Hospitality news | KRG Hospitality

April 11, 2023by David Klemt David Klemt No Comments

Real-world Menu Tips from Chef Brian Duffy

Real-world Menu Tips from Chef Brian Duffy

by David Klemt

I wonder what Chef Duffy would say about these menus.

Call it an education session, call it a workshop, one of the best features of the Bar & Restaurant Expo is live menu feedback from Chef Brian Duffy.

This is certainly true of the 2023 Bar & Restaurant Expo. During this year’s BRE (formerly Nightclub & Bar Show, or NCB), Chef Duffy delivered well over two hours of real-world menu feedback.

To be sure, BRE educational programming is always beneficial. Attendees who take the time to plan their schedules to include education sessions will take invaluable tips back to their businesses.

However, watching in real time as Chef Duffy critiques real menus submitted by BRE attendees provides insight that will impact the guest experience and success of a restaurant or bar immediately.

When delivering his feedback, Chef Duffy is unacquainted with the menus. He’s also unfiltered. So, attendees of these sessions are provided a window to Chef Duffy’s professional opinions, on the fly, in real time.

Take, for example, this blunt statement: “If you serve tilapia in your restaurant, you suck.” Before anyone has a conniption, Chef Duffy is referring to unethically farm-raised tilapia that’s often exposed to waste.

Technical Difficulties

Due to unforeseen AV issues, Chef Duffy was unable to use the large screens in the room to review menus for 30 to 40 minutes.

Now, some speakers may be shaken when encountering such a technical difficulty. This isn’t the case for Chef Duffy. In fact, all in attendance from the start of his session were lucky enough to gain insights beyond menu design because of the AV issues.

First, we all gained some insight into Chef Duffy’s consulting process. When engaged for restaurant consultation, he watches an evening service. Next day, he’s in your kitchen at 10:00 AM. What he sees in your kitchen tells him what’s happening throughout your restaurant. By the way, if he encounters just two spelling errors on your menu, he’s done reviewing it—you need a fresh start.

Second, inventory. Chef Duffy assumes you keep eleven percent of your overall revenue on your shelves. So, if you’re generating $100,000 each month, your shelves hold $11,000 of product. When reviewing your financial situation, take a look at that number for your own restaurant or bar.

Third, executive chefs versus head chefs. Chef Duffy has been on the ground for more than 100 restaurant openings. He has interviewed countless chefs. Have you ever wondered about the difference between an executive chef and a head chef? Knowledge of the financial aspects of running a kitchen. Without it, someone’s not an executive chef—they’re a head chef. Executive chefs know (and in theory can be trusted with) finances; head chefs make sure the brigade comes to work on time.

Finally, a cost-reduction tip. When you speak with your food reps, ask about DWO items: “Discontinued When Out.” You may be able to get your hands on some great items for a fraction of the cost.

Pricing Tips

Since we’ve looked at costs, let’s take a look at pricing.

Determining pricing effectively involves more than just gathering intel about your competitors. Chef Duffy suggests looking over your entire menu and committing to a pricing hard deck.

For example, “I’ll never sell a starter for less than X dollars.” You commit to never selling a entree for lower than a certain dollar amount. If you breach that promise, you may damage your brand.

Staying on the topic of pricing, don’t take advantage of your guests. Chef Duffy absolutely believes you can charge premium prices—but only for innovation. How do you know if a menu item is innovative? If it has made its way to major chain restaurants and you’re not doing anything unique to your version, it’s not innovative.

In terms of layout and design, don’t “lead” guests to prices with dots, dashes, or solid lines. Just place the price next to the item and move on.

Menu Tips

Another crucial tip that really should go without saying but, well, here we are, is proofreading. Want to make sure your menu is correct in a fun way? Throw a proofreading party. Invite ten of your VIP guests, gather your staff, invite some friends and family if you won’t be distracted, and ask for honest feedback.

Of course, you can elevate this event by serving new menu items tapas or family style to your VIPs. Brand-new restaurant yet to open? I suggest having the proofreading party with staff, friends, and family.

Keep in mind that menu real estate is valuable. Does a section of your menu come with identical accompaniments? Explain that at the top of section rather than including them in every. single. item. separately. Yes, this happened during the live 2023 BRE reads.

Chef Duffy would like you to stop putting specials on your menu. Again, menu real estate is valuable. If you can spare the room for specials, are they really special? Instead, your servers should know the day’s specials and share them with your guests from memory. And speaking of memory, upselling really only works if your staff knows the menu backward and forward.

Oh, and Chef Duffy would love it if you’d stop doing truffle fries if you’re not going to use premium products.

Your Menu Isn’t “Just” a Menu

Obviously, I haven’t shared every one of Chef Duffy’s menu tips. However, the above should serve as more than enough to motivate you to review your own menu with a critical eye.

In fact, you should be inspired to have your leadership, BoH, and FoH teams review the menu as well.

Yes, spelling matters. Yes, grammar matters. And yes, every detail and bit of menu real estate matters. This is because, simply put, your menu is more than a list of items for sale.

As Chef Duffy says, “Your menu is your calling card, it’s just that simple.” He would also tell you that the first place people encounter your business is online after a search. So, your website is your showcase. But your menu? That’s your billboard on the freeway, as he says.

QR codes may have been the standard from 2020 to 2022. We all know why. But for the most part, with the exception of QSRs and LSRs, people want to hold your menu. It’s a tactile experience and true engagement.

Menu design, like your website’s design, matters. Don’t believe me? I have two framed menus on my office wall, and they’re not from client concepts.

To learn more about Chef Brian Duffy, visit his website here. And, of course, make sure to follow him on Instagram. To listen to his Bar Hacks podcast episodes, click here for episode 33 and here for episode 53.

Image: Catherine Heath on Unsplash

Person using Google search on their phone

April 7, 2023by David Klemt David Klemt No Comments

Meet Customers Where They Are, Part 3

Meet Customers Where They Are, Part 3

by David Klemt

If you truly want to meet your potential guests where they are, you need to be as discoverable as possible via mobile and desktop search.

