Author: Keely Hungate

Need a new restaurant podcast to binge? We’ve got a rec for you!

On the Forktales podcast, Joseph Szala seeks out industry leaders to dish on the future of the food and beverage industry. From owner-operators to branding experts, Joseph looks for insights into every aspect of the ever-changing industry from a wide variety of guests — including our very own co-CEO, Brian Hassan. Brian sat down with Joseph to tell him our story and discuss hot-button issues in the service and hospitality industries, including the future of tipping.

Read on for a recap of the interview — or watch the full episode here.

An Armored Truck Sparks an Idea

When Brian Hassan and Justin Roberts noticed an armored truck delivering cash to the San Francisco restaurant where they were eating, they started asking questions. With so many people paying with credit cards, why would the restaurant need that much cash each night? The answer — to tip out employees. 

With their entrepreneurial brains already starting to turn, they talked to the server, bartender, and manager about the need for nightly cash in order to retain employees, and the idea for Kickfin was born. Instead of requiring frequent and dangerous cash runs or deliveries, we’ve delivered instant digital tip-outs straight to service employees’ bank accounts since 2017.

Tip Reporting Insight

While many people still think of tips as untaxed and unreported, the rise of credit card tips has changed all of that. Any credit tips are recorded in the POS system and properly reported, eliminating concerns about tax issues. Also, in the wake of the pandemic, reported tips determined how much service workers received in unemployment payouts, so they’re much less likely to seek out tax loopholes and workarounds. These days, worrying about unreported tips reflects a “pre-Covid way of thinking,” according to Brian.

Cash and Crime

Joseph and Brian also talked about the importance of going cashless in the face of rising crime. For many service industry workers, their “George Costanza wallets,” as Brian called them, could pose a major threat to their safety — both personal and financial. Not only could they be targeted for a robbery and physically harmed, but they would also be unable to recoup their losses. And if the cash never makes it to the bank, workers may be unable to cover their living expenses. 

The Pandemic’s Effect on Tipping

Of course, the pandemic labor shortage came up, and Brian offered his insight into how the pandemic changed our views about service industry workers. At the height of the COVID-19 pandemic, service and hospitality workers showed themselves to be truly essential. During the financial uncertainty of the pandemic, average tips have actually grown higher than we’ve ever seen before. According to Brian, that’s because Americans are recognizing not only the hard work but also the risk taken on by restaurant employees in order to deliver great service and make money. 

The pandemic also altered our views of tipping culture and who “deserves” a tip. Brian and Joseph both shared their experiences with feeling “tip shamed” when asked to tip in a non-traditional setting, like at a drive-thru, and feeling it would be tacky not to leave a tip. However, this is all part of an effort to find and retain workers without raising your labor costs. With daily tip-outs on top of an hourly wage, many QSRs can offer much more of an incentive to stay, to the tune of an extra $4 an hour. And these same QSRs are now looking to Kickfin to provide tip-out solutions.

Retaining Scarce Employees

With a newfound appreciation for service and hospitality workers also comes more competition to keep your best employees. According to restaurant managers, daily payouts are one of the best retention strategies. Traditionally, this meant handling a lot of cash. Brian himself wondered why restaurants don’t get away from the cumbersome and dangerous nature of paying in cash by putting tips on payroll — but restaurant owners quickly pushed back on that. 

Most servers and bartenders like the quick payment turnaround of the service industry. Usually, they can pick up a shift in order to pay their bills the next day, so when you alter their pay schedule, your best employees are likely to look elsewhere for work. Ultimately, Kickfin seeks to meet restaurant owners’ employment needs while also reducing their reliance on cash. 

While the pandemic created a need for automation and social distance, we still seek that human connection, especially in a hospitality experience. Brian spoke about his own personal desires when it comes to dining out, saying “Will I pay more to have the privilege of dining and feeling the energy of other patrons and talking to the bartender? Absolutely. And I want to be able to reward [the server] for that personal touch.”

Listen to the full episode of Forktales to hear Brian talk more about technology in the service industry and the future of Kickfin.

In a tough labor market, everyone’s talking about recruiting — but what happens when you actually make a hire?

