kickfinadmin, Author at Kickfin

Hot Tips & Takes: Restaurant Accounting Tips from MarginEdge

Posted on January 31, 2023February 13, 2023 by kickfinadmin

How can restaurant operators use tech to stay on top of their accounting? Ask Kevin and Eric.

At Kickfin, we know the right technology helps restaurants run more efficiently — and makes operators’ jobs easier. But if you know, you know: restaurant accounting can be a beast. So we connected with MarginEdge’s Kevin O’Nell (SVP of Payments and Partnerships) and Eric Jeffay (Senior Partnership Manager) to talk about the specific accounting challenges restaurant owners face, and how tech is solving them.

What makes restaurant accounting different from other businesses?

Kevin O’Nell: I think two things stand out when it comes to accounting at a high level. First, most restaurants are structured on 4-5-4 accounting, which is unique from other small businesses and not necessarily supported in QuickBooks Desktop as well as restaurant owners would like it to be.

The second thing: A lot of owners own multiple locations, so they probably run accounting across those locations. Perhaps those locations have different ownership groups, so then when they report out earnings and dividends, they have to account for that as well.

What are some common accounting mistakes restaurant owners make?

Kevin O’Nell: The mistakes someone would make are not unique to the restaurant industry. For example — any growing entrepreneur will see accounting become more and more important as you grow and become profitable.

Sometimes, in the beginning, it’s not always the highest priority. Surely building a business, hiring the right people, putting the right processes in place, and growing sales matters, but as an organization expands and as there are more stakeholders, then all of a sudden accounting really matters.

Many people start off with their accountant as themselves, their spouse, or someone in their family. But at some point, outsourcing or hiring a professional becomes an important piece of growing their business.

Eric Jeffay: Restaurant owners very often are not traditional business people. They don’t have offices and desks, and it’s easy to fall behind on your data entry when you’re doing accounting as a restaurant operator. So they should be aware that accounting is not something that happens on the last day of the period —and certainly not at the end of the year. That’s not the time to do your data entry.

And it’s a fairly common mistake to think accounting is not a daily process. But at the end of the day, somebody has to do the data entry on a somewhat daily basis, whether it’s a software or the restaurant operator themselves.

How does tipping play into restaurant accounting?

Eric Jeffay: I’m sure you guys know this at Kickfin — but tips are liabilities, not assets. It’s important to make sure you have those funds set aside. You’re not realizing those funds, or if you are, you have to be really careful you do pay those out in full. It’s really the same as sales tax. It’s not your money.

How can tech ease the burden of accounting?

Kevin O’Nell: No one wants to have to stay and do accounting either at two o’clock in the morning after a restaurant closes or all day on Sunday morning instead of spending time with their family.

With technology like MarginEdge, QuickBooks, and Kickfin, we are allowing restaurant owners to easily digitize those transactions and that information in a way that just wasn’t possible five or 10 years ago. And so all of the paper processing that you would have done now is in a digital format that saves people tons and tons of time.

Eric Jeffay: I think Kevin is spot on. You just have to realize a lot of accounting reporting is not meant to be actionable on a day-to-day basis or a week-to-week basis. Tech can really translate a lot of those like end-of-period reports into more flash reporting where you can get more actionable data, so you’re not waiting until the 15th of the month to figure out what happened the previous month or period.

“Tech can really translate a lot of those like end-of-period reports into more flash reporting where you can get more actionable data, so you’re not waiting until the 15th of the month to figure out what happened the previous month or period.”

Are restaurants automating their accounting?

Kevin O’Nell: The main way restaurants are automating their accounting is in the data entry. You used to manually enter that data, but now there are a number of tools, including MarginEdge, that do it automatically.

For one, we’re seeing that automation is moving sales from their point of sale system into accounting software. You’re also seeing it in payroll – which is a large expense for restaurants – it can now be pulled into your accounting software on nearly a real-time basis. And, of course, receivables (like food and other orders) can be pulled into their accounting software digitally as well.

Eric Jeffay: Yes and all that data entry is super important. I also want to mention one thing — there’s absolutely a role for an accountant. Tech helps to speed up an accountant’s work to get you more actionable insights faster and to make it more efficient, but there’s 100% still a need for the accountant. Tech is a tool in their belt, but it’s not nearly at the level of replacement.

“Tech helps to speed up an accountant’s work to get you more actionable insights faster and to make it more efficient, but there’s 100% still a need for the accountant. Tech is a tool in their belt…”

What are the advantages of outsourcing your accounting?

Eric Jeffay: The advantage of outsourcing your accounting, especially if you’re a smaller restaurant or a small group of restaurants, is that you need the economy of scale to have an in-house staff accountant that you can afford to pay. So if you are smaller, if you’re growing, if you’re in an early stage, then it’s really much more cost-effective to outsource your accounting. But there are disadvantages to that. Oftentimes, I think when you outsource, you fit into that accountant’s processes and their workflow.

As you grow, the advantage to keeping your accounting in-house is you have more autonomy over accounting. That speeds up your reporting very often, and you can better customize your accounting reporting and your accounting processes if you are doing it in-house. You probably have more flexibility on what your period structure is, what your chart of account structure is, what type of flash reporting you get, and what type of tech you use.