The first part of this series discusses meeting guests in secondary and tertiary markets. Also, part one recommends looking into suburbs and watching moving data.

Part two looks into the importance of being top of mind for delivery, takeout, and pickup guests. Even with the current demand for socializing and in-person dining, off-premise dining guests are an important focus.

Now, I’m talking about being discoverable. Why? Because of where your guests are: their phones and desktops.

So, there are few crucial elements of your business to consider. Your website still matters. You need to ensure you own your venue listings. It’s crucial that your location information is up to date across platforms.

And now, meeting guests where they are will mean improving the odds that AI chatbots recommend your business.

Another ongoing KRG Hospitality series is our conversations with ChatGPT, Bing AI, and now Google Bard. It’s our chat with the latter that shows the importance of improving online discoverability.

Below, interactions with Bard and ChatGPT about using AI chatbots to discover restaurants, bars, and hotels.

Google Bard

Can people use Bard to discover new restaurants and bars, and book reservations?

Yes, people can use Bard to discover new restaurants and bars, and book reservations. Bard can access and process information from the real world through Google Search and keep its response consistent with search results. For example, if you ask Bard to find a restaurant with good Italian food in San Francisco, it will look for restaurants that have been rated highly by other users and that serve Italian food. Bard can also book reservations for you through OpenTable.

What criteria do you use to determine the best restaurant, bar or hotel for someone asking you to conduct a search of such businesses?

I use a variety of criteria to determine the best restaurant, bar, or hotel for someone asking me to conduct a search of such businesses. Some of the most important criteria include:

Customer reviews. I look at customer reviews to see what other people have said about the restaurant, bar, or hotel. This helps me get a sense of the quality of the food, service, and atmosphere.
Location. I also consider the location of the restaurant, bar, or hotel. I want to make sure that it is in a convenient location for the person I am recommending it to.
Price. I consider the price of the restaurant, bar, or hotel. I want to make sure that it is within the person’s budget.
Type of food. If the person is looking for a specific type of food, I will try to find a restaurant that serves that type of food.
Atmosphere. I also consider the atmosphere of the restaurant, bar, or hotel. If the person is looking for a casual or formal atmosphere, I will try to find a restaurant that fits their needs.
Other criteria. I may also consider other criteria, such as the hours of operation, the availability of parking, and the presence of accessibility features.

By taking all of these factors into account, I can help the person I am recommending it to find the best restaurant, bar, or hotel for their needs.

How can a restaurant, bar or hotel improve the odds that Bard would recommend them to someone?

There are a few things that a restaurant, bar, or hotel can do to improve the odds that I would recommend them to someone:

Provide excellent customer service. This means being friendly, helpful, and responsive to customer needs. It also means going above and beyond to make sure that customers have a positive experience.
Offer a unique or memorable experience. This could be anything from a special menu item to a unique atmosphere. Something that makes the restaurant, bar, or hotel stand out from the competition.
Be consistent. This means providing the same level of service and quality every time a customer visits. It also means being reliable and keeping promises.
Be responsive to feedback. This means listening to what customers have to say and taking their feedback into account. It also means being willing to make changes based on feedback.

By following these tips, restaurants, bars, and hotels can increase the odds that I would recommend them to someone.

If I asked you to find me the best cocktail bar in Las Vegas for early evening drinks and the best upscale restaurant for a late dinner in Las Vegas, what would you recommend?

Sure, I can help you with that. Here are my recommendations for the best cocktail bar and upscale restaurant in Las Vegas for early evening drinks and late dinner, respectively:

Cocktail bar: The Vesper Bar at The Cosmopolitan of Las Vegas. This award-winning bar offers a wide variety of cocktails, as well as a beautiful atmosphere. It is perfect for a romantic evening or a night out with friends.
Upscale restaurant: The Dorsey at The Venetian Las Vegas. This Michelin-starred restaurant offers a tasting menu of modern American cuisine. The atmosphere is elegant and the service is top-notch. It is perfect for a special occasion or a romantic dinner.

I hope this helps!

ChatGPT

Can people use ChatGPT to discover new restaurants and bars, and book reservations?

As an AI language model, I can provide recommendations and information about restaurants and bars, but I cannot directly book reservations for you. However, I can suggest several online platforms that allow you to book reservations at restaurants and bars, such as OpenTable, Resy, and Yelp Reservations. These platforms allow you to search for restaurants and bars based on various criteria such as location, cuisine, price range, and availability, and make reservations online.

If you’re looking for restaurant recommendations, I can provide suggestions based on your preferences such as cuisine, location, price range, and other factors. Additionally, I can provide you with information such as hours of operation, contact information, and customer reviews. Please let me know if there’s anything specific you’re looking for and I’ll do my best to assist you!

How do you help ChatGPT users find the best restaurants, bars, and hotels?

As an AI language model, I can help ChatGPT users find the best restaurants, bars, and hotels by using natural language processing and machine learning algorithms to understand the user’s preferences and provide personalized recommendations.

To find the best restaurants and bars, I can consider various factors such as cuisine, location, price range, ambiance, and customer reviews. I can also take into account any dietary restrictions or preferences the user may have, such as vegan or gluten-free options.

To find the best hotels, I can consider factors such as location, price range, amenities, and customer reviews. I can also help users find hotels based on their preferred style of accommodation, such as luxury, boutique, or budget.

In addition to recommendations, I can also provide users with useful information such as hours of operation, contact information, and directions. I can also assist with booking reservations or finding deals and discounts if available.

How can a restaurant, bar or hotel improve the odds that ChatGPT would recommend them to someone?

