flavor works are too far behind. A significant percentage of consumers are drawn to pumpkin spice menu items like trick or treaters to homes handing out full-size candy bars.

So, operators still have time to put the final touches on pumpkin spice menu items…but they’ll want to get a move on.

That’s exactly what restaurant chains did this year. Their pumpkin spice-flavored onslaught began with the start of this month.

Pumpkin Spice, Now a Summer Flavor?

Spirit Halloween stores. Christmas music. And now, it appears, Pumpkin Spice.

What do these three things have in common? Well, it seems like they’re making their debuts earlier and earlier each year.

When we think of summer and seasonality, I don’t think pumpkin or even baking spices enters into most people’s minds.

Unless, however, those people are in marketing and branding.

According to Restaurant Business, Krispy Kreme went all in on pumpkin spice on August 7. On that day, the chain unveiled four donuts and a number of beverages featuring pumpkin flavors.

Interestingly, the company’s global chief brand officer, Dave Skena, states that their pumpkin spice releases came one day earlier this year. Last year, they say, pumpkin spice arrived “significantly earlier than the year before.”

7-11 may have crossed the pumpkin spice dateline first this year. Dunkin’ is already offering pumpkin spice F&B items. And Starbucks, famous for their PSL LTO, is rumored to be launching their specialty menu this Thursday.

Given these August releases, can we expect a brand to attempt to get the jump on everyone else and launch pumpkin spice LTOs in July?

Consumer Cravings

Brands wouldn’t gamble on releasing their pumpkin spice LTOs in August if they didn’t think their decision would pay off.

Considering what Krispy Kreme’s Skena says about pumpkin spice’s August arrival, consumers have already spoken. Apparently, a significant percentage of people have an interest in fall flavors midway through summer.

Of course, there are a few considerations for independent operators in terms of seasonal releases. Rolling out new menus and menu items can be a costly endeavor. Pulling the plug on one revenue-generating seasonal menu or LTO in favor of significantly different items may be harmful to the bottom line.

One approach operators could take is to plan far enough ahead to pull the trigger on LTOs when 7-11, Dunkin’, or Starbucks launch theirs. In other words, be ready, but don’t jump the gun.

This also speaks to the importance of operators knowing their core guests and listening to feedback. Are front-of-house staff hearing murmurs from guests that they’re craving new flavors? Perhaps it could be lucrative to leverage that anticipation.

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Use this Powerful Communication Style

The Powerful Communication Style You Should Be Using

by Jennifer Radkey

Graffiti that reads, "It doesn't have to be so complicated"

There’s a powerful method of communication operators can learn to use that promotes workplace collaboration and solves problems.

How to communicate with team members is a topic that comes up regularly in my coaching sessions with restaurant, bar, and hotel owners. Most of the concerns center around how to speak to employees when they are not following company policy; their level of service is not meeting company standards; or the quality of their work has decreased.

These are legitimate concerns when you are attempting to not only run a successful business but foster a positive work culture in your establishment.

After coaching my clients through understanding what their current style of communication looks like and how it is or is not working for them, I introduce them to a style of communication that I feel leads to the most effective overall results: the use of declarative language.

The declarative language approach was first introduced to me through a positive parenting online conference I attended. Author Linda Murphy wrote the Declarative Language Handbook, which teaches parents, caregivers, educators, and others how to communicate with children (particularly those with social learning challenges) to feel competent, connected, and understood.

As I dove into learning about this style of communication, I realized just how powerful it would be in the workplace. It is a method that can promote respect, collaboration, and empowerment. It can also, in turn, remove judgment, assumptions, hostility, and blame.

What is Declarative Language?

To answer this question, I’ll need to take you back for a quick grammar lesson.

Sentences can be categorized under four main types: declarative, interrogative, imperative, and exclamatory.

Declarative sentences are statements. These can be a statement of a fact, an observation, or a feeling. For example: “It is raining out.” “I’m going to open a new bar next month.” “Pineapple should never be on pizza.”

Interrogative sentences ask a question: “Why are you late for your shift?” “How can I make a million dollars this quarter?” “Who ever thought it was a good idea to put pineapple on pizza?”