I would also say — obviously all restaurants strive for profitability, but they do so to varying degrees and varying levels. So there are operators who have more of an economic focus on their businesses compared to others, and you probably want to shore up your weaknesses.

If you’re a chef-owner who maybe doesn’t have experience in business school – which, quite frankly, that was me – you would want to shore up by having a really strong accountant. Then you might say, “I’m going to outsource my accounting because I’m not an expert on it.” If you can’t manage an accountant or a team of accountants onsite, it might make more sense to go with experts from the outside who are going to manage themselves.

What accounting advice would you give to new restaurant owners?

Eric Jeffay: Operators often view accounting as almost a dirty word, but accounting can be a really positive thing. It’s much better to know what’s happening in terms of building a sustainable business, taking care of your staff, and making sure you’re efficient with your resources. There’s a real upside to having good accounting practices.

The other thing I would say is to get an early start on it. Make sure that you spend time on setting up systems, setting up software, and setting up processes early on that will help sustain you because it’s really easy.

Accounting is not the focus of restaurant owners and it shouldn’t be, but you should be able to have the processes on the back burner. That way you can focus on what’s happening in your dining room, what’s happening in your kitchen, and what’s happening with your marketing — the things that are sexier and more fun to spend your time on.

I think that’s where we get back into the discussion of tech being helpful. There are a lot of great programs that can make your life so much easier and more efficient by setting a lot of those things on autopilot for you.

Kevin O’Nell: When set up correctly, accounting can be a tool that allows you to spend more time with your customers and know when you’re making a dollar or losing a dollar. Set up incorrectly, it can be a complete blind spot, so it’s completely worth the time to do upfront.

Hot Tips & Takes: How Independent Pizza Restaurants Are Using Tech to Take on Big Chains in 2023

Posted on January 30, 2023January 30, 2023 by kickfinadmin

How are pizza restaurant operators adapting to new technology and taking their businesses to new heights? Ask Steve Green.

If you haven’t seen this year’s Pizza Power Report, you’re in for a surprise. Independent pizza restaurants experienced explosive growth, outpacing their big-chain competitors. We sat down with Steve Green, founder and publisher of PMQ magazine, to talk about the reasons behind independents’ success last year — and how they’ll continue to take off in 2023 with the help of new tech.

Can you define an independent pizza brand and how they differ from a larger chain?

People always ask that and I used to be somewhat uncomfortable with the answer until I just went along with the crowd. According to the companies that do a lot of this research, independent pizza restaurants mean you have fewer than 10 locations. Once you hit 10 stores in a restaurant group, you can define that as a chain.

What kind of challenges are pizza restaurants facing? And how are independents addressing them differently than larger chains?

Labor is the biggest challenge, and of course, adopting technology is a challenge. But there are great solutions coming up, like the evolution of local RDS companies popping up — think: local DoorDash or GrubHub. One way to address the labor problem is by outsourcing delivery to these services.

I’m a former Domino’s franchisee, and it was pretty easy to just follow the program. But problem-solving as an independent is a really tough job. The thing is, 60% of all pizzerias in the US are owned by an independent, so that’s where most of the people are. Independents have been doing things out of an instinct to survive, so that’s where you see most of the creativity and action.

“…Problem-solving as an independent is a really tough job.”

There’s no question about it — things have really changed. Domino’s said they were a technology company eight years ago, and they’ve made it so competitive that our whole industry has become a technology business. I’m pretty optimistic about the independents’ chances, though. I’m surprised by how adaptable they’ve been, and they’ve benefited from the army of technology companies like Kickfin that are helping solve problems. It‘s a great time to be an independent.

Do you believe independents are using tech more creatively than the bigger chains?

Yes, definitely. We’ve been following Andrew Simmons, owner of Mama Ramona’s in Ramona California, and I just love this guy. In the last three months, he’s made a commitment to showing the pizza industry how technology can really make a difference. He decided not to hire any more staff than his current 18 employees, and yet he’s on his way to doubling sales.

He’s introducing robotics, including robotic vacuum cleaners and a Picnic robotic pizza maker. He also switched from a legacy POS system to something that allows more online ordering and automation. He’s tearing down walls, remodeling his kitchen, and ordering a new Hot Rocks pizza oven. And of course, he’s outsourcing labor. His whole idea is that he can reduce the cost of making pizza and let his customers know that they’re getting real value and more pizza for their money. He’s going for the gold, living the dream.

How else can independents keep up with rising food and labor costs without alienating their customers?

I’ve seen a lot of people reminding their customers that they’re an independent pizza restaurant. They care about pizza as more than just a commodity but a part of their community. Independents have an obligation to play the personality card, use showmanship and authenticity that a chain can’t offer in their communications and social media. They need to remind customers that they aren’t choosing to raise the price but that prices are rising from the roots.

“I’ve heard more positive stories than negative ones about customers accepting price increases for pizza that they feel is above average and special.”

How can independents stay competitive in the labor market?

I know that a lot of independents already pay more than a bigger chain would, but how do they do it? It takes a bit of creativity.