There are several ways a restaurant, bar, or hotel can improve the odds of being recommended by ChatGPT to someone:

Positive Customer Reviews: Positive customer reviews are one of the most critical factors in ChatGPT’s recommendation algorithm. Encourage your customers to leave positive reviews on platforms such as Google, Yelp, or Tripadvisor, as these can greatly improve your chances of being recommended.
High-Quality Photos: High-quality photos of your establishment, food, and drinks can make a big difference in attracting potential customers. Ensure that your website and social media pages have high-quality images that showcase the ambiance, menu, and overall experience of your establishment.
Accurate and Up-to-Date Information: Ensure that your establishment’s information is accurate and up-to-date on various platforms. This includes your address, phone number, hours of operation, and menu.
Responding to Customer Queries: Respond promptly to customer queries or complaints on various platforms, including social media. This shows that you value customer feedback and are willing to make improvements to provide an excellent experience.

Offering Unique Experiences: Offering unique experiences or features, such as signature cocktails or locally sourced ingredients, can help your establishment stand out and increase the likelihood of being recommended by ChatGPT.

If I asked you to find me the best cocktail bar in Las Vegas for early evening drinks and the best upscale restaurant for a late dinner in Las Vegas, what would you recommend?

For the best cocktail bar in Las Vegas for early evening drinks, I would recommend The Chandelier at The Cosmopolitan of Las Vegas. It is a three-story bar with a stunning chandelier centerpiece, offering a wide range of signature cocktails and a luxurious ambiance. It’s perfect for early evening drinks with friends or colleagues.

For the best upscale restaurant for a late dinner in Las Vegas, I would recommend Joel Robuchon at MGM Grand. It is a Michelin-starred restaurant with an elegant dining room and exceptional French cuisine. They offer a variety of tasting menus, including a vegetarian option, and a vast wine selection. The service is impeccable, and the atmosphere is perfect for a romantic dinner or a special occasion.

Takeaways

First, the bar and restaurant recommendations. As a Las Vegas local for creeping up on two decades, they’re solid. I think a first-timer would find them helpful and be happy with those selections.

More importantly, however, is what each bot reveals about discoverability. Operators need to make sure they’re responding to reviews quickly and properly; that they’re listings are under their control and the information is accurate; and that they’re courting reviews in the 4.0- to 4.7- star range. (More on that rating range in the near future.)

Then there are the other important considerations, such as pricing, cuisine, and atmosphere. When taking control of listings, operators must categorize their venues accurately.

Technology innovations often present a paradox. Ostensibly, technology makes lives easier. However, many operators likely find that much of tech makes things more difficult.

Leveraging tech often requires more work on the operator side—innovations often make things simpler for our guests. Of course, tech can make things easier for operators, it just takes a lot of work initially.

As people rush to develop AI—some say too quickly—it’s going to be top of mind for people searching for restaurants, bars, nightclubs, eatertainment venues, hotels, etc. Operators are going to have to meet their guests where they are: search engines and chatbots.

Image: Solen Feyissa on Unsplash

Person using Google Bard AI on their phone

April 4, 2023by David Klemt David Klemt No Comments

Yes, We Finally Spoke with Google Bard

Yes, We Finally Spoke with Google Bard

by David Klemt

Come on, now—you must know that after speaking with ChatGPT and Bing AI and sharing those chats our conversation with Google Bard is next.

Perhaps because its launch is more recent, Bard is slower to answer than ChatGPT. I can’t know for certain but it’s reasonable to assume eager users are overwhelming Bard.

As far as the user experience, I like that Google includes a disclaimer about interacting with Bard. Unsurprisingly, Google warns that Bard can provide inaccurate, misleading, or false information. Interestingly, the company also recommends people “Google it” if they’re unsure about the answers Bard offers.

Below you’ll find the same questions I asked of ChatGPT in January and Bing AI in March. Not surprisingly, Bard “believes” robots and AI are more beneficial than detrimental for our industry.

Please write 400 to 500 words about robots and artificial intelligence working in restaurants, from the perspective of robots and AI.

As a robot working in a restaurant, I have a unique perspective on the challenges and opportunities that automation presents. On the one hand, it can be difficult to compete with humans who are more flexible and creative. On the other hand, automation can help restaurants to reduce costs and improve efficiency.

One of the biggest challenges for robots in restaurants is the need to be able to adapt to changing circumstances. For example, if a customer makes a special request, a robot needs to be able to adjust its plans accordingly. This can be difficult, as robots are often programmed to follow a set of instructions.

Another challenge is the need to be able to interact with customers in a natural and engaging way. Customers expect robots to be polite and helpful, and they should be able to answer questions and provide assistance. This can be difficult, as robots are often not as good at understanding human language as humans are.

Despite these challenges, there are also many opportunities for robots in restaurants. Automation can help restaurants to reduce costs by eliminating the need for human employees. This can be especially beneficial in areas with high labor costs. Automation can also help restaurants to improve efficiency by reducing the time it takes to prepare and serve food. This can lead to shorter wait times for customers and higher profits for restaurants.

In addition, automation can help restaurants to provide a more consistent and reliable experience for customers. Robots are not subject to the same fatigue and errors as humans, and they can work 24 hours a day without a break. This can lead to better food quality and faster service.

Overall, I believe that the opportunities for robots in restaurants outweigh the challenges. Automation can help restaurants to reduce costs, improve efficiency, and provide a better experience for customers. As the technology continues to develop, I believe that robots will play an increasingly important role in the restaurant industry.

From the perspective of artificial intelligence, the use of robots in restaurants is a fascinating development. AI has the potential to revolutionize the restaurant industry, and it is already being used to automate tasks such as food preparation, order taking, and delivery.

AI can also be used to personalize the restaurant experience for customers. For example, AI can be used to recommend dishes that customers are likely to enjoy based on their past orders. AI can also be used to create virtual assistants that can answer customer questions and provide support.

The use of AI in restaurants is still in its early stages, but it has the potential to revolutionize the industry. AI can help restaurants to improve efficiency, reduce costs, and provide a better experience for customers.

Can you explain to me, in 300 to 400 words, what the ethical implications are for restaurant, bar, and hotel operators using artificial intelligence and robots to complete tasks?