This week, Kickfin co-hosted a webinar all about building a scalable onboarding process that will reduce turnover and keep you in compliance.

The panelists

We were honored to have an all-star panel of folks who share decades of experience working with hospitality employers.

• Justin Roberts, Co-founder, Kickfin
• Jenny Ryyppa-Rodriguez, Territory Manager, Heartland US
• Beth Schroeder, Partner, Raines Feldman LLP

The agenda

Our panelists focused on three key areas areas of discussion:

1. Why does onboarding matter?
2. Top onboarding mistakes restaurant employers make
3. 5 ways to optimize your onboarding for scalability and compliance

Watch the whole webinar below!

The demand for cashless tipping has reached an all-time high. And for good reason: When was the last time you paid for something in cash? 

Or perhaps a better question: When was the last time a valet assistant pulled your car around, and you experienced that all-too-familiar moment of panic when you realized you had zero cash for a tip? 

According to the Federal Reserve’s 2021 report, cash accounted for only 19 percent of all transactions in 2020, down seven percentage points from 2019 — and we expect that decline to continue. By and large, consumers now pay for purchases with their debit cards, credit cards or using digital options like ApplePay or PayPal.

To further complicate the cash tip conundrum: When people do carry cash, they often are not carrying small bills used for tips, since most bank ATMs generate $20 bills as a minimum. 

There are certainly perks to this cashless trend. And for many restaurant workers, it’s a non-issue because guests can easily leave credit card or digital tips when they pay their bill. But for workers who have always relied on cash tips as a significant portion of their take-home pay — like valet parking assistants, bellhops, hotel maids, airport skycaps — it’s a big problem. 

But it’s one that can be solved, thanks to cashless tipping technology. Long story short: cashless tipping gives your customers an opportunity to show their appreciation for your employees, no cash required. Here’s everything you need to know about cashless tipping…

What is cashless tipping?

Cashless tipping, sometimes known as digital tipping, delivers tips from one party to another online via:

• tip acceptance software: allows a diner or guest to tip a service provider digitally/without cash
• tip distribution software:allows an employer to digitally/instantly pay out tips to an employee at the end of a shift.

Why is it important to offer cashless tipping options? 

Cashless tipping options ensure that tipped employees can continue to maximize their tip earnings and access them in a timely manner. They can also make it easier for employees to accurately track and report on their tip earnings for tax purposes (which, in turn, ensures they can qualify for unemployment, loans, mortgages, credit cards, etc.).

On the employer side, introducing cashless tipping into your operations gives you a more seamless way to facilitate tipping across your team, building more transparency, trust, and employee loyalty. Cashless tipping also allows you to track tips more carefully, both for reporting to the IRS and so you can better understand employee performance.

What are the benefits of cashless tipping for restaurants?

Most U.S. restaurants already accept cashless tips via credit cards or at your point-of-sale system (POS). That means consumers can easily tip, even if they’re not carrying cash. 

But paying out those cashless tips at the end of a shift becomes a problem. As a result, cashless tip distribution software has become a must-have tool for restaurants, especially those where the majority of tips are paid by consumers on credit cards, debit cards, or your POS. 

Cashless tip distribution software, A.K.A. digital or automated tip distribution software, delivers a number of benefits to both employers and employees:

Time and cost savings

More effective recruiting

OK, one more time for the people in the back: employees want instant access to their tips. So when restaurants can offer real-time, digital tip payouts, that becomes a great recruiting tool. It keeps hospitality employers competitive with other gig-economy jobs that offer instant, daily pay — and more importantly, it shows you care about the financial wellbeing of your workforce.

Employee retention

Compliance with labor and tipping laws

Hospitality employers must pay at least the federal minimum wage, which comes to $7.25. Under the Fair Labor Standards Act (FLSA), however, restaurants are eligible for a tip credit, which allows them to drop that number to as low as $2.13 an hour (depending on the state in which your business operates), relying on tips to make up the difference. This puts the onus on the employer to ensure ensure their employees are receiving enough tips to get them to minimum wage. Digitizing tip-outs makes it easy to easy to track and report tips — giving you, your employees, and your accounting team 100% visibility.

