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Author: Keely Hungate

The Ultimate Guide to Restaurant Tip Management

Posted on by Keely Hungate

Restaurant tip management can be confusing and time-consuming, especially if your restaurant has a large staff. Differences in state laws regarding employee wages and tipping, as well as the overall increase in credit card usage, further complicate how tips are shared with your employees.

If you own or run a restaurant, you’re responsible for creating an in-house tipping system that’s fair to both your front-of-house and back-of-house staff members — as well as your customers.

Read on to learn everything you need to know about managing tips in your restaurant — or click here to schedule a demo with our team to hear more about how Kickfin can help manage your restaurant’s tips.

Understanding tips and wages

Federal law requires that everyone employed in the U.S. be paid at least $7.25 per hour. Many states have minimum wages higher than the federally-mandated minimum. However, due to the long-standing practice of tipping, many states have instituted lower paid minimum wages for employees expected to supplement their income with tips. Paying a wage lower than $7.25 to tipped employees helps your business save money, but is not legal in every state and situation.

For example, according to the U.S. Department of Labor, it’s legal to pay tipped employees in Alabama as little as $2.13 per hour if the employee earns at least minimum wage by the time tips are factored in. However, in Washington, D.C., establishment owners must pay tipped employees a full wage of $8.00 per hour, regardless of tips earned. This wide variation makes it important to consult with a local employment lawyer versed in your state’s laws when establishing your restaurant’s tipping system.

What is a tipped minimum wage?

The federal minimum wage is $7.25 per hour, with many states implementing higher minimum wages. However, employers can pay employees who regularly receive tips a lower direct hourly wage, known as the tipped wage. A tipped wage is typically lower than the standard minimum wage and is set by law. The rationale behind these laws is that tips employees receive make up the difference between the rate the employer is paying and the minimum wage.

For the tipped minimum wage system to be valid, an employee must actually earn at least the state’s minimum wage after tips. Most businesses accomplish this by requesting that employees report tip earnings at the end of each shift. The business then adds together the total amount of money the employee has earned in tips versus an hourly wage and divides this figure by the number of hours the employee has worked. If this calculation reveals that the employee did not earn minimum wage, the employer must supplement their income.

What is a tip credit?

A tip credit is the extra money an employer must pay to an employee to make up the difference between the tipped wage and the state’s minimum wage.

Let’s take a look at an example of a situation where an employer might need to supplement a tipped minimum wage. Imagine you manage a restaurant in a state where the tipped minimum wage is $5 an hour and the standard minimum wage is $10 per hour. After working a 40-hour week, one of your employees reports a total tip-out of $180.

However, if your state has a minimum wage of $10 per hour, this means that any of your employees who work at least 40 hours must receive at least $400 in total compensation ($10 per hour). If an employee only earns $380 between wages in tips, you would need to make up the difference by including an extra $20 tip credit in the employee’s check.

If the employee earns more than minimum wage when calculating tips plus wages, no action is taken. For example, you can’t reduce an employee’s wages to $0 if they earn more than minimum wage in tips alone.

How to collect tips

There are a variety of ways your restaurant can accept tips from customers. Some of the most common ways to collect tips include:

  • Cash: Cash is the most straightforward way to accept tips. Each employee may keep the cash they collect on each check, or pool tips together to split among the staff.
  • Credit cards: Many customers prefer to put their tips on the credit card they use to pay for their meals. Accepting tips via credit card is convenient for customers, but will require calculation via your in-house system to pay them out correctly.
  • Third-party payment apps: Some establishments ask individual employees to create payment accounts with third-party payment apps, like Venmo and CashApp.

Employees are allowed to independently collect tips with their user codes. These tips are usually treated as cash for reporting purposes, making this method unsuitable for establishments that pool tips.

Many modern point of sale (POS) systems or terminals used in restaurants have the functionality to suggest tip amounts to customers during the payment process. If using these systems, ensure your tip recording and reporting system complies with local regulations.

How do you combine cash and charged tips?