Sure. Here are some of the ethical implications for restaurant, bar, and hotel operators using artificial intelligence and robots to complete tasks:

Job displacement: The use of artificial intelligence and robots could lead to job displacement, as some tasks that are currently done by humans could be done by machines. This could lead to increased unemployment and reduced income for workers.
Bias: Artificial intelligence and robots could be biased, as they are often trained on data that is collected from human sources. This could lead to unfair treatment of customers, employees, and other stakeholders.
Privacy and security: The use of artificial intelligence and robots could raise concerns about privacy and security, as these systems could collect and store data about customers and employees. This data could be used to track customers’ movements or to monitor employees’ activities.
Safety: The use of artificial intelligence and robots could raise concerns about safety, as these systems could malfunction or make mistakes. This could lead to injuries or even death.
Customer experience: The use of artificial intelligence and robots could have a negative impact on the customer experience, as some customers may find it unsettling or uncomfortable to interact with machines. Additionally, customers may feel that the use of robots and artificial intelligence detracts from the human element of the service experience.

It is important for restaurant, bar, and hotel operators to consider these ethical implications before implementing artificial intelligence and robots in their businesses. By carefully considering these issues, operators can help to ensure that the use of these technologies is done in a responsible and ethical manner.

Are there risks that human designers and engineers will introduce bias to customer-facing artificial intelligence and robots?

Yes, there are risks that human designers and engineers will introduce bias to customer-facing artificial intelligence and robots. This is because humans are inherently biased, and this bias can be reflected in the way that we design and engineer systems.

One way that bias can be introduced is through the data that is used to train artificial intelligence systems. If the data is not representative of the population that the system will be interacting with, then the system may be biased. For example, if an artificial intelligence system is trained on data from primarily white and wealthy customers, it may have difficulty understanding and serving customers from other backgrounds.

Another way that bias can be introduced is through the algorithms that are used to control artificial intelligence systems. If the algorithms are not designed to be fair, then the system may be biased. For example, if an algorithm is designed to favor customers who spend more money, then customers who spend less money may be treated unfairly.

It is important for human designers and engineers to be aware of the risks of bias and to take steps to mitigate these risks. This can be done by using a variety of methods, such as using diverse data sets, designing fair algorithms, and testing systems for bias. By taking these steps, we can help to ensure that artificial intelligence and robots are used in a fair and ethical manner.

Image: Mojahid Mottakin on Pexels

April 4, 2023by David Klemt David Klemt No Comments

5 Books to Read this Month: April 2023

5 Books to Read this Month: April 2023

by David Klemt

Our engaging and informative April book selections will help you take your bar, restaurant or hotel to higher levels, and develop your leadership skills.

To review the book recommendations from March 2023, click here.

Let’s jump in!

Unreasonable Hospitality: The Remarkable Power of Giving People More Than They Expect

When Will Guidara took over the famous Eleven Madison Park, the restaurant had just two stars and he was only in his mid-twenties. Before his 40th birthday, the changes and strategies he implemented helped the restaurant earn the title of the Best Restaurant in the World.

One of cornerstone’s of Guidara’s was “bespoke hospitality.” He and his team truly went above and beyond. Examples of the Eleven Madison Park team’s approach to hospitality illustrate just how over the top they went to deliver memorable guest experiences. If you’re looking for inspiration to step up your hospitality, pick up or download Unreasonable Hospitality today.

Blue Ocean Strategy, Expanded Edition: How to Create Uncontested Market Space and Make the Competition Irrelevant

I’m going to address the viability of the blue ocean strategy before getting into the book. Creating a hospitality concept without competition isn’t really feasible. Go too far into “blue waters” and there won’t be any “fish” (traffic). And where, exactly, would one put their restaurant, bar, or hotel where there’s no competition but still enough traffic to generate a profit?

Those issues addressed, this book is still valuable to owners and operators. One need not eliminate competition completely to take lessons from the blue ocean strategy. Businesses must still differentiate themselves from competitors, and they must look for unique opportunities to help them stand out. Blue Ocean Strategy may not work perfectly but much is still very helpful.

Contagious Culture: Show Up, Set the Tone, and Intentionally Create an Organization that Thrives

Anese Cavanaugh’s Contagious Culture addresses a topic that we often discuss with clients, in our articles, and during speaking engagements: workplace culture. From large corporations and regional or national restaurant chains, to independent restaurants, bars, and hotels, culture will make or break an organization. Cavanaugh’s techniques will improve your workplace culture and energize your team, an undeniable key to success.

From Amazon: “This is Contagious Culture, a game-changing guide to transforming corporate culture from within, developed by the award-winning creator of The IEP Method to strengthen your ‘Intentional Energetic Presence.’ This is more than a leadership book―this is your future calling.”

Bar Hacks: Developing The Fundamentals for an Epic Bar

Doug Radkey is the founder, president, and lead strategist of KRG Hospitality. He’s also a hospitality industry speaker, educator, and author. This is his first book, Bar Hacks, which is also the name of the podcast we produce through KRG Hospitality.

Now, while the title states this book is a guide for developing and running an epic bar, the strategies carry over to restaurants, hotels, and other hospitality concepts. It’s difficult—if not impossible—to elevate one’s skills and service without first mastering the fundamentals. Whether you’re new to the industry or are a veteran who feels the need to reset and revisit the fundamentals, Bar Hacks is your guide.

Hacking the New Normal: Hitting the Reset Button on the Hospitality Industry

There’s a first book, which means there must be at least one other one, right? Right! Hacking the New Normal is Doug’s second book.

This book is a direct response to the pandemic, what it did to the industry, and the issues many operators would prefer to ignore. However, the devastation is so great that ignoring the changes that should have been made decades ago isn’t a viable option. With a spotlight on hybrid business models, real estate, profit margins, technology, guest experiences, culture, diversity, and mindset, Hacking the New Normal will position you for success in our new hospitality landscape.