Also worth noting: Tip pooling laws are complicated and can vary greatly from one state to the next. Cashless tip distribution software helps restaurants maintain compliance, ensuring your employees are being treated fairly and keeping your restaurant out of legal hot water. 

What are the benefits of cashless tipping in hotels and airports? 

Hotel and airport employees have been among the hardest-hit tipped workers when it comes to this movement toward a cashless society. 

Think about it: there’s no immediate bill attached to many of these services, and no POS interaction — like when a valet assistant parks your car, a bellhop delivers bags to your room, a hotel maid makes your bed, a skycap handles your luggage, etc.

Sure, some folks might sprint to the ATM — but for the most part, if consumers don’t have cash on the spot, their service providers will lose out on a tip.

That’s why hotels, airports, and other service industry employers are enabling the acceptance of cashless tips. Two key benefits of cashless tipping for hotels and airports:

• A more seamless experience for consumers. The option to tip digitally allows hotel guests and travelers to easily tip when they want to, where they want to.
• Increased employee earnings. Cashless tip acceptance boosts your employees’ take-home pay — so they don’t have to suffer just because no one is carrying cash these days.
• Stronger employee performance. With the option to tip digitally, consumers aren’t limited by how much cash they have in their pockets. That means employees have the opportunity to earn larger tips, incentivizing them to provide top-notch service.
• Improved recruiting and retention. When your employees are fairly compensated — and have higher earning potential — it gives them a reason to stay with their current employer versus jumping around. Plus: they tend to be happier and feel respected by their employer, making for a stronger workplace culture. 

What are the downsides of cashless tipping? 

As mentioned above — one of the biggest hiccups that comes with the switch to cashless tipping is the tip payout process. When employers enable cashless tip acceptance, that means there’s essentially no cash on hand to pay out tips at the end of a shift.

Yes, cashless tipping is great for all of the reasons outlined above. But at the end of the day (literally), hospitality workers want instant access to their earnings. And you can’t put digital, cashless tips in your pocket. 

Some employers might put tips on payroll (making their people wait days or weeks for their earnings). Or they’ll consider pay cards — which unfortunately charge hidden fees or service charges that further reduce available tips for your staff. 

That’s why it’s critical that employers who enable cashless tipping also take take advantage of real-time digital tip payout software.

According to a recent PYMNTS.com survey, 83% of workers want access to earnings after every shift, and 80% prefer those funds get automatically streamed to their bank accounts. Instant, cashless tip payouts gives employers the ability to meet those demands.

Implementing cashless tip payout software

Kickfin is the largest enabler of real-time, cashless tip payouts. It can be used as a standalone software, or it can integrate with the rest of your hospitality tech stack — POS system, payroll software, etc.

Employers can get Kickfin up and running in one day. Once your restaurant or hotel signs up:

• Employees create an account and connect it to their existing bank account.
• Managers input the total tips at the end of a shift and automatically distribute them. 
• Funds appear in employee bank accounts immediately and are ready to use.

Kickfin makes tip distribution safe, seamless (and trackable!), whether you’re enabling tipping through your mobile app, your POS, or both.

Learn more about how Kickfin can help your restaurant, bar or hotel business — schedule a demo today!

How much money are you actually making at your restaurant? That’s exactly what a restaurant profit and loss statement can tell you.

Let’s break it down by one of the most common menu items in the United States: Pizza. Popular restaurant chain Domino’s charges $17.99 for a large (14”) pepperoni pizza in the Boston area. But Domino’s doesn’t make $17.99 on the pizza. Every pie costs money in ingredients (flour, cheese, sauce, spices, pepperoni), labor (the average MA Domino’s employee makes $16/hour), and packaging (pizza box).

What’s left over after all of those costs is the profit on that particular pizza. And that doesn’t even include fixed costs like rent on the kitchen space, utility and heating, appliances, and other overhead.