If your restaurant receives both cash and charged tips, it’s essential to have a clear process in place to handle and distribute them appropriately. This requires keeping a careful record of all tips received — regardless of whether they’re in cash or on a credit card. Most POS systems include a mechanism to collect this information automatically as it’s entered, but you may want to keep an additional backup record.

Store cash tips securely and separately from other funds to ensure accurate accounting and distribution. Establish a process where employees can safely deposit their cash tips in designated envelopes or containers, and have a standing protocol around who can access funds and how. It can be helpful to keep cash tips locked in a manager’s office until distribution.

There are a few options for disbursing credit card tips to employees. You can pay out credit card tips in cash to employees at the end of the day, but this requires taking credit card tips from the restaurant’s cash reserves, which may be limited during slow seasons. You can also include credit card tips on each employee’s wage check.

However, this strategy may require spending more resources on accounting and billing to ensure all employees are fully compensated.

And, keep in mind: Many hospitality employees are drawn to the industry because of the promise of daily payouts. Putting tips on payroll can be hard on your staff, especially if they’re accustomed to nightly tip-outs and have to start waiting days or weeks to receive their tip earnings.

A cashless tip distribution solution can be a helpful tool in streamlining and simplifying the process of distributing tips, especially when combining cash and charged tips. With a cashless solution, charged tips can be directly deposited into individual employee accounts or a centralized tip pool, reducing the need for manual handling of cash or checks. This also reduces the chances of making a costly mistake when distributing employee tips and calculating wages.

Ways to distribute tips to your employees

“Tipping out” refers to the service industry practice where employees who receive tips share a portion of those earnings with other employees who provide a service or support role during the customer’s experience. For example, while servers might directly receive tips, house rules might establish that servers tip out a small percentage of the tips they collect to the back-of-house staff or hosts who do not collect tips.

Not every establishment tips out, with some electing to pay higher wages to non-tipped employees. These are some of the most common tip division and redistribution strategies to consider for your restaurant:

Individual employee tips

The easiest method to handle tips is to allow each employee to keep the tips that they individually earn. Only tipped-wage employees are required to earn tips, so this method empowers those interacting directly with customers to keep the tips that they collect. However, this method benefits only individual tipped employees and may lead to uneven earnings across your staff.

Tip pooling

Tip pooling is a practice common in the service industry where a portion of the tips received by employees is combined into a common pool and then distributed among a group of eligible employees. Rather than keeping individual tips, employees contribute a portion of their earnings to be shared among the team.

 

Typically, a predetermined percentage or formula is used to allocate the pooled tips among the eligible employees. This is usually based on employee roles and contributions to the overall customer service experience. Some establishments tip out the same percentage to all employees, while others devote a larger percentage to the individuals collecting the tips.

The purpose of tip pooling is to foster teamwork, incentivize collaboration, and ensure all employees involved in providing excellent service receive a fair share of the tips — even if they don’t directly interact with customers or receive individual tips.

However, tip pooling may also foster contempt amongst employees, particularly if employees earning minimum wages receive the same percentage of tips as tipped-wage employees. That’s why it’s important to weigh the pros and cons for your team, ensure your policy is fully compliant with tip pooling laws, and create a culture of communication and feedback channels so you can understand what’s working and what’s not.

Percentage-based tip-outs

Percentage-based tip-outs involve distributing a specific percentage of the total tips earned by an employee to other individuals or groups. By dividing tips by varying percentages, management can ensure that tipped employees receive a larger percentage of their tips while also keeping things fair for non-tipped employees crucial to the customer experience.

For example, let’s say your restaurant has a 20% tip-out policy and a server earns a $100 tip. In this case, the employee will be required to distribute 20% of their tip ($20) to non-tipped employees. Depending on your restaurant, this may include hosts, prep cooks, bussers, and other qualifying employees. The remaining 80% of the server’s tip ($80) is theirs to keep.

Point system tip-outs

Some establishments use a points-based tip-out system. In a points-based tipping system, rather than distributing a percentage of the total tips, a certain number of points are allocated to each employee, and these points are used to distribute the tips among the team.