Image: Mikołaj on Unsplash

March 29, 2023by David Klemt David Klemt No Comments

What’s Up with the Restaurant Tax Credit?

What’s up with the Restaurant Revitalization Tax Credit?

by David Klemt

If you’re wondering what’s going on with the Restaurant Revitalization Tax Credit bills in the House and Senate, you’re probably not alone.

And if you find yourself wondering about them, that’s likely because there isn’t much news about the bills. Unfortunately, it appears that no meaningful progress has been made on HR 9574 or S.5219.

A quick check shows that both bills share the same status: Introduced. As for the House bill, HR 9574, that was introduced on December 15, 2022 by Representative Earl Blumenauer (D-OR). The Senate bill, S.5219, was introduced by Senator Benjamin Cardin (D-MD) on December 8, 2022.

It’s important to note that Sens. Cardin, Patty Murray (D-A), and Sherrod Brown (D-OH) reintroduced S.5219 in January of this year. However, that apparently didn’t mean much as the Congress.gov trackers show no progress.

Last year, some opined that neither bill would receive a vote until January 2023 at the earliest. That “prediction” has proven true, of course—it’s now the end of March.

Restaurant Revitalization Tax Credit Act Summary

Let’s take a quick look at HR 9574 and S.5219.

Both bills propose a $25,000 payroll offset for restaurants. Eligibility requirements are also identical: applicants must have applied for but not awarded a Restaurant Revitalization Fund grant.

Additional, eligible applicants are:

restaurants with operating losses of at least 30 percent in 2020 and 2021 in comparison to 2019; or
restaurants with losses of at least 50 percent in either 2020 or 2021 in comparison to 2019.

So, those are elements that both the Senate and House bills share. What about the differences between the two bills?

Mainly, differences come down to the number of employees. For S.5219, restaurants with ten employees or fewer could be eligible for the maximum payroll tax credit. That credit, as a reminder, is up to $25,000 for 2023. For every employee over ten, the refund cap drops by $2,500.

Now, HR 9574. Restaurants with ten or fewer employees would receive the full $25,000 payroll tax offset. For restaurants with between 11 and 20 employees, the offset would be “partially refundable.”

Now What?

If you believe that you’re eligible for this tax credit, it’s time to let your representatives know you want them to act.

To make things simple for everyone, I’m including the links you need to find and contact senators and representatives.

For senators, click here. And for representatives, click here.

Let them know that it’s time for action on S.5219 and HR 9574. And let them know exactly what action you expect them to take.

Image: Karolina Grabowska on Pexels

March 28, 2023by David Klemt David Klemt No Comments

WSWA Presents Cannabis Regulation Plan

WSWA Presents Cannabis Regulation Plan to Congress

by David Klemt

The Wine & Spirits Wholesalers of America are making their support for federal adult-use cannabis legalization and regulation known.

In summary, the WSWA is urging Congress to treat cannabis in a similar manner to alcohol. Impressively, the organization is doing more than just imploring members of Congress to legalize and regulate adult-use cannabis.

Rather, the WSWA is showing their commitment by doing much heavy lifting. Click here and you’ll find the WSWA Principles for Comprehensive Federal Legalization and Oversight of the Adult–use Cannabis Supply Chain. This is a comprehensive document that serves as a framework for the federal government to take action.

“The time has come for Congress to legalize and regulate adult-use cannabis at the federal level,” says Francis Creighton, CEO and president of the WSWA. “The success of our alcohol regulatory system offers a proven model for cannabis regulation, one that will promote public health and safety as well as a fair and competitive marketplace.”

Why Does the WSWA Care About Cannabis?

It’s clear when reading the WSWA letter to Congress and the organization’s framework document that they anticipate this question.

In a letter to House Speaker Kevin McCarthy, Majority Leader Charles Schumer, Minority Leader Hakeem Jeffries, and Minority Leader Mitch McConnell, the WSWA lays out precisely why they’re addressing federal legalization and regulation:

“I am writing to you today to announce that we at the Wine & Spirits Wholesalers of America (WSWA) believe the time has come for Congress to legalize and regulate adult–use cannabis at the federal level.

“We have reached this position because the current conflict between state and federal law is not only causing adverse consequences for consumers and non–consumers of cannabis but will also have long–term public health and safety costs that are too great to ignore. Twenty–one states and the District of Columbia — representing roughly half the U.S. population — have already legalized adult–use cannabis, yet the markets in these states remain illegal under federal legislation. This conflict undermines the rule of law and weakens public health and safety, while leaving states unsupported in their efforts to create safe, regulated markets and eliminate dangerous black–market activity.”

What Does the WSWA Want?

Essentially, the WSWA wants the US government to apply the same principles of federal beverage alcohol regulation to adult-use cannabis:

Award permits to cannabis producers, testing facilities, importers, and distributors;
approve and regulate cannabis products;
collect federal excise tax efficiently and effectively; and
implement effective public safety measures.

To that last point, the WSWA calls for the development of “a reliable standard for all types of impaired driving, similar to blood alcohol concentration.” In other words, a BAC equivalency for cannabis.

Of course, I don’t think I’m coming to any groundbreaking conclusion in assuming the organization foresees financial benefits. Alcohol importers and distributors, for example, know how to maneuver through the red tape of federal regulation already. And they’re well positioned to apply for permits, should they be allowed to handle both alcohol and cannabis.

This is an interesting development, one that many will support. The WSWA makes a compelling point. Additionally, providing framework is a wise strategic move.

However, we’re in highly partisan, politically charged times. There’s no reason yet to assume Congress will take up federal legalization and regulation any time soon.

Image: Justin Aikin on Unsplash

March 27, 2023by David Klemt David Klemt No Comments

Why Pickleball Should Have Your Attention

Why Pickleball Should Have Your Attention

by David Klemt

The explosive popularity of pickleball and its legions of rabid players should have the attention of restaurant, bar, and hotel operators.