Imperative sentences give a command. “Go clean those tables.” “Follow me.” “Pick off the pineapple from that pizza.”

Exclamatory sentences show something that we would shout or emphasize with an exclamation mark: “I made a million dollars this quarter!” “Yikes!” “Pineapple on pizza is the best ever!”

Powerful Communication

So, now that you’ve had a grammar refresher, let’s take a look at how declarative language can be a powerful method for communicating, and why the other styles may not be creating the results you want to see.

As an owner or manager, you may often find yourself falling into the use of interrogative and imperative statements. The problem with this is that both styles can stir up negative emotions in the person on the receiving end.

Interrogative statements (questions) tend to incite the fight, flight, or freeze mode. People feel put on the spot and may become defensive or anxious.

Imperative statements (commands) tend to be authoritarian in nature and have the potential to create fear and/or resentment. Employees are looking for team leaders who they can respect and turn to for guidance, not someone who is constantly telling them what to do.

Declarative language, when used to state observations, can be a way to open up discussions without defensiveness or fear. It also leaves room for facts instead of assumptions. The declarative language approach that I suggest my clients use looks something like this:

  • Make an observation statement.
  • Be silent.
  • Actively listen.
  • Collaborate.
  • Actively listen.
  • Proactively decide on solutions.
  • Gratitude/Positivity.

The easiest way to demonstrate this practice is through an example or two. First, we’ll look at an example with “Sam.”

Example #1

Sam just showed up for his shift at the quick-service restaurant he works at out of uniform. His manager notices and approaches him. The declarative language approach would look something like the example below.

Manager: Hey Sam, I notice that you aren’t wearing your uniform. (Declarative observation that quietly gives time for Sam to respond.)

Sam: Yeah, sorry, I spilled coffee all down the front of my shirt on the way here and didn’t have time to go home to change.

Manager: Okay, I understand, life happens. Any ideas on how we can resolve this? (Puts power to solve the problem in Sam’s hands.)

Sam: Do you have an extra shirt I can borrow for today’s shift?

Manager: Yeah, I actually do. Great plan. Let me go grab it for you and you can use the staff washroom to get changed.

Sam: Thanks.

Manager: No problem. Have a great shift! See you out there.

As you can see from this exchange, the manager did not make any assumptions as to why Sam wasn’t in uniform. Instead, they demonstrated empathy and respect. By asking if Sam had any ideas for resolving the issue, the manager provided room for collaboration as a team. Further, this approach empowered Sam to take responsibility and come up with the solution.

Example #2

Now, let’s look at “Lisa.”

Lisa is typically very punctual for her shift working concierge at a hotel. However, the past two weeks she has been regularly showing up 10 to 15 minutes late. Below, how the owner of the hotel would use the declarative language approach to discuss this issue with Lisa.

Owner: Hi Lisa, I’ve noticed that you have been starting your shift 10 to 15 mins late the past couple of weeks. You aren’t typically late for work. I’m curious about what’s changed. (Declarative observation; the owner then waits quietly for Lisa to respond.)

Lisa: I’m so sorry, I had to switch my child’s daycare and it’s on the other side of town. I’m struggling making it here on time with traffic.

Owner: That sounds stressful. What do you think we can do to work with this change to ensure that you can still arrive on time for your shifts?

Lisa: Would it be possible to switch my shift to a later time?

Owner: Let me look into that option for you. You are an asset to our team and I’m sure we will find a solution to this. I’ll get back to you later with some options, and you can let me know what would work best.

Lisa: Thank you so much for understanding.

In this exchange, the owner does not make assumptions as to why Lisa has been late. Rather, they show genuine curiosity as to what’s going on. Again, the owner empathizes with Lisa’s situation and then places power back into Lisa’s hands to think of a solution. The conversation ends on a positive note with gained clarity, respect, and appreciation.

Lead by Example

If you are looking to build a team of empowered individuals who can solve problems and collaborate, you need to lead by example. The use of declarative language can help you accomplish exactly that.