Let’s take a look at another example using a $100 tip. If your restaurant uses a point system, you might assign a server 50 points, a bartender 30 points, and a busser 20 points. In this example, points correlate to percentages, so a server would keep $50 of the tip. Accordingly, the bartender would receive $30, while the busser receives $20.

Points-based tipping systems allow for a more customized and flexible distribution of tips, considering the different roles and contributions of the employees. The allocation of points can be based on factors such as seniority, job responsibilities, or performance evaluations, enabling a more nuanced approach to distributing tips among the team.

Tax and reporting obligations

The IRS has specific regulations regarding tip reporting, withholding, and taxation. Failing to comply with these requirements can result in legal and financial consequences.

As a business owner, it’s crucial that you take steps to keep tips and payouts in order. Following these tips can help you stay on the right side of the law:

  • Keep accurate records: Keep detailed records of all tip income, including cash and charged tips. Document tip allocations, distribute tips promptly, and maintain accurate records of tip pools and distributions. This documentation will be valuable in case of audits or employee inquiries.
  • Implement clear and consistent policies: Establish written policies on tip reporting, allocation, and distribution. Ensure employees understand these policies and provide regular reminders or training sessions to reinforce compliance. This will help prevent disputes with employees, especially those collecting tips.
  • Educate employees on their responsibilities: Train your staff on the IRS requirements for tip reporting and explain the importance of accurate record-keeping and reporting. Encourage employees to report their tip income correctly and provide them with resources or guidelines to do so.

Remember that as the business owner, the responsibility to maintain financial records falls on your shoulders. This is one area where a cashless tip management system can be majorly beneficial.

How software makes restaurant tip management easier

Even the most organized business owners can find themselves confused when managing dozens of tipped employees. Software, including tax reporting software and POS management systems, can make the process of tracking payouts and income easier. In particular, a cashless tip management system can provide a host of benefits to employers and employees themselves.

Enhanced accuracy and transparency: Cashless systems provide accurate tracking and recording of tip transactions. This helps ensure that tips are distributed correctly and transparently and minimizes the risk of human error that can lead to lawsuits and claims of improper employee payments.

More convenient for employees: Cashless tip distribution allows employees to receive their tips directly in their bank accounts or digital wallets, offering flexibility and convenience. With a growing consumer trend toward digital payments, some employees prefer the ease of non-cash payouts.

Increased efficiency: Cashless systems streamline tip distribution. Instead of manually handling cash, the system automates the process, saving time and reducing administrative burdens. Employees also don’t need to worry about the risk of loss and theft that comes with carrying cash.

How Kickfin helps with restaurant tip management

Kickfin really helps restaurant managers with facilitating the cashless disbursement of tips to eligible employees. Fewer and fewer customers pay for transactions with cash — which is why so many managers find themselves running to the bank on a daily or weekly basis because the safe is empty, and there’s not enough cash to pay out tips.

With Kickfin, you’re able to track your tipped employees’ earnings through your normal POS, and quickly total their tipped earnings at the ends of their shifts. Then, with the touch of a button, you can distribute their tips to them electronically, without having to count cash or stuff envelopes. And your employees’ tips hit their accounts instantly.

Click here to learn more about Kickfin and how our cashless tipping solution can work for you

[WEBINAR] A Tip Pooling “Deep Dive” with Restaurant Strategy Podcast Host Chip Klose

Posted on by Keely Hungate

Tip pooling can have big benefits for your entire team…but landmines abound.

Don’t just take our word for it: a quick Google News search for “tip pools” will return countless stories detailing costly lawsuits against operators who were — sometimes unknowingly — running illegal tip pools.

Of course, if you’re going to pool or share tips in your restaurant, compliance is only one (albeit very important) consideration.

It’s also critical to choose the best structure for your restaurant based on a variety of factors — including your restaurant type, team size and local market. And then there’s the rollout: Properly communicating the policy to your team and soliciting feedback can go a very long way in ensuring the success of your tip pool.