When I had a Domino’s franchise in Marin County California – the richest county in California during the ‘80s – it was hard to find drivers (and when you did some of them would be driving BMWs). After we were up and running, I ended up spending my marketing dollars on hiring efforts instead of, you know, telling people about how great Domino’s was. I cut radio ads, I did box topping, I did door hanging, and if I was still in it today, I would be using social media.

My message was that we’re a fun place to work and could use some help. Then I’d introduce you to a driver to tell you what she likes about working at this Domino’s — that she likes to drive and listen to the radio and that it’s about more than the money. This strategy might be something that independents can get away with more so than a chain could these days.

In spite of rising costs and labor shortages, how did independent pizza restaurants manage to grow so much in 2022? Do you expect the trend to continue in 2023?

Yeah, it’s interesting. Most of the time it’s the chains that have the muscle to keep growing. The pizza industry is a mature industry in that there’s always growth.

One theory is that the number of new businesses that opened in 2022 outpaced the number of businesses that went under, giving the appearance that independents grew much more. It could be regrowth from the destruction we saw in the past three years of business. But I’ve also heard a number of people say that maybe the independents weren’t necessarily growing extra fast but that the chains are looking at the risky environment and opting not to grow as aggressively.

On the other hand, you always have new people who want to get into the pizza business who bring new enthusiasm to the industry. It’s like a volcano, always bubbling up with hot, new ideas. And you end up with a steady stream of people coming in to make better pizza and offer a better pizza experience.

Are there any specific trends we should expect this year from both independent and chain pizza restaurants?

That’s always the big question. It’s probably going to be working with less on the labor side and leaning into automation. But it’ll also be creating an experience that seems like it’s not automation — keeping the humanity while also becoming more efficient.

On the consumer side, great pizza at a fair price will just never get old. When you look at the bottom line, that’s always what’s driven the industry.

Do you have any advice for pizza restaurant owners?

Stay on top of new technology. We’re definitely following this closely in our PMQ Think Tank, which is our online community where people in the pizza industry can ask each other questions. We’ve got 15 years of wisdom and information from our users, and it’s a great place to go when you’re just getting started in the industry.

Also, subscribe to PMQ magazine. It’s not written by us as experts but by our readers who are really connected to the industry. We spy on them through our Think Tank, we talk to them, and we do stories about them. And of course, our editor inserts some wisdom from his interviews with people in the industry. We put a lot of effort into it to show what’s really going on in pizza.

Guide to California Tipping Laws

Posted on January 23, 2023December 22, 2025 by kickfinadmin

We’re obviously pro-tipping around here — but even more so, we’re pro-tip-regulation-compliance. With each state having their own unique laws regarding tip pools and minimum wages, it can get confusing.

For our California restaurant owners, we took a deep dive into your specific tipping regulations that you might not know about. Take a look at how California tip pooling laws differ from federal regulations and how you can stay on the up-and-up.

What is Tip Pooling?

Tip pooling is when employees who receive tips collect and share their tips with other members of their team. For example, servers can put their tips into a collective “pool” and then divide them among cooks, dishwashers, bussers, bartenders, etc. This practice promotes team spirit and collaboration among staff, as they all rely upon each other for success.

California Tip Pooling Laws Explained

The Fair Labor Standards Act (FLSA) allows employers to require non-exempt employees (i.e., those eligible for overtime pay) to participate in tip pools, provided that employers follow strict regulations.

California takes it a step further to protect employees’ earnings. Here are a few key differences to pay attention to:

Who Is Included?

Tips can be shared with staff who are part of the customer’s “chain of service,” which includes front-of-house staff such as servers, bartenders, bussers, and hosts–employees who have provide some level of direct table service. There is more gray area around back-of-house staff (like cooks and dishwashers) who do not provide direct table service but arguably contribute to the chain of service. Here it’s especially important to consult with legal counsel who can provide guidance on your specific policy.

Making Tip Pools Fair

While California does not ban mandatory tip pools, the law requires that pooled tips be distributed in a “fair and reasonable” manner. You must set a formula to determine tip distribution — and it’s up to the California DOL Standards Enforcement to determine what’s fair on a case-by-case basis.

Say Goodbye to the Tip Credit

Whether you pool tips or not, this is one to pay attention to. California’s legislation no longer makes a distinction between tipped and non-tipped workers — so there is also no tipped minimum wage. Restaurant owners cannot claim a “tip credit” and must pay their servers the full minimum wage.

California Allows “Double Tipping”

In California, mandatory service charges do not count as tips, but they can count as wages. The employer has a right to keep service charges and distribute them as they see fit — so they can distribute them to servers if they choose. Often called “double tipping,” this allows the server to earn money from both a mandatory service charge and any tips that customers leave voluntarily.

In this case, the service fees paid to employees can count toward minimum wage and overtime pay, but employers are required to withhold payroll taxes when distributing service charges to employees.

What’s at Stake?

California’s DOL Standards Enforcement takes wage theft and illegal tip pooling seriously. Penalties for breaking any state tipping regulations include fines of up to $1,000, paying full restitution to harmed employees, and even 60 days in jail.