However, it is crucial to note that if you decide to try this method of communication, your intention needs to be positive. Declarative statements will not be as successful if your tone is sarcastic or accusing. Your approach must be casual, caring, respectful, and matter of fact.

Additionally, not every conversation will go smoothly using this method. You may receive “I don’t know” or “I’m not sure” as an answer. But for the most part, this method of communication allows for respectful discussion that acknowledges facts, promotes responsibility for one’s own actions, and decreases assumptions.

If you would like more information on how to use the declarative language approach, or would like to set up a coaching session to be coached on how to use this communication style with your team, please reach out to me!

Cheers to professional and personal well-being!

Image: Jon Tyson on Unsplash

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Raise the Bar: Service vs. Hospitality

Raise the Bar: Service vs. Hospitality

by David Klemt

Several spray paint cans next to one another

During the 2023 Bar & Restaurant Expo in Las Vegas, Mia Mastroianni, Art Sutley, and Phil Wills addressed what separates service from hospitality.

For the sake of those who are unfamiliar, a brief summary of each member of this informative panel. Art Sutley is a nightlife and hospitality expert recognized by Forbes, the Wall Street Journal, and Thrillist (among other publications).

Phil Wills and Mia Mastroianni should be recognizable to anyone who has watched Bar Rescue. Wills co-founded Spirits in Motion, a beverage consulting agency. He’s also a bartender’s bartender who’s passionate about hospitality. Mastroianni, equally as passionate about the art of hospitality, is a seriously talented bar professional and hospitality expert who doesn’t take herself too seriously.

It’s difficult to imagine a more qualified trio when it comes to discussing the differences between service and hospitality.

What is Service?

Before they all dove in, Sutley shared a simple but impactful take on the guest experience.

“It’s checking boxes,” said Sutley. “We want each guest to check every box, and a few extra.”

That description helps draw a line between service and hospitality. Per Sutley, Mastroianni, and Wills, service is a transaction and meeting expectations. Reinforcing this idea, Wills said, “Service is black and white; it’s simple.”

Operators and their leadership teams, after developing their steps of service, can literally or figuratively track the service transaction. Training staff—from onboarding to pre-shifts—on the steps of service and an operator’s non-negotiable standards ensures the guest experience transaction is delivered as expected.

Worryingly, Mastroianni expressed her concern that the quality of service appears to be dropping. If that’s true, however, that provides an opportunity.

Per Sutley, the industry is getting more difficult. There are more competitors out there, and guest expectations are becoming increasingly stringent. So, if Mastroianni is correct and more concepts are failing to deliver on the expected service transaction, operators who commit to building and training teams that deliver high-level service will stand out.

What is Hospitality?

If service is black and white, guess what hospitality is?

“Hospitality is color,” said Wills. “And we go above and beyond to relate to guests.”

Going further, Wills said that how an operator and their team chooses to “paint the picture” defines the level of hospitality they deliver.

For Mastroianni, if service is transactional, hospitality is emotional. Hospitality is how a restaurant, bar, nightclub or hotel team makes a guest feel. Drilling deeper, hospitality is how we in this industry connect with guests on a deeper level than simply transactional service.

To throw in my two cents, I like to think that even brand-new operators understand the transactional part of hospitality. It’s the people part, the guest experience element, that catches many operators and their teams out. Service without hospitality is mediocrity in motion.

Regardless of where one stands on the topic of service vs. hospitality, it’s crucial that operators become acutely aware of the experiencing they’re giving their guests. What do they see when they look at the picture they and their team paint each shift?

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3 Ways to Build Revenue on Mother’s Day

3 Ways Restaurants Can Build Revenue This Mother’s Day

by Austen Asadorian

Tattoo-style rose with "Mom" ribbon

With Mother’s Day quickly approaching, there’s no doubt that operators across the country are preparing for the celebratory—yet extremely busy—day.

During their preparations, it’s important that operators find and incorporate new tools and innovative marketing tactics. Doing so will not only fill seats, it will ensure they capitalize on a key opportunity to drive incredible revenue.

Below are three simple but powerful ways operators can generate revenue and loyalty on—and beyond—this Mother’s Day.