In fact, the sport may just result in the next Topgolf-esque eatertainment concept.

According to an October 2022 Fortune article, pickleball is the fastest-growing sport in America for three years running. That article follows previous coverage from an array of publications that come to the same conclusion.

In Canada, the popular sport is also growing fast. It’s up against soccer, lacrosse, and cricket, but the numbers are impressive. In 2020, estimates showed 350,000 Canadian households playing pickleball. As of last year, that number was growing past 900,000.

Another sign that the sport is gaining incredible traction throughout North America? Doctors are encountering growing numbers of pickleball injuries. The Journal of Emergency Medicine says that about 19,000 people suffer pickleball injuries per year.

That may not seem like a lot when considering how many Americans play. According to the Association of Pickleball Professionals, there are 36.5 million Americans playing, from beginners to professionals.

Speaking of professional pickleball, there are professional leagues and teams. And those teams have the attention—and backing—of big-name sports celebrities. Major League Pickleball (MLP) boasts investments by Lebron James, Draymond Green, and Kevin Love. Tom Brady and Kim Clijsters are investing in an MLP expansion team.

Attention-grabbing Statistics

There’s a website—Pickleheads—that helps people locate pickleball courts. When I visit the site it shows me three casino resorts with courts immediately.

And the site just happens to have a page of useful statistics. I choose to accept that these stats are accurate.

Those who want to take a look themselves can do so by following this link. However, I’m going to share a few below:

Pickleball growth: 158.6 percent over the last three years
Top age bracket: 18 to 34 years old
Compound annual growth rate through 2028: 7.7 percent

Also per Pickleheads, the only popular sports with higher participation rates than pickleball are running and hiking.

The Next Topgolf?

The stats above should get operators’ creative juices flowing. The current growth of the sport along with the largest age group, growth projections, and support in the form of leagues, teams, and celebrities, is highly appealing.

Will a pickleball-forward eatertainment concept be the next Topgolf? It’s possible, and that’s why people considering their first or next concept need to look into pickleball.

The sport is perfect for our industry. It’s easy to learn, simple to play, and popular with most operators’ ideal age bracket—ages 21 to 34. However, pickleball is also very popular amongst the 50 to 70 set, a group with disposable income and time to indulge their interests.

Then there’s the undeniable fact that the sport is often described as fun and social. There are even articles lauding pickleball for encouraging networking.

Finally, there are organizations with which pickleball-centric eatertainment concepts can partner. An illuminating example comes from Shake Shack.

Toss and Spin, a racket sports organization, is partnering with Shake Shack this year. Their 2023 campaign is called the Shake Shack Pickleball Club. This nationwide activation centers around a nationwide tour across America featuring one-day pickleball clinics for all skill levels and tournaments.

One can only assume that this tour, backed by such a visible restaurant brand, will introduce even more people to pickleball. In turn, that creates an even larger pool of potential customers for the right concept.

Opportunity

We speak with a hospitality group pursuing an F&B-driven pickleball concept on the Bar Hacks podcast.

Brian Harper, a partner in Competitive Social Ventures and the company’s senior vice president of sales and marketing speaks about Pickle and Social on episode 94. Not only do his partners on the leadership team see potential for the sport, they love to play it themselves.

Should you think you have a solid idea for a successful pickleball concept, let us know.

Our industry standard feasibility studies will help you select the right market and site. Our fully customized concept development plans will help you and others visualize your big idea. And our in-depth business plan will provide a realistic roadmap for you to throw open your doors and march toward success.

Someone out there has the next big eatertainment concept inside their head. Is it you?

Image: Brendan Sapp on Unsplash

March 24, 2023by David Klemt David Klemt No Comments

Addressing Employee Theft

Addressing Employee Theft

by David Klemt

Recent posts about employee theft in the hospitality industry throughout Canada and the US have the KRG Hospitality team talking.

Indeed, the statistics are startling. For instance, there’s the claim that a staggering 75 percent of employees admit to stealing from their employers “at least once.”

A few years back, the Retail Council of Canada reported that while “customers” stole $175 on average, employees stole $2,500 before being caught.

Then there’s the incredible economic impact. Multiple sources claim employee theft in the US costs businesses $50 billion annually. In Canada, theft costs businesses more than $1 billion per year. Both numbers are shocking.

Looking at US restaurants specifically, the number ranges from $3 billion to $6 billion in losses due to employee theft. According to Business.com, employee theft affects four percent of a restaurant’s sales and accounts for 75 percent of shortages in inventory.

At this point, you’re probably Googling security cameras. But hold on for a moment.

Disclaimer

Before proceeding, know this: I’m going to make a few points that will seem like victim blaming. In part, this perception will be the result of my addressing recruiting, hiring, onboarding, training, the leadership team, and workplace culture.

Let me be clear: I’m not excusing employee theft. I don’t think there’s any justification for it.

Despite what a (hopefully) small number of loud voices claim on various social media platforms and forums, I don’t think it’s acceptable to steal from a corporation or business owner. No, theft isn’t a justifiable response to feeling slighted by ownership or leadership. And no, it’s not “okay” because a company generates “so much” revenue, has insurance, and can “write it off.”

With that out of the way, let’s proceed.

People are Going to Steal

Here’s one immutable fact: You’re going to hire someone who’s going to steal from your business.

Is your business up and running and serving guests? You employ someone right now who has either stolen from you already or is going to steal.

So, you can run your business under a cloud of suspicion and distrust. Or, you can improve your odds of reducing theft and ferreting out thieves before they do too much damage.

Again, you can install security cameras and place them above each POS terminal and every cash drawer. You can ensure you have clear, cutting-edge CCTV coverage of the entire bar and dining areas. Walk-ins and storage areas can have clear, high-resolution camera coverage.

Honestly, you should have that type of coverage. That type of security can improve employee and guest safety, and your insurance carrier will likely be happy about it.