Knowing both state and federal tipping laws protects you and your employees from improper tip pooling practices and potential lawsuits. As always, consult with a lawyer to ensure that you’re in compliance with all federal, state, and local ordinances.

Looking for a partner that will help you comply with California’s tipping regulations? Kickfin’s digital tipping platform puts up guardrails to prevent improper tipping practices — and our digital tipping software is pretty cool, too. Request a demo of Kickfin today.

How to Comply with Tipping Laws in Texas

Posted on January 19, 2023January 19, 2023 by kickfinadmin

Like many other Texas restaurant owners, you were probably shocked when a Dallas barbecue joint was ordered to pay their employees nearly $900,000 in stolen tips and overtime. It may have even sparked a bit of anxiety about your own tipping policies and practices.

Illegal and unethical tipping practices not only decimate your restaurant financially, but can also tank your reputation. Avoid losing your business and the community’s trust by freshening up on Texas tipping laws.

Who Can Participate in Tip Pools?

In Texas, mandatory tip pools are perfectly legal, so long as you follow the guidelines laid out by the Fair Labor Standards Act (FLSA).

For one, only employees who “customarily and regularly receive tips”— namely servers, bartenders, hosts, and expos — can participate in a tip pool, and back-of-house employees cannot.

Owners, managers and supervisors are also barred from participating in tip pools. Tips belong expressly to the tipped employee, so an owner cannot take a cut of the tip pool, and neither can their agents in the form of managers. If you’re caught distributing tips to owners or managers, it will be considered wage theft, and you will be ordered to pay back the tips and subject to hefty fines by the DOL.

Learn to Properly Calculate the Tip Credit

The tip credit allows employers to pay tipped employees a lower hourly wage, with the idea that the server will earn at least minimum wage or more in tips. In Texas, employers can take up to $5.12 per hour in tip credit. But if used incorrectly, you could end up owing your employees back pay.

In order to take the tip credit, your employee’s hourly wages must be greater than or equal to the minimum wage for their hours worked — at least $7.25 per hour in Texas. Employees also must earn more than $30 per month in tips for the tip credit to apply.

And head’s up — the tip credit can still apply when your employees are earning overtime. Ensure that you’re properly compensating employees when their work hours exceed 40 per week.

Using the tip credit requires a good bit of math (especially when overtime is involved), and there’s room for human error in your calculations. Check out our primer on calculating the tip credit and then go double-check your math.

How to Protect Your Business & Employees

You don’t want to jip your employees — nor do you want to risk your entire business. Now that you’re more familiar with Texas tipping laws, here are a few ways you can comply with them.

Hire an Attorney

It’s best practice to consult with a lawyer with any legal questions. An attorney can give you detailed, personalized advice about what’s best for your business and how to stay on the right side of the law.

Choose Vendors that Protect You

At Kickfin, we partner with restaurants to revolutionize everything about their gratuity management systems — including setting up guardrails to comply with tipping laws. Request a demo of Kickfin today.

What You Need to Know About Florida Tip Laws

Posted on January 19, 2023January 19, 2023 by kickfinadmin

Filled with tourist destinations and great weather, Florida is the perfect place for restaurants to thrive — as long as they can comply with tipping regulations. Like many other states, Florida has unique state tipping laws that are often in flux.

Whether you own a seafood shack right on the beach or a fine-dining spot in a Miami hotel, you need to know the ins and outs of Florida’s tipping laws.

Is Tip Pooling Legal in Florida?

Many restaurants implement tip pooling systems to create equitable pay for servers and foster a collaborative work environment, but laws around tip pools can get fuzzy state-by-state.

Florida restaurant owners can breathe a sigh of relief, though — Florida’s tip pooling laws align with the federal regulations laid out by the Fair Labor Standards Act (FLSA).

Florida’s Minimum Wage & Tip Credit

Florida joins the majority of states in allowing employers to take the tip credit — but not quite as much as other states. Federal rules set the minimum wage at $7.25 per hour and allow employers to take up to $5.12 in tip credit.

At the time of publication, Florida’s minimum wage is $11 per hour, significantly higher than the federal minimum wage. On top of an increased minimum wage, Florida only allows employers to take a tip credit of $3.02 per hour. With these regulations in place, Florida restaurant owners must pay tipped employees at least $7.98 per hour.

But head’s up — the minimum wage is increasing. As of September 30, 2023, Florida’s minimum wage will increase to $12.00 per hour, and will continue increasing each year until it reaches $15.00 per hour in 2026. Looking ahead, restaurant owners can expect to pay a tipped minimum wage of $11.98 per hour.

Mandatory Service Charges Are Wages in Florida

If you’re charging a mandatory service fee for large parties or to reserve a table, you might hope that will count as a tip for your service staff.

Mandatory service charges are not considered tips in Florida, but rather are the property of the employer. The employer may choose to distribute the service charge to an employee, but these would count as wages and would be subject to payroll tax withholdings.

That being said, Florida has not joined other states in requiring employers to make it clear to customers that mandatory service charges are not considered tips.

Tip laws can get tricky, so always consult a lawyer when changing tip policy.