Encourage Reservations & Offer Upgrades

An easy way to make this busy day seamless for guests—and, ultimately, staff—is to encourage and allow guests to make a reservation before they arrive. Reservations give operators insight into who will be dining with them, help optimize seatings and covers, and provide a idea of how much to order to eliminate food waste if a special menu is being offered.

Using a reservation system also provides operators with the opportunity to offer diners upgrades during the booking process, even including prepayment should they want to go that route. This not only allows operators to earn additional revenue before a guest even visits, but also a convenient way to offer guests peace of mind knowing they’ve handled that “something special” for Mom way before the big day.

These upgrades don’t have to be anything crazy or extreme (although that’s always an option). In fact, according to the National Restaurant Association, consumers want special touches and discounts over everything else. So, an upgrade can be something as simple as a beautiful flower arrangement waiting on the table to a special off-menu dessert brought out at the end of the meal.

Use Email & Social Media to Your Advantage

Properly promoting Mother’s Day offerings to guests is extremely important because if no one knows about it, who will come?

Operators should utilize tools like email marketing to send personalized communications to their guest database promoting the venue’s Mother’s Day reservation availability or special offerings. Better yet, these tools can be used to offer loyal guests reservations before they open to the general public, further creating a special experience for those faithful diners.

In the same vein, operators should harness the power of social media, too. Operators can target paid marketing efforts on social channels like Facebook and Instagram to drive even more awareness and revenue for their restaurant by creating an event, including the details of the activities, specials, or Mother’s Day promotions, and exporting the names of top guests and email data.

Surprise Them with a Second Visit

While Mother’s Day is the focus right now, it doesn’t stop there for operators. To drive the revenue they need, it’s important to turn these celebratory diners into repeat guests.

To do so, operators should consider offering Mother’s Day diners complimentary gift cards or discounts (even via email post-visit) to bring them back. This could be for an upcoming graduation, Father’s Day (so Dad can also get the love), or even for a future birthday.

This “surprise and delight” factor is one of the easiest strategies to capitalize on holiday traffic and get diners to return to a restaurant once again as a loyal guests.

Here’s to You, Mom

Moms should be celebrated every day, but especially on Mother’s Day, and it’s important to make sure they have the best experience when dining out.

By incorporating simple tactics like offering reservations and custom upgrades or even a special surprise at the end of the meal, operators not only succeed in making the day memorable, but create a guest who will return over and over again.

About Austen Asadorian

Austen Asadorian is the Vice President of Sales at SevenRooms, where he is tasked with supporting SevenRooms’ global expansion efforts and accelerating the company’s goal of being the best-in-class solution for hospitality operators globally. Prior to joining SevenRooms, Austen was Peloton’s Director of Sales, leading the company’s go-to-market strategy for retail growth and expansion. He started his career at Hillstone Restaurant Group where he cut his teeth learning how to run efficient and profitable restaurants at scale. Austen was ultimately promoted into an executive role where he oversaw the company’s Manager in Training Program and Back of House Operations. Austen graduated from the Culinary Institute of America (CIA).

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KRG Hospitality marketing plan. Restaurant. Bar. Cafe. Lounge. Hotel. Resort.

by David Klemt David Klemt No Comments

Sticking to Your Standards

The Importance of Sticking to Your Standards

by David Klemt

Person writing down notes

One crucial task for all restaurant, bar, nightclub, and hotel operators is to set the acceptable standards and commit to maintaining them.

Hospitality operations are subject to an interesting paradox. We’re all told to prepare for things to go sideways during any given shift. We’re also told that adhering to our standards of service will help us weather a storm of challenges. Oftentimes, however, the first thing to slip at the first sign of trouble is: our standards.

When a client signs on with KRG Hospitality, they are given the task of identifying their core values. There’s an exercise for this key development step; it’s part of our standards.

Your core values inform your standards (and so much more): leadership team standards; front- and back-of-house team member standards; and standards of service. Additionally, you should spell out these standards during the onboarding process, utilizing an employee manual—which new hires must sign and date—and practical training.