Answering the question of how much money you’re making as a restaurant owner can get complicated fast. But whether you’re using a team of accountants or managing the books yourself, you’ll need to put together a profit and loss statement (often shortened to the phrase “P&L”) to tell you just that. Here’s everything you need to know about creating and reading one:

What Is a Restaurant Profit and Loss Statement?

A profit and loss statement provides a record of a restaurant’s financial health by outlining revenue, costs, and expenses during a set period of time — usually over a fiscal year, but it can be more frequent depending on your management style or if you’re part of a public company. Another word for a profit and loss statement is an income statement, because it shows your overall restaurant income for the year.

Your profit and loss statement goes into detail for each revenue and expense to determine your net income, or profit. Here’s the basic equation:

• Profit = (Total Revenue + Gains) – (Total Expenses + Losses)

A good way to remember this is thinking back to the Domino’s example. At the end of a given pizza, how much of that $17.99 does the restaurant actually see? Profit is ultimately what your restaurant “pockets” at the end of the year after paying for restaurant space, food and beverage supplies, employee wages and tips, and other overhead, like linens, decor, or appliances.

Keeping up a regular P&L statement helps you assess your restaurant’s financial health so you know exactly what’s coming in and what’s coming out — so you can make sure your restaurant stays as profitable as possible.

How Often Should You Update Your Restaurant P&L Statement?

A P&L is one of the building blocks of your restaurant accounting and should be updated on a regular basis, though the exact timing is up to you. Because it’s a helpful snapshot of your restaurant’s financial health, many restaurant owners prepare one weekly or monthly. If you have multiple restaurants, you’ll want to create a profit and loss statement for each individual unit as well as your business as a whole.

Monitoring your P&L gives you insight into:

• Whether or not your restaurant is profitable — which can take time
• How to prioritize business decisions, like adding new menu items, changing suppliers, or hiring and staffing
• Where your “money makers” are on your menu
• Any inconsistencies or losses that don’t make sense, which is a sign of theft
• At a minimum, it should be prepared each quarter as part of your quarterly taxes.

Many point-of-sale systems automatically generate P&Ls on an ongoing basis so you can see an updated dashboard of your performance.

What is Included in a Profit and Loss Statement?

Restaurant owners create P&L statements in one of two accounting methods: Cash and accrual.

• The cash method is the simplest accounting method and focuses on money flowing in and money flowing out. Restaurants record transactions for every cover and record liabilities (expenses and losses) whenever bills come due.
• The accrual method records revenue as it is earned, rather than when cash is received. This method is more common for businesses that provide services or products, such as retail or software, where customers order in advance before receiving payment.

These two methods differ on the specifics included in your profit and loss statement, and how far in the future you record sales and expenses. Which method you choose is up to you (and may be worth chatting with an accountant about.)

In both methods, however, profit and loss statements include each element that makes up profit:

• Sales and revenues by category: Food, wine, liquor, merchandise, for example
• Costs of goods sold (COGS) by category: Typically, how much it costs for your ingredients.
• Labor: Wages, tips, and salaried employees
  Incidental operating expenses: The types of costs that fluctuate, like advertising, miscellaneous repairs, administrative expenses like credit card fees, utilities, live music, and so on
• Fixed costs: Monthly rent, insurance, and other overhead costs you cannot change or control
• Depreciation: Over time, your assets, like appliances and restaurant equipment, depreciate in value. Calculate this cost using this formula.

Subtracting the sum of all of your costs (labor, operating expenses, fixed costs) from your sales and revenues will give you net profit.

Note that profit typically is calculated before taxes. Many P&Ls include an “income before taxes” line and then a line to calculate your taxes afterwards.

How to Create a Restaurant P&L Statement

Now, it’s time to put all of those elements together. Here’s an example of what a P&L statement could look like for a restaurant. You’ll want to make sure you include the categories and costs most relevant to you, but you can start with this template.

This example below takes a high-level approach, but it’s worth creating a detailed examination of at least your expenses, if not your revenue by menu item, at least once every quarter.

When it comes to craft breweries, Andrew Coplon says great beer is table stakes.

And he knows a thing or two about the craft brewing industry: Andrew is the founder of Craft Beer Professionals and Secret Hopper — which means he spends his days helping brewers optimize their operations and increase their in-house revenues.