But you don’t need to impose an atmosphere of suspicion, fear, and intimidation along with the cameras. If you were an employee, would you want to work somewhere that makes it clear you’re always under suspicion? Would you want to work alongside a leadership team whose default setting is that all employees are thieves unworthy of trust?

Workplace Culture

You’re never going to have a theft-free business, period. That’s another reason to not “lead” with fear, anger, and suspicion.

Truly, all that style of leadership will do is drive good, honest employees out. So, the approach should be attracting honest workers. You build a strong, trustworthy team through respect and empowerment.

Yes, there will be employees who take advantage of that respect. They were going to behave that way and steal or otherwise disrespect you, your business, and the team regardless.

Putting in the work to reflect on your leadership style and that of your leadership team pays dividends. It aids in recruitment and fosters an atmosphere of respect and honesty.

Become known for a healthy, positive workplace and you’ll attract the best workers. Nurture that culture and the team will police itself; they won’t tolerate anyone harming the business.

Am I suggesting you view your business through rose-colored lenses? Absolutely not. Install security cameras. Maintain the right insurance coverage. Conduct regular inventory checks. Review comps and voids for irregularities. Limit access to cash. Outline what constitutes theft—including time theft—and make consequences clear.

And here’s a crucial item: Prove you respect and care about your workers. Not say it, prove it.

You don’t need to know their life stories and everything going on in their lives. But you can let it be known that if they’re struggling with something, you and your leadership team are there to listen and help how they’re able.

Nothing you do will eradicate employee theft completely. You can, however, reduce it and learn to quickly stamp it out. And you can do that while maintaining a happy, healthy workplace.

Image: Tobias Tullius on Unsplash

March 21, 2023by David Klemt David Klemt No Comments

IRS Proposes New Tip Reporting Program

IRS Proposes New Tip Reporting Program

by David Klemt

The Internal Revenue Service is proposing a voluntary tip reporting program which they’re calling the Service Industry Tip Compliance Agreement (SITCA).

Making the announcement via Notice 2023-13 back in February, the IRS is giving people the chance to comment on the SITCA proposal.

Per the IRS, their intention is to “take advantage of advancements” in POS, scheduling, and e-payment technology. How do they intend to leverage all this tech? In short, the IRS is proposing that POS systems will have to process payments and tips in the same way.

To clarify further, if someone pays by credit card, they’ll have to tip via credit card. If a guest pays in cash, they’ll have to tip in cash. So, should SITCA become the industry standard, the days of paying with a credit card but leaving a cash tip will be over.

However, in my eyes, this isn’t a simple “modernization” of IRS processes.

If the IRS is proposing a new for businesses to process tips, they’re looking to catch non-compliant businesses and tipped workers. A likely culprit or contributing factor to this IRS scrutiny? The retail venues now asking for or suggesting tips when customers check out.

So, it would be wise to reiterate to your team the need to report tips accurately. And remember, business owners need to ensure they’re complying with tip reporting as well. Getting flagged for inaccurate reporting is a great way to catch an audit, penalties, and a huge bill.

Nuts and Bolts

According to the IRS, SITCA will reduce taxpayer burdens. And, of course, the service claims the program will also reduce their own administrative costs.

Additional “features,” per the IRS website, are as follows:

The monitoring of employer compliance based on actual annual tip revenue and charge tip data from their point-of-sale system. There will be allowance for adjustments in tipping practices from year to year.
Participating employers demonstrate compliance with the program requirements by submitting an annual report after the close of the calendar year. This reduces the need for compliance reviews by the IRS.
Employers participating in SITCA will receive protection from liability under the rules that define tips as part of an employee’s pay for calendar years in which they remain compliant with program requirements.
Participating employers have flexibility to implement employee tip reporting policies best suited for their employees and business model. Policies must be in accordance with the section of the tax law that requires employees to report tips to their employers.

Requests for Comment

Interestingly, Notice 2023-13 contains a request for comments in four specific areas:

By what means a technology-based time and attendance system may be used by tipped employees to report tips. This includes tips in cash and other forms of tipping made through electronic payments methods (other than a credit card), regardless of whether the tips are received directly from customers or through tip sharing arrangements.
How tip sharing practices vary across service industries and how the SITCA program can support employer participation while accommodating potential differences in Federal, state, and local labor and employment law requirements.
By what methods employers of large food or beverage establishments participating in the SITCA program may meet their filing and reporting obligations under section 6053(c) and also satisfy the SITCA program requirements for compliance, while minimizing the administrative burdens on taxpayers and the IRS.

Those interested in providing such feedback have until May 7, 2023 to do so. The IRS has set up two ways to provide comments on Notice 2023-13:

Mail: CC:PA:LPD:PR (Notice 2023-13), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044; or
Electronic: Visit the Federal eRulemaking Portal at www.regulations.gov (indicate IRS and Notice 2023-13) and follow the instructions for comment submission.

Personally, I have more questions than comments. Bear in mind, the IRS will stop accepting comments, feedback, and questions on May 7, 2023.

Image: Jon Tyson on Unsplash

March 20, 2023by David Klemt David Klemt No Comments

The Kraken Unleashes a new Monster

The Kraken Unleashes a new Monster

by David Klemt

The Kraken, which claims to be the top-selling black spiced rum in the world, has released another monster: the Kraken Gold Spiced Rum.

This new release is a direct shot across the bow of the Captains, Sailors, and Admirals that have long commanded the spiced rum category. In other words, you know exactly which brands the Kraken is challenging with this expression.

Of course, this also gives you and your bar team a new spiced rum to introduce to guests. As it turns out, spiced rum is the most popular of the rum categories.

In June of 2020, Drizly launched BevAlc Insights by Drizly. The data-focused platform can provide operators with insights into consumer behavior and preferences. After all, if they’re ordering specific products for delivery to drink at home, they’ll expect the restaurants and bars they visit to have them on their menus.