At Kickfin, we want to help restaurants comply with tipping regulations and save you time and energy. We put up guardrails that prevent improper tipping practices and make it easy to instantly tip out your staff. Request a demo to see for yourself.

How to Enable Tipping at Quick Service Restaurants Without Alienating Your Customers

Posted on December 20, 2022January 11, 2023 by kickfinadmin

Unless you’ve completely sworn off social media at the moment — and if that’s the case, no one would blame you! — you’ve probably heard some chatter around the new tipping model at Starbucks.

Long story short: Everyone has an opinion.

Some customers (and employees) feel that they’re being put in an awkward position because a tip isn’t warranted when there’s minimal guest-employee interaction. But others are grateful for the opportunity to give a small show of thanks for stretched-thin service providers. Plus, those tips can make a meaningful impact on employees’ take-home pay.

We’d venture to guess that this little firestorm isn’t just about Starbucks, but part of a much more layered conversation about tipping practices in general: how they’ve evolved in our digital age, and especially how they’re being embraced (or not…) by quick-service restaurants.

Real talk: Here at Kickfin, it’s no secret that we’re a pro-tipping team. We believe whole-heartedly that service industry employees make the world go round, and that tipping often increases their earning potential far beyond what revenue constraints would allow their employers to pay them. And of course, tipping can benefit employers, too.

But we can’t forget about the guest experience. Ultimately, tipping is voluntary and should always, always be at the discretion of the customer.

While QSRs are wise to keep pace with the times and digitize their tip jars: read on for a few best practices that will ensure your guests embrace the change (no pun intended…) and continue to think of tipping as an option, not a requirement.

But first: Is “Guilt Tipping” Real?

It happens every day: You place your order at the counter, the cashier turns the iPad around, and you’ve got to choose to leave a 20, 25 or 30% tip for the staff. (It seems like those percentages just keep climbing, right?)

Does a 30-second interaction necessitate a tip? Maybe, maybe not — but you find yourself frantically hitting a button because you don’t want to be the jerk who didn’t leave a tip.

There’s a name for that: guilt tipping. No one wants to short-change a service industry worker, and many of us even see tipping as some kind of barometer for morality.

Since tipping has expanded into new areas, there isn’t really a set custom for the “appropriate” amount to tip. Is it 20%, like you would at an FSR? Is it less? This uncertainty often leads people to panic-click on the most reasonable option on the screen out of guilt. Whether real or imagined, feelings of guilt around tipping can lead to major backlash from customers — and displaced anger at employees.

How to make QSR tips work for everyone

The truth is, most employees enjoy the wage boost that tips provide, and customers want to reward good service, even when they don’t have cash on hand. However, the benefits of credit card tips can be overshadowed by the awkward social customs around tipping. That’s why enabling credit card tips requires a bit of finesse.

Here are a few suggestions for enabling tipping without offending customers.

1. Change tip amounts

Rather than prompting customers to tip based on percentage, think of your credit card tips as a digital tip jar. Make the tip suggestions similar to what people would toss into a tip jar — like 75 cents, a dollar, or even just rounding up to the next dollar. Customers won’t feel the whiplash of their coffee order suddenly costing $3 more than it used to, but they still get the option to reward baristas for good service.

2. Avoid verbal tipping prompts

Nothing is more awkward – for employees and customers alike – than asking for a tip out loud. Employees don’t want to pressure their customers into leaving a tip, and no one wants to confidently say “no” in front of a line of people. Some customers may also feel uncomfortable stating how much they’d like to leave — as if they’re announcing how “good” of a person they are.

Instead, keep the tip prompts as private as possible. Include the prompts on the POS or credit card reader so your customers can silently decide on their tip amount.

3. Make it clear that tipping is optional

In the United States, most customers at FSRs are aware that servers rely on tips to supplement their take-home pay — and that they should tip appropriately for their service. But at a QSR, the lines get a little blurry. Is leaving a tip now an expectation (or even a requirement) for counter service?

Take the pressure off the customer, and leave no questions unanswered. Make it apparent that employees are paid hourly and that tips are just an optional bonus to their income, not their bread and butter.

You can also include language in your tip prompts that explicitly reminds customers that tips are optional. That way when the iPad swivels around to the customer, they know it’s not a moral question but rather just an extra thank-you to their regular barista.

Take digital tipping to the next level

Of course, now that you’re accepting more credit card tips, you’ll need an easy way to distribute them to staff. And we’ve got a few ideas. With Kickfin, you can instantly transfer tips straight to your employees’ bank accounts — meaning no cash runs and more financial freedom for employees. Request a demo of Kickfin today to learn more.

What’s Driving Hotel Technology Trends? Key Insights from HT-Next

Posted on December 19, 2022December 19, 2022 by kickfinadmin

Kickfin recently sponsored and attended HT-Next, a premiere hotel technology conference. Over four days in Miami, Kickfin co-founders Justin Roberts and Brian Hassan met with hospitality industry leaders, tech innovators, and top hotel operators to learn about key goals and concerns for 2023. Here are some of the key takeaways from the event.