While top-notch brews might bring people into a brewery, Andrew says it’s the taproom experience that keeps people coming back.

So how do you turn first-time guests into die-hard fans? Andrew says there are three key factors that will create brand loyalty (and generate repeat business) among your taproom patrons. Read on for the full interview!

What is it about taprooms that people are drawn to?

It’s all about the connections you make there. For me personally, I love learning. So when I visit a taproom, I’m usually talking to the staff. I’m learning about them personally, and I’m also learning about the taproom — what’s the story, what were the goals, what are their values. And of course, I want them to teach me about the beers.

But it goes beyond the staff. Recently, my family and I were at a brewery in Northern Virginia. It was the first time we had done something like that since before the pandemic. While we were there, we were sitting with another family outdoors — we were talking about where we were from, how we both had toddlers. I completely forgot how much I enjoyed talking to strangers.

It’s so simple, but that’s what happens in these spaces. They bring people together.

What are the variables that can make or break the taproom experience?

There are really three key factors. I actually think about it like a Venn diagram.

Beer is the first circle. Atmosphere is the second circle. And then staff is the third circle. When you do all three of those things really well, you’re going to create the ultimate taproom experience.

So what does that look like in practice? How do you optimize all three factors?

Well, beer is a given. The beer has to be good. And that’s what will draw people in. Everyone’s there for the beer initially. But we’ve all been to taprooms where we’ve had a great beer, and we never come back. Great beer is a must, but it isn’t enough.

The atmosphere — it’s a lot of little things that come together. Lighting, music, food. What’s on the walls? Does the space tell a story, or does it just feel kind of cookie-cutter?

And then there’s the staff. What are they like? Are they just doing their job, or are they engaging the guests? Are they knowledgeable? Are they making and facilitating connections?

As an example: When I visited Perennial Artisan Ales in St. Louis, the person behind the bar was talking with me, sharing personal tidbits about herself. She told me she was in a band that toured around. It was a great conversation. A year later, I go back to the same taproom. I’ve got the same server. And she says, “Aren’t you the guy from Virginia?” A whole year later, she remembered who I was. 

That story also speaks to the importance of hiring and retaining the right people — which is incredibly challenging right now. Plus, it takes a more specialized skillset to manage a taproom. How are operators handling the tough labor market?

Staffing right now is very challenging within the craft brewing industry.

Bottom line: You have to know what your goals are. Is it important to hire someone who already knows a lot about beer? For some breweries, it might be. But in a lot of cases, you can find someone who literally just likes to talk to people — and then you can teach them everything else.

I have a friend who owns a taproom in Richmond, Virginia. When they closed during Covid, they lost almost all of their staff. They were having trouble hiring when they reopened. He ended up bringing on an out-of-work teacher. And pretty soon most of his staff ended up being former teachers. It worked so well — sure, they knew nothing about beer, but they knew how to educate people and break things down.

Basically, your employees don’t have to be the biggest beer nerds. They just need to be great with people and willing to learn.

So when an operator wants to address any of those three factors — beer, vibe, staff — how do you make sure everything still feels cohesive and true to your brand? 

Well, you really have to know your brand. And I often tell people — you should be able to explain or articulate the essence of your brand in about five words.

If you can’t: consider bringing your team team together, and have everyone collectively write down a handful of words that pertain to your values, or your vision for your brewery, or how you want to make people feel when they’re in your space. It could be random words, or you could turn it into an actual mission statement.

Lady Justice Brewing in Colorado has a great tagline — “Great beer. Better world.” That’s what they stand for, and every aspect of their taproom experience reflects that.

It’s important to find a way to differentiate your brand — with 9,000 breweries out there, differentiation is a must. And you need to get buy in from your staff. Get them involved in the process and excited about what you stand for. That way, they’ll feel personally invested in it, and they’ll embrace it.

What would you tell operators who don’t know where to start? What if you’re not sure what’s working and what needs to change?

A great way to learn more about the guest experience is by simply talking to your guests. Ask them questions. Also, visit other breweries. What are they like? How are you greeted when you walk in? Follow them on social media. See what they’re doing and learn from them.