It’s absolutely crucial that you and your team commit to your standards fully. They’re inviolable, what both KRG president Doug Radkey and Chef Brian Duffy call your “non-negotiables” during speaking engagements and when working with clients.

Are people going to make mistakes, including you? Yes. On occasion, a standard is going to slip. The key is understanding that maintaining standards helps reduce these occasions; panicking and allowing them to slip just drops us deeper into quicksand.

Someone on the team is going to miss a service step. Something will occur during a shift that’s not up to standards. What’s important in those moments is the ability for the team to recognize the slip quickly and correct course immediately.

Setting Standards

There are different ways for operators to select their standards. The example I provide at the top of this article is one approach KRG implements.

Michael Tipps, co-founder of Invictus Hospitality and friend of KRG Hospitality, has an intriguing approach of his own. He shared this during the 2023 Bar & Restaurant Expo in Las Vegas.

“Standards separate operators and their teams,” says Tipps. While he doesn’t encourage operators to look at every other operator in their market as competition, he does advocate for differentiation.

Tipps shared a three-step approach to standards. (Step two, by the way, is the one I find intriguing.)

  1. Create your standards. Again, there are different approaches.
  2. Pick your committee. I’m going to explain this further.
  3. Set standards against the grandest vision of your venue.

So, what does it mean to “pick your committee”? Well, it means surrounding yourself with people you respect…real or imagined. As Tipps explained during BRE, he has people in his life that he considers his committee. The real-life members of this committee are a sounding board for any number of ideas, questions, challenges, and even mistakes.

And yes, his committee also includes “imaginary” members, such as Michael Jordan and Phil Jackson. These are people that he doesn’t know personally but are known to have incredibly high standards. They’re high achievers and, of course, many have biographies and we can know their standards. Tipps has “asked” these committee members, “How should I handle X?”

This creative approach isn’t for everyone but every operator should at least give it a shot. When we step that far out of our comfort zones the results can be incredible.

The Cheat Code

On the specific topic of service standards, Tipps has a cheat code for operators: hotels. “The hotel mindset is a hospitality cheat code,” says Tipps.

How so? It’s quite enlightening.

Think about your restaurant. Now, think about it as the first-floor cornerstone of an upscale hotel. Imagine that there are 250 incredible boutique hotel rooms above your restaurant. These rooms command rates of several hundred dollars per night. Now think about how you would treat each guest in these expensive rooms if they ask for a straw.

“Make the effort to care like nobody else can,” says Tipps.

Always bear in mind that hospitality is how you make people feel. Your mission should be for each and every guest to feel relevant.

Generally speaking, most people don’t want to be alone. They’re not just coming to your restaurant because they’re hungry, to your bar because they’re thirsty. In reality, as Tipps would tell you, they’re coming to be around other people. They’re using your F&B as a reason to be around other people and feel relevant.

Your mission is to ensure people feel relevant when they spend time at your venue with your team. The package you send to accomplish this mission is your standards of service.

“Self-inflicted mediocrity is the result of laziness and lack of accountability,” Tipps says.

Hold everyone accountable for enforcing your standards—including yourself—and you’ll level up in every facet.

Image: Owen Michael Grech on Unsplash

KRG Hospitality Start-Up Restaurant Bar Hotel Consulting Consultant Solutions Plans Services

by David Klemt David Klemt No Comments

Empower Your Team to Make Decisions

Do You Empower Your Team to Make Decisions?

by Kim Richardson

Chess pieces on chess board in grayscale

Empowerment is about so much more than trusting someone to follow clearly defined rules; you must learn to trust your team’s judgement.

Yes, even when things don’t go according to plan. If you’re only training your team on the “rules,” you’re doing a disservice to them and yourself. So, let’s have a little chat about empowerment. What does it mean to you? What are your expectations of your team when you tell them they are empowered?

Looking back throughout your own work history, have you ever had a job where your boss told you that you were empowered to make decisions, but you didn’t actually know what to do or how to make decisions? Did anyone ever explain “the how” of decision making to you?