Renewed Focus on Sustainability

Grant Romundt, co-founder of Ocean Builders, spoke to an industry trend that’s been building for a while (and isn’t slowing down): sustainability. Now more than ever, guests want to patronize businesses that share their core values and beliefs. Specifically, they’re choosing hotels based on how much those brands are doing to protect the environment, especially in beautiful, tropical locations.

Ocean Builders is aiming to do just that by building high-tech eco-restorative floating homes that provide guests with a one-of-a-kind experience while also preserving the ecosystem to serve guests for generations to come.

Expanding the Guest Experience

The hospitality experience you create isn’t limited to the four walls of your hotel. Instead, it extends to every aspect of your guest’s stay, including the activities they do while they’re away from the hotel. With that in mind, HT-Next partnered with Mobi to explore the possibilities of hyper-personalized guest experiences built by AI.

AI now offers you the opportunity to build the perfect trip for each individual guest. Using guest data and your knowledge of the area around your hotel, you can build AIs that will plan a personalized suggested itinerary for your guests, taking hospitality to the next level.

Bouncing Back from Covid

Most of us might feel like things are “back to normal,” but some hotels are still feeling the strain of the Covid-19 pandemic. And they’re turning to tech to bring them back to life.

A panel of Miami hotel general managers shared how they stayed afloat during the height of the pandemic, how the travel and hospitality industries are bouncing back, and how tech has quickly become a huge part of their daily operations.

Solving Labor Shortage Concerns

Labor continues to be a point of contention in hospitality. Questions about how to attract new hires and how to retain the employees you have continue to vex hoteliers in this tight labor market. The answer isn’t as simple as raising wages (although that doesn’t hurt). Instead, industry leaders are looking to technology to help create better work environments and more streamlined processes to get things done, even at sub-optimal staffing levels.

At Kickfin, our goal is to provide hotel staff with more opportunities to earn tips through digital tipping software — allowing for guests to tip more often in an increasingly cashless society. We also simplify the tip payment process so employees have access to their earnings faster (a major selling point for potential hires).

Our main takeaway: Hotel technology isn’t going anywhere. Expect to see more automated hotel operations, better uses of guest data, and sky-high guest experience expectations.

How to Calculate the Tip Credit

Posted on December 19, 2022December 20, 2022 by kickfinadmin

Tipping could be considered the ultimate win-win for restaurant teams. Not only do tips significantly increase the earning potential of restaurant employees; in states that allow the tip credit, tips can also help offset labor costs for employers.

While the tip credit can be a boon to a restaurant’s bottom line, calculating the tip credit can make payroll a little trickier.

While most business owners can simply multiply their staff’s hourly wage by their hours worked, restaurant owners who want to take advantage of the tip credit will need to take a few extra steps to determine how much they need to pay their employees on payday.

The downside? A little bit of math. But don’t worry — we can help you out with that part. Here’s what you need to know in order to calculate the tip credit.

First things first: Does the tip credit exist in your state?

Before you start running the numbers, you need to make sure the tip credit is legal where you operate. Tipping regulations vary pretty widely state by state — and the tip credit is no exception.

In a few states, you must pay the full minimum wage, even for tipped employees. At the time of publication, those states are:

Alaska
California
Minnesota
Montana
Nevada
Oregon
Washington

(If you operate restaurants in one of these states, we’ve got another post on tip calculations that might be helpful to you)

If your state isn’t listed above, then the tip credit is probably allowed in your state. Read on to ensure you’re calculating the tip credit accurately and legally. (And please keep in mind — this post isn’t intended to be legal guidance. Always contact a lawyer with specific questions to ensure your restaurant is compliant with state and federal tipping regulations.)

How does the tip credit work?

With the federal minimum wage still set at $7.25 an hour, employees are required to make at least that much while working at your restaurant — but that’s not how much you have to pay them. Based on the federal tipped minimum wage requirements, you could take a tip credit of up to $5.12 an hour.

How do you calculate the tip credit?

(Keep in mind: these steps are based on federal laws. Your state may have additional or different regulations that apply to your restaurant — so again, consult a lawyer if you have questions.)

1. Keep meticulous records

One of the key tenets of taking the tip credit: making sure employees earn at least minimum wage on an hourly basis. But in order to do that calculation, you’re going to need detailed records that include hours worked, tips earned, and any tips shared with other employees. This will all come in handy when it’s time to process payroll.

2. Grab your calculator

When payroll time arrives, it’s time to revisit some of those multiplication tables that you thought you left in grade school.

As an example, let’s calculate payroll for a part-time server who worked 40 hours during the two week pay period, and earned $250 in tips.

How much she must earn by federal minimum wage standards: 40 hours x $7.25 = $290
How much can you take in tip credit: 40 hours x $5.12 = $204.8
How much she earned in cash wages: 40 hours x $2.13 = $85.2

Now, we’ll use all of these calculations to see if she earned enough to meet minimum wage:

$250 tips + $85.20 hourly = $335.20 total

Since this server earned well over the minimum wage, you can claim the full tip credit of $204.80.

But what if she had come up short?

If the same server worked the same hours but only earned $200 in tips, she would have earned $285.20 — a little short of minimum wage. You’ll need to make up the $4.80 difference in that situation.

