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<p>Last year, Joe&#8217;s Crab Shack became the first and only chain restaurant to test out a no-tipping policy.</p><div>&nbsp;</div><div>Under this trial, servers at Joe&#8217;s received a starting hourly wage of $14 sans tips instead of their usual $2.14 an hour plus tips. On the surface, it was a move that seemed in line with the direction the restaurant industry was moving (their decision came right after <a href="http://www.grubstreet.com/2015/10/adam-platt-on-danny-meyer-tipping.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=joes-crab-shack-scales-back-on-no-tipping-experiment-after-receiving-widespread-disapproval-4561" target="_blank" rel="nofollow" target="_blank">Danny Meyer made a similar announcement</a>)&#8212;employees get a pay increase while the rest of us can put away our tip calculator apps. It's a win-win, right? But as it turns out, things didn&#8217;t go exactly as planned. After ten months of trial and error, the chain announced that they&#8217;ll be rolling back their no-tipping policy after receiving both staff and customer disapproval.</div><div>&nbsp;</div><div>In an interview with <a href="http://nrn.com/latest-headlines/joe-s-crab-shack-cuts-back-no-tipping-test?utm_source=1851franchise.com&utm_medium=article&utm_campaign=joes-crab-shack-scales-back-on-no-tipping-experiment-after-receiving-widespread-disapproval-4561" target="_blank" rel="nofollow" target="_blank">Nation&#8217;s Restaurant News</a>, Ignite Restaurant Group&#8217;s CEO Bob Merritt spoke up about the experiment that was implemented at 18 Midwestern Joe&#8217;s Crab Shack locations&#8212;nearly 60 percent of customers disliked the no-tipping program.</div><div>&nbsp;</div><div>&#8220;The system has to change at some point, but our customers and staff spoke very loudly. And a lot of them voted with their feet,&#8221; Merritt said. &#8220;We got negative customer counts between 8 percent to 10 percent on average among the 18 restaurants.&#8221;</div><div>&nbsp;</div><div>According to Merritt, there are two reasons behind the negative feedback: First, customers didn&#8217;t want to lose control of incentivizing service, and secondly, they didn&#8217;t trust management to pay the increase price to employees. To recoup the pay increase, Joe&#8217;s also had to up its food prices.</div><div>&nbsp;</div><div>&#8220;Unfortunately, as those of us who have been around this business for a long time know, when you roll back prices, you rarely get credit for it very quickly,&#8221; Merritt said. &#8220;It&#8217;s going to take us time to rebuild that.&#8221;</div><div>&nbsp;</div><div>During this no-tip trial, labor expenses and operating margins also increased for Joe&#8217;s, and the brand saw a 3.5 percent revenue drop.</div><div>&nbsp;</div><div><span style=" ">To read the original article, </span><a href="http://nrn.com/latest-headlines/joe-s-crab-shack-cuts-back-no-tipping-test?utm_source=1851franchise.com&utm_medium=article&utm_campaign=joes-crab-shack-scales-back-on-no-tipping-experiment-after-receiving-widespread-disapproval-4561" target="_blank" rel="nofollow" style=" ">click here.</a></div><div>&nbsp;</div>

1851 Franchise

After ten months of trial and error, the chain announced that they’ll be rolling back their no-tipping policy after receiving negative feedback from both staff and customers. 

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