To be honest, it can be hard when you’re in your own taproom day in, day out. It’s kind of a blur. You’re not thinking about all the little things.

That’s a big reason why we started Secret Hopper. It’s a secret shopping service for craft beer businesses. We send mystery shoppers into your brewery, and we analyze about 25 different components that contribute to the guest experience. So that gives you a baseline. We might discover engagement is low or staff members are doing things inconsistently.

Then we give you some actionable steps to improve those different components, and we’ll customize that plan based on your brewery’s specific needs. We also host workshops that address a lot of the challenges that craft breweries face.

Aside from generating repeat business, how does enhancing the guest experience impact a brewery’s bottom line?

Over the course of thousands of non-paid brewery visits, we’ve gathered some data points that really blow me away. For example, during about 45 percent of visits, guests aren’t encouraged to get a second drink. That’s crazy. When you simply ask your customers if they want another beer, the average tab is $6.50 higher.

We also discovered that brewery staff ask guests if they would like to purchase to go beer 18.6 percent of the time. When staff doesn’t ask this question, guests only purchase growlers 9 percent of the time, but when staff members do ask, guests purchase growlers 49 percent of the time. 

These are simple changes you can train your staff to make that can significantly increase your revenues.

What would you tell operators who might have the guest experience down pat, but for whatever reason, they’re having trouble getting people in the door?

Marketing is half the battle. You’ve got to make sure people know you’re there.

Get creative. Innovate. Look outside of your space — how are your favorite brands marketing themselves? Netflix, Starbucks — what’s working for them?

Don’t be afraid to ask for help. There are a lot of marketing agencies that specialize in craft beer. Or consider bringing someone on your team who has that skillset. They might cost more money, but if they do their job well, it’s a worthwhile investment.

 Do you own, operator or work for a craft brewery? Join the Craft Beer Professionals community on Facebook and connect with more than 14,000 beer pros for tips, networking and collaboration! 

For decades, tipping has been the domain of dine-in, full-service restaurants. In fact: tips make up the majority of earnings for front-of-house staff at most FSRs, thanks to the tip credit. 

But in a post-Covid world and a tough labor market, more and more quick- and counter-service restaurants are enabling tipping.

The QSR tipping trend has coincided with the proliferation of mobile apps. Panera Bread now asks if you want to add a tip to your order at checkout. At Starbucks, you can select denominations in $0.50, $1.00, or $2.00 increments within the Starbucks for iPhone app. And popular burger chain Sonic rolled out digital tipping to 2,000 locations across the U.S. in November 2021, bringing in $12.2 million in gratuities to their employees. 

Here’s why QSRs are enthusiastically embracing tipping, both in-store and through their mobile apps.

1. Stop the “wage wars”

52% of families of front-line fast food workers are enrolled in a public welfare program, and one in five live below the poverty line. With median pay across the U.S. for QSR workers at only $11/hour, and with varying shifts, it’s often not enough for workers to live on. That’s why since 2012, fast food workers have made a concerted push for higher wages in so-called “wage wars,” both through policy changes such as the “Fight for $15,” which successfully raised the minimum wage in New York City and by negotiating directly with restaurants. 

But as people in the business know, the realities of running a restaurant make increasing wages complicated. When quick- and counter-service restaurants enable tipping, they can significantly increase the earnings of hourly workers, far beyond what revenue constraints allow. 

Take The Human Bean, a national drive-through coffee franchise. When a Georgia-based franchisee enabled tipping and used Kickfin for instant, digital tip payouts, their employees’ take-home pay increased by an average of $4/hour.

2. Get the competitive edge on hiring

QSRs that jump on the tipping bandwagon now have a significant competitive advantage over other employers when it comes to hiring.

The nationwide labor shortage remains one of the most challenging aspects of restaurant management: 78% of restaurant employers told the National Restaurant Association that recruiting and retaining employees was their top challenge in the past year. With more than 1.7 million job openings across the United States in the leisure and hospitality sector, it’s more difficult than ever to find employees.