Now, look at yourself as a leader. Have you ever had employees that you’ve told are empowered to make decisions, yet they get a manager every time someone needs something out of the ordinary? Are you explaining to your staff “the how” of decision making, along with your expectations?

It’s frustrating to feel like the house might fall down when you’re not in it. That’s no way to operate a business. We all want our staff to be able to make educated decisions when we’re not around. We shouldn’t have to hold their hands and be part of every single decision.

Still, there are times when, left to their own devices, a team member doesn’t make the decision you’d want them to make. This makes owners and leadership team members feel as though they must be at work every second.

So, how do you move away from micromanagement and learn to trust your team’s decision making?

Leverage Teachable Moments

You’ll never be able to give an example of every possible situation that may arise. Therefore, you’ll never be able to train your team on everything that they’ll encounter on any shift.

How do you tell someone how to handle situations when you’re not around? You don’t, and I don’t suggest you even try. Instead, you need to instill a sense of empowerment in your team.

However, “empowerment” is just a word if you’re not educating your team. You need to teach staff how to make good decisions. And how do you even start to do that? Cash in on all the teachable moments that happen throughout the day!

Once upon a time we were all new to this industry. I’m sure you have a few stories of some mistakes you’ve made along the way. I know I certainly do.

Think back to those situations. Did someone explain to you why you made a mistake? More importantly, did they then help you understand what to do next time? Or did they just get mad and make you feel like a failure?

I’ve had the privilege of working with some amazing people over the years. There are several people that really put effort into teaching me. The different things they taught me helped me to understand the ins and outs of decision making, even in situations I know very little about.

Example 1: The Restaurant

For my first job ever, I was a hostess at an Italian restaurant and pizzeria. During the training process I was told to rotate sections when seating tables. That’s easy enough, right? Well…maybe not.

Sometimes I’d see exceptions to this rule. The same section would get sat twice in a row, for example. I watched exceptions to “the rule” get made with no clue as to why.

One day, I sat the same section twice in a row. I don’t remember why, but I do remember the server’s reaction.

Right after seating the second party in the server’s section she let me know how annoyed she was by my decision. Now, I knew I messed up immediately—she let me know. But I didn’t know why it wasn’t okay that I had double-sat her this time.

All I knew is there was a rule I was expected to follow…unless I wasn’t supposed to follow it. Sometimes it was okay to disregard the rule, sometimes not. The rule wasn’t clarified before I began my role as a hostess, it wasn’t explained during training, and it wasn’t explained in the moment I “broke” the rule.

At some point it was explained to me that there were several factors that influenced the “double-seating rule.” For instance, you might skip a section in the rotation if they were just sat a big party. You might double-seat someone if they were regulars, family or friends and the server was able to accommodate an additional table. Of course, there were several other factors that could come into play.

The biggest issue is that none of that was explained to me during training. Moreover, I was left to figure out the nuances of seating on my own.

Example 2: The Hotel Sales Office

I worked at a hotel in the sales office for my first job out of college handling group room blocks.

The contracts I sent out to clients had cutoff dates 30 days prior to the event. Again, sounds pretty simple, doesn’t it?

One day a bride emailed me asking if she could extend the cutoff date. The cutoff date fell on a holiday weekend and she was concerned that people might not have time to book their rooms. I wrote her back and very politely told her no. So she reached out to my boss, Jill, who told her yes.

And then I got called into Jill’s office.

I remember that conversation like it was yesterday. Jill was very nice about the situation and explained that it was okay to make exceptions for people sometimes. Sometime later, I extended a cutoff date for another group. Should be an acceptable exception, right?

Nope. I got my hand slapped on that one. There was a citywide event going on over those dates. The hotel was fully sold out and turning away business. In this circumstance, it was actually a huge problem to extend the cutoff date.

Great—here we go again with a rule that exists in a gray area, and no one explained its nuances. As it turns out, there are factors that go into extending a cutoff date, such as how many rooms the group has already picked up; how busy the hotel is over the dates of their room block; and the relationship you have with the client.

I don’t know if anyone ever flat out explained these gray areas to me. Instead, I was left to figure out the nuances through trial and error.