>>> DOWNLOAD OUR FREE TIP POOLING CALCULATOR TEMPLATES <<< 

If you’re considering instituting a tip pool or tip share — or if you want to evaluate your current tip distribution program — check out our recent webinar moderated by Restaurant Strategy Podcast host Chip Klose and featuring Justin Roberts (co-CEO, Kickfin); Larisa Thomas (VP Operations, Kickfin); Beth Schroeder (Partner, Raines Feldman LLP).

Watch the recording below to hear the panelists cover the ins and outs of tip pooling, including:

  • Pros and cons of running a tip pool
  • The most common types of tip pool structures
  • Tip pooling myths and misconceptions
  • Avoiding costly tip pooling compliance mistakes
  • Best practices for launching or updating a tip pool policy

The Hidden Costs of Tipping Out in Cash

Posted on by Keely Hungate

Roughly 4-in-10 Americans say they aren’t using cash in a typical week, according to a recent report from Pew. But even as we creep toward a cashless economy, a large chunk of the hospitality industry is holding fast to cash — at least, when it comes to tip distribution.

Most of the restaurants, bars and hotels groups that continue tipping out in cash do so because it’s “the way they’ve always done it.”

And if you’re in that camp? We get it. Sticking with the status quo can feel like the path of least resistance. (Which counts for a lot these days.)

Plus: Paying out in cash daily also helps with recruitment and retention: hospitality employees expect and deserve to get paid in real-time. Meeting that need is critical in the face of an ongoing labor crisis, when restaurants and bars are competing for talent with other establishments and gig economy employers (hi, Uber and DoorDash).

But the reality is that cash distributions aren’t the only way to tip out in real time. And they actually come with a whole host of hidden (unnecessary!) costs that could be putting a major dent in your bottom line. 

Don’t take our word for it: here are seven ways that your business may be “paying” for cash tips.

1. Managers get pulled off the floor

Managers already have a lot on their plate — helping out on the floor, checking in with guests (and smoothing over any issues), or even working the line in the kitchen. They step in where they’re needed, but distributing cash tips is an unnecessary task that takes them away from work that really matters. In fact, the whole process can consume 10+ hours of their week, every week.

Cash tip-outs take so much time because more customers are paying with credit cards or digital payments. As a result, restaurants simply don’t have cash on hand to pay out server tips at the end of each shift. 

That means:

  • Many managers find themselves making frequent bank runs — sometimes every day.
  • Once cash is in hand, they’re tasked with calculating tip pools and counting cash. It’s a tedious job for anyone, but for a run-down manager who’s trying to keep their eyes open while they’re closing out at 2 a.m.? It’s the worst.
  • Not only is it tedious: cash tip distribution keeps them chained to the back office when they could be out on the floor, doing what they do best.
  • If employees come to pick up their tips from the night before, the managers are once again pulled off the floor to ensure everyone gets what they’re owed.

2. Unnecessary labor costs

If you’re still paying out cash tips, your labor costs are likely higher than they need to be.

Sure, your managers might be salaried — but at many restaurants, hourly employees will be waiting on the clock for their manager to pay out their tips since both the employer and employee need to be physically present when currency is exchanged. 

To quantify this, pick a state…how about Colorado where the server minimum wage is $10.63?  If a Colorado restaurateur has 10 employees waiting together on the clock for 15 minutes, that’s 150 minutes of unnecessary compounded labor or $26.58/day – about almost $800/month.

(Of course: managers could send employees home to save “on clock time.” But that means they’ll have the inconvenience of either waiting until their next shift to get their payout, or trekking back to work on a day off — which comes with added gas money or public transit costs —to complete the envelope pass.)

3. Employee theft

You work hard to hire the right employees: people you can trust. You ask the right questions, check all their references, run the background checks.

You can do everything right, but employee theft still happens. An estimated $3-6 billion of revenue is lost annually as a result. 

Does it mean your employees are bad people? Not necessarily. But tough personal times — or pure temptation — can lead good people to make bad professional choices and justify illegal behavior. Reducing or eliminating cash held on premises for tipping out mitigates the risk (and temptation) of both minor skimming and major theft.