How do you calculate the tip credit when paying overtime?

While most restaurants try to avoid paying overtime, short-staffed restaurants may not have an option. If you do pay overtime, here’s how it works when also calculating the tip credit. For example, let’s say that a server worked 50 hours and earned $300 in tips.

$7.25 minimum wage x 1.5 = $10.88
Maximum tip credit remains $5.12/hour
Overtime hourly tipped wage = $5.76

Now, let’s do some math:

How much must she earn in overtime minimum wage: 10 hours x $10.88 = $108.80
Add her regular hourly minimum to the overtime minimum: $108.80 + $290 = $398.80
Tip credit minimum wage: 10 hours x $5.76 = $57.76
Maximum tip credit: 50 hours x $5.12 = $256

Finally, you can add tips, regular tipped minimum wage, and overtime tipped minimum wage to see if she earned at least $398.80:

$300 in tips + $85.20 regular hourly wage + $57.76 overtime minimum wage = $442.96

Even with overtime, this server still made enough for you to claim the maximum tip credit of $256. Again, if she hadn’t, you would have to make up the difference.

Additional tip credit resources

Simplify employee payments with Kickfin!

Kickfin makes it easy to pay out your tipped employees — no calculator (or cash) required. Request a demo today and see our cashless tipping software in action!

Can Restaurant Owners and Managers Keep Tips?

Posted on December 5, 2022December 19, 2022 by kickfinadmin

In a word: Nope.

Okay, it’s not actually that simple. But if you’re in doubt (and in a hurry), the safest answer is generally no, owners and managers can’t keep tips their employees received, or participate in a tip pool.

If you’ve got a minute: read on for the full story on why owners and managers (usually) can’t earn tips, when it’s actually legal, and a look at some rather extreme examples of wage theft in restaurants.

Wait: Are managers really taking tips from their employees?

You’ve probably heard of restaurant management teams that found themselves in legal hot water because owners or managers have taken a cut of their employees’ tips. These lawsuits can be financially devastating for hospitality brands.

Why does it happen? Unfortunately, sometimes managers knowingly steal tips from their employees. And yes, that’s very bad.

But often, greed isn’t the (only) culprit. Tipping regulations are notoriously complicated. Plus, they’re apt to change, and they can vary at the federal, state and even local levels. While you can’t plead ignorance in court, it’s certainly understandable if people are confused.

Here’s where it gets tricky: Restaurants move fast. The best managers pitch in when they see their team needs support. It’s not uncommon to see them showing a guest to their seat, delivering food to a table, helping out a busser.

If they’re jumping into front-of-house work on a regular basis, it’s only natural to assume they might deserve a share of tipped earnings as well. But generally speaking, it’s not theirs for the taking.

Why can’t owners and managers keep tips?

If owners and managers are directly contributing to a guest’s experience, shouldn’t they benefit from that guest’s show of thanks?

Not really.

The logic here is that owners and managers earn a salary. Tipped employees are hourly, and they generally rely on their tips to support their livelihoods — especially for employees who earn as little as $2.13 an hour. While it may feel unfair that managers can’t keep tips during shifts where they jumped in and saved the day, there were likely plenty of slow shifts where they still consistently make their salary. Servers, on the other hand, don’t have that level of predictability: when business slows down, so do tips.

Rationale aside, the bottom line is that it’s illegal for owners and managers to keep tips. Tips are seen as the property of employees only, so if owners are skimming their tips, they’re taking part in wage theft. The practice is often called “tip pocketing,” as servers (rightfully) view this as their employers grifting their hard-earned tips.

Owners and managers most commonly make this mistake through tip pools. When requiring employees to pool their tips, owners cannot legally redistribute any tips to managers, owners, or non-tipped employees who are earning the full federal minimum wage.

While you might think tip pooling will garner teamwork and collaboration, check out the strict laws around tip pooling and consult a lawyer before you get started.

Exceptions for managers

It wouldn’t be a rule if there weren’t an exception, right?

When it comes to keeping tips, managers have a little bit more leeway than owners do. Managers can keep tips earned through service they provide directly and solely.

So what does that mean?

The keywords here are “directly” and “solely.” If a manager took a table’s entire order, ran all of their food and drinks, and presented them with their check, then they are technically allowed to keep any tip the customers leave. This often occurs when “shift managers” (who are generally just head servers) oversee a shift while still relying on tips for their own income.

But again: if you’re a manager who just stepped in to help out a server who was in the weeds, the tip still belongs to the server.

What happens if a manager or owner keeps a tip?

For restaurant owners, the consequences of keeping employee tips could bring down your entire business.

Repayment: First of all, you’ll owe all of the stolen wages back to the employees, plus a fine of over $1,100 per violation. The repayment can be devastating — just ask these restaurant owners who owed over $157,000 in tips.
Damages: Restaurants can also be sued for damages, and some establishments simply can’t come back from such a devastating loss.
Poor customer experience: If customers are aware that management is keeping tips, they might not feel comfortable tipping at all.
Employee distrust and resentment: A restaurant’s culture will take a major hit if employees sense that they’re not receiving the tips they have earned.