Example 3: The Dish Tub Incident

At that same hotel several years later I started handling banquet events. One day, a client told me their registration desk needed dish tubs lined with cloth napkins. I threw it on the banquet event order.

Well, I happened to work at a Five Diamond hotel. Dish tubs with napkins sitting out in view of the public? That’s not how we did things. Enter: Bruce the Banquet Manager.

No detail, however small, escaped Bruce. Referring to the dish tubs and napkins, Bruce asked me why they were necessary. I actually had no idea what the client wanted with the tubs and napkins. So, I reached out to the client.

Turns out all she needed was a way to store welcome packets for event attendees. These days, we just put up a QR code and call it good. Once I let Bruce know what the containers were actually for, he understood. However, we weren’t about to load unsightly dish tubs with welcome packets. Instead, we found something more aesthetically pleasing and in line with our level of service.

I spoke about the Dish Tub Incident with Jill. To her credit, she helped me understand that people who are planning meetings so frequently are sending standard specs. Sometimes there would be a request on a BEO that wouldn’t make sense for the venue. Crucially, she taught me that if I ever saw something that didn’t make sense I needed to ask questions.

Truthfully, I don’t remember if it was that conversation or another but Jill taught me one of the best lessons: Ask the client what goal they’re trying to achieve. By understanding their goals we could provide solutions that made sense for us and honored their wishes. Additionally, we’d deliver the excellent service they had come to expect.

Example 4: The Hotel Cafeteria

Let’s take a little break from talking about my mistakes and talk about somebody else’s.

Many years later, I was working at another hotel. One day, I went to the cafeteria and the fruit bowls had Asian pears in them. I love Asian pears, so I was really excited about those bowls.

Now, those particular pears were probably a day away from being spoiled. I went to the cafeteria the next week and there were the Asian pears again! This time, they were perfectly fresh, crisp pears.

Well, I certainly enjoyed that. You want to know who didn’t enjoy that? The executive chef!

As it turns out, Chef sent the pears that were about to go bad to the cafeteria because they were leftovers from something else. He didn’t want them to go to waste. But the fresh, crisp pears that were out the following week? Those were a different story.

There was a kitchen team member who saw the Asian pears go down the week before. When he was setting up the cafeteria the following week he threw some in the fruit bowl. No one had told him that Asian pears are expensive. Also, no one had told him the pears were just going down to the cafeteria because they were close to spoiling. They’re not typically the type of thing set out in the employee cafeteria.

While I would never expect Chef to stop and explain every single decision he’s making, it’s the perfect example of seeing one of your superiors doing something and thinking you’re supposed to do the same.

Leaders Teach

When I look back on some of the mistakes I made, they seem pretty obvious with many years of hindsight.

The solutions to unexpected situations are common knowledge to me now. If you also have some years in this industry, they’re likely common knowledge to you.

And that’s my point.

I was young. I was inexperienced. People didn’t always tell me the things they had learned that were common knowledge to them. So, they also didn’t share their expectations with me.

I can only assume that you have people on your team that are young and inexperienced. As seasoned hospitality professionals, we all make decisions every day that can be teaching moments. These moments are part of the learning experience. Using them to shape your team will help your business run better.

Have you implemented an onboarding process? Do you have a detailed employee manual? Do you have actual systems in place? If so, great—you’re ahead of the curve.

But do you think that you’re training new and existing employees on every situation that will ever pop up during their shifts? Really, that’s impossible. Instead, be on the lookout for teachable moments. Put people on your leadership and empower them to do the same.

In turn, they’ll help empower your staff to make the “right” decisions for your business. And importantly, they’ll feel empowered to learn from mistakes so they don’t repeat them. Over time, and it won’t take long, you and your leadership team will be able to step away and work on other parts of the business. In fact, you’ll find that you can step away from the business from time to time.

People are going to make mistakes. That includes you. Don’t let these teachable opportunities go to waste.

Image: Hassan Pasha on Unsplash

KRG Hospitality. Boutique Hotels. Resorts. Properties. Consultant. Feasibility Study. Business Plan

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