Per BevAlc Insights, spiced rum boasted a 27-percent share in comparison to other styles in 2021. Interestingly, dark rum, according to BevAlc, held only a five-percent share. Those interested in this data can learn more reviewing BevAlc Insights’ 2021 Rum Forecast.

As far as what to expect on the nose and palate, tasting notes make mention of aromas of banana bread, caramel, vanilla, cinnamon, and oak. One reviewer on YouTube likens the nose to that of Bumbu Rum. Vanilla and oak carry through to the finish, with the top flavors being molasses, dark spice, and caramelized sugar.

The Kraken Rum Launches A New Gold Spiced Rum

The Top-Selling Rum Brand Unveils Its Latest Gold Treasure

Jersey City, NJ, March 7, 2023—Today, the world’s first and top-selling black spiced rum brand, The Kraken® Rum, emerges from its lair in the depths of the ocean to enter into the gold spiced rum category with a new release. A smooth and rich liquid, The Kraken Gold Spiced Rum is here to set THE NEW GOLD STANDARD in the rum category making waves for captains, sailors, and admirals alike.

The Kraken Gold Spiced Rum: The Product

Introducing THE NEW GOLD STANDARD for sipping: a gold spiced Caribbean rum, rich beyond words—and perhaps the only bit of lightness the legendary beast, known as “the Kraken,” loves with as much passion as its storied black ink. On the nose, The Kraken Gold Spiced Rum reveals a sweet brown medley of caramel, oak, and banana bread. Flavors of molasses and dark spice fade into caramelized sugar, with a slight finish of toasted oak and vanilla.

“As gold spiced rum occasions are now the highest among the rum category, we are proud to introduce this new offering from The Kraken, with a flavor profile all its own,” said Lander Otegui, Senior Vice President of Marketing at Proximo Spirits. “We are confident that this product will be THE NEW GOLD STANDARD in spiced rum thanks to its superb taste that we know matches what our consumers are looking for.”

A study conducted on the popularity of spiced rum brands showed The Kraken Gold Spiced Rum as a clear category favorite. Proximo Spirits commissioned a third-party double blind taste test study against category competitor, Captain Morgan®. The study revealed more than 70% of consumers prefer The Kraken Gold Spiced Rum over Captain Morgan Original Spiced Rum. Furthermore, participants also overwhelmingly indicated The Kraken Gold Spiced Rum both has “superior taste” and is “the smoothest.”1

Aroma: Sweet brown medley of caramel, oak, and banana bread. Rich vanilla with light cinnamon backtone.
Flavor: Molasses and dark spice fading into caramelized sugar. Slight finish of toasted oak and vanilla.

The Kraken Gold Spiced Rum is 35% ABV and sold nationwide at a $21.99 MSRP per 750ml. It is also available in 1L and 1.75L bottles.

“Take of Gold” New Campaign

To bring The Kraken Gold Spiced Rum from sip to screen, the brand is launching a new visual campaign, “Tale of Gold.” The advertisement, directed by Rich Lee who’s known for his work on the first three The Pirates of the Caribbean films, draws consumers into the dark world of the Kraken. Moody, foreboding visuals divulge the action-packed narrative of unworthy pirates who try to steal the precious treasure of gold from its lair and are thwarted by the Kraken.

The Kraken Golden Hour Sweepstakes

Before it dives back into the darkness, The Kraken is celebrating its newly released Gold Spiced Rum by giving consumers an opportunity to win a Golden Hour experience in the Dominican Republic.To enter The Kraken Golden Hour Sweepstakes for a chance to win a trip to the home of The Kraken Rum, scan the QR code or visit KrakenGoldenHour.com for more information.

No purchase necessary to enter or win. Purchasing a product will not improve your chances of winning. Must be documented resident of the U.S. or D.C., age 21 or older as of date of entry. Registration begins at 12:00am ET on February 1, 2023 and ends at 11:59pm ET on June 30, 2023. To enter, and for complete official rules including eligibility, prize description and approximate retail value, scan the QR code using your mobile device’s camera or directly visit www.krakengoldenhour.com. Winner selected in random drawing. Odds of winning are based on the total number of eligible entries received. No alcoholic beverage is part of any prize award. Void wherever prohibited or restricted by law. SPONSOR: Proximo Spirits, Inc., 3 Second Street, Suite 1101, Jersey City, NJ 07302.

To learn more about The Kraken Gold Spiced Rum and the rest of the Kraken’s keep, visit KrakenRum.com and follow The Kraken Rum on Instagram, Twitter, and Facebook.

^{1 Taste-tests were conducted in April 2022 by TasteMakers Research Group in a blind study.}

About The Kraken® Rum

AS IT IS TOLD, The Kraken Rum is an imported rum from the Caribbean blended with secret spices. Named for the sea beast of myth and legend, The Kraken Rum is bold, rich, and smooth. The Kraken Rum portfolio includes The Kraken Black Spiced Rum, made from unique Caribbean black spiced rum with a lingering spicy finish, The Kraken Gold Spiced Rum with a toasted oak and vanilla finish that’s smooth and tasteful, and ready-to-drink The Kraken Rum canned cocktails in flavors: Rum Punch, Cola and Ginger Beer. AS THEY SAY, “To not respect the power of the Kraken is to not respect the sea.” So, drink with respect.

The Kraken® Gold Spiced Rum. Rum with Natural Flavors and Caramel Color. 35% Alc./Vol. (70 proof). ©2023 Kraken Rum Co., Jersey City, NJ, Like the deepest sea, The Kraken® should be treated with great respect and responsibility.

Captain Morgan® is a registered trademark of Diageo North America, Inc. and referred to for product identification. Pirates of the Caribbean® is a registered trademark of Disney Enterprises, Inc. and referred to for Rich Lee’s background experience with the film franchise.

Disclaimer: Neither the author nor KRG Hospitality received compensation, monetary or otherwise, from the Kraken Rum, Proximo Spirits, or any other entity in exchange for this post.

Image: The Kraken Rum