One important thing to note: The consequences and fines for violating tip laws apply, whether you were aware it was illegal or not.

How do you ensure everyone is playing by the rules?

The short answer: cut the cash and go digital.

Tipping out in cash creates the perfect opportunity for skimming and wage theft, given the lack of visibility into cash flow and inability to track payments.

But even if your team is 100% trustworthy, tip distribution is far from foolproof. When your tipping system relies on cash, human error abounds, and managers can unknowingly create or participate in illegal tip pools.

A digital tipping platform allows you to put guardrails in place, so the only the right people (in the right roles) get tipped out. A software like Kickfin is built for flexibility, so if you have people who work multiple roles — or at multiple sites — you can ensure everyone is getting what they are legally entitled to.

Most importantly, a digital tipping system gives you the power to track everything. If an issue ever arises, you can easily pull payment history by individual, shift, or site.

Want to ensure your team is legally tipping out? Check out a free demo of Kickfin today to learn about our instant digital tipping software!

The Brass Tap/Beef ‘O’ Brady’s Partners with Kickfin and Visa Direct to Enable Cashless Tip-outs for Employees

Posted on December 1, 2022February 2, 2023 by kickfinadmin

FSC Franchise Co., which franchises more than 200 Beef ‘O’ Brady’s and Brass Tap locations, has long been known for a workplace culture that fosters the wellbeing of employees.

So it’s no surprise that the franchisor was an early adopter of digital tipping. Following an RFP process — and after soliciting input from their employees — FSC selected Kickfin as the the company’s digital tipping solution.

With Kickfin, Beef ‘O’ Brady’s and Brass Tap now employees receive tips in real-time(1), at the end of every shift — directly to their bank of choice. And, importantly, the brands have realized new efficiencies by eliminating cash tip-outs and all of the operational headaches that come along with cash. (Think: fewer bank runs, improved tracking and reporting, significantly reduced risk of theft, skimming and human error…the list goes on.)

For more details on our partnership, read the full press release below. (And if you’re ready to enable a secure, compliant, cashless tipping program across your org? You know where to find us!)

The Brass Tap/Beef ‘O’ Brady’s Partners with Kickfin and Visa Direct to Enable Cashless Tip-outs for Employees

The Brass Tap and Beef ‘O’ Brady’s, owned by FSC Franchise Co., reaffirm their employee-first culture by providing real-time1 access to tip earnings.

AUSTIN, Texas, Nov. 30, 2022 /PRNewswire/ — Kickfin, the largest tip disbursement enabler in the U.S., today announced its partnership with FSC Franchise Co., which franchises more than 200 locations, to serve as the franchisor’s gratuity management platform.

Leveraging the combined technology of Kickfin and Visa Direct, FSC Franchise Co. can send real-time1, cashless tip payouts directly to their employees’ existing bank accounts.

“Cash tip payouts had become unworkable for our team, so we began exploring digital tipping solutions,” said Scott SirLouis, COO of FSC. “After running an RFP process, we selected Kickfin because it ensured our tipping program would be scalable and compliant across our entire organization. And most importantly, we had buy-in from our employees: when we surveyed our staff, 100% opted to get instant tip payouts through Kickfin.”

Kickfin is the only gratuity management platform that gives employees the power to choose how and when they want to receive their tips, so they are not limited to a third-party issued paycard. Brands like FSC Franchise Co., Marco’s Pizza, Walk-On’s Sports Bistreaux and Rock N’ Roll Sushi use Kickfin to improve recruiting and retention while eliminating operational challenges related to cash management.

Kickfin’s technology also ensures organizations remain compliant with complicated, ever-changing tip pooling regulations, and integrates with existing POS and payroll systems. Kickfin customers have saved 5-15 hours per manager, per location every week.

“Many hospitality employees have chosen to work in this industry because they get access to their earnings after every shift,” said Justin Roberts, co-CEO of Kickfin. “As restaurants struggle to pay out cash tips, it’s critical that they digitize their tip payment program to ensure that their staff continue to get immediate access to their tips. Brands like FSC Franchise Co. are setting a new standard for employers that understand the importance of prioritizing the needs of their people and modernizing their operations.”

ABOUT FSC FRANCHISE CO
FSC Franchise Co. is the industry-leading franchisor behind Beef ‘O’ Brady’s and The Brass Tap, with nearly 200 locations across the United States. Beef ‘O’ Brady’s, with 143 locations in 21 states, is a family sports pub concept that provides the perfect atmosphere for friends and families to watch the game and grab a bite. The Brass Tap, a craft beer bar and entertainment venue with 44 current locations in 16 states, is known for extensive localized brewery offerings, specialty cocktails and premium wines paired perfectly with a select menu of upscale shareables.

ABOUT KICKFIN
Ranked the #1 tipping software, Kickfin is the nation’s largest provider of instant, cashless tip payments. Restaurants, bars and hotels use Kickfin to digitally accept, calculate and tip-out their employees in real-time. By removing cash from the tip payment process, businesses can focus on delighting their customers — while maximizing the earning potential of their people.

1 Actual fund availability depends on receiving financial institution and region.