4. Human error

Even if your employees don’t intend to skim from tips, counting errors happen. After a particularly exhausting Saturday night shift, your managers are often sitting there counting cash for so long that they start to feel cross-eyed — and they’re bound to slip up from time to time. Even if you just misplace $5 every other day, you could be losing nearly $1,000 every year.

And if a mistake is made, there’s no record of it. Once the cash is gone from your restaurant, you have no way to recuperate it.

5. The ABCs of fees 

Accounting fees – Cash tip reconciliation and accounting for last-minute bank cash orders is time-consuming. Your bookkeeping firm will bill for the additional hours needed to accomplish these tasks. If you’re also at the helm of a multi-location establishment, you’ll need to plan for the reporting delays and additional costs involved in requesting payroll reports from each location.  

Bank fees – As many banks outsource their vaulting to cash management companies, they roll a piece of their cost for this service down to their customers in the form of a fee for local cash pick up. Combine this particular fee with a massive liability issue: anything could happen while your GM is off premise to courier the cash, including theft or robbery. And of course, bank runs take up on-the-clock time that your GM could be spending managing the business.

Cash in transit fees – Choosing to use an armored car service to deliver cash is common practice for high-volume locations. However, it comes with both a fee for delivery and for the cash itself. Those can range from $250 – $400 per week.

6. Rounding up (and down)

Some employers use a time-rounding policy that can result in shortchanging employees on wages they were scheduled to earn. 

Other employers round up or down to the nearest dollar to make the cash counting process easier — which either inflates the tip outs or withholds money that is supposed to be payable to the employee. The rationale used in both cases is that eventually it all evens out. 

But beware the security risk you’re inviting here. Employees can claim that you are underpaying them for their time and/or their tips since it’s not an accurate disbursement each night. And for the teams that consistently round up: those quarter

7. Employee safety and financial wellness

Restaurateurs also often feel responsible for their employees in ways that don’t apply in other work environments. You spend a lot of time together, and it starts to feel like a family. 

As the head of that family, you can make choices to further promote employee safety. For example, employees feel safer and more secure leaving at night without cash in their pockets. They also report that tipping out in something other than cash means they tend to spend less of their tips on frivolous things.

Digital tipping cuts the costs of cash

Yes, cash tip outs are slow, risky and costly — but for years, it was the only way to give employees instant access to their earnings.

That’s changing fast, thanks to the advent of digital tipping. No longer is cash tip distribution a necessary evil.

Innovative, easy-to-use technologies present safer, more efficient alternatives to tipping out in cash. They can make a standard process easier for you and your team, decrease liability, and eliminate other hidden costs to your business. The best part: it’s easy to use and a breeze to implement. 

(Want to see digital tipping in action? Request a personalized Kickfin demo today!)

Electronic Transactions Association Recognizes Kickfin as Top 10 ISV

Posted on by Keely Hungate

AUSTIN, Texas (February 21, 2023) — The Electronic Transactions Association (ETA) today announced that Kickfin has been named a Top 10 Payments Independent Software Vendor (ISV).

ETA launched this award in 2023 to recognize ISVs that are offering disruptive software solutions, making a recognizable impact, and driving the payments industry forward. 

“The hospitality workforce truly makes the world go around. We built Kickfin because we wanted to change the way those front-line employees are paid, for the better,” said Kickfin co-founder Justin Roberts. “Electronic Transactions Association’s recognition of Kickfin underscores our leading position in the digital tipping category and is a meaningful validation of our mission to reimagine employee payments.”

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.

Untitled design - 2021-04-29T114014.973

ETA’s recognition of Kickfin underscores our leading position in the digital tipping category and is a meaningful validation of our mission to reimagine employee payments.

To be considered for the ETA Top 10 award, candidates had to be ISVs that are “integrating payments solutions that disrupt the industry and drive payments forward.” Software solutions were judged on whether they add significant value to the organizations that use them, and whether they deepen the relationship between the user and the chosen platform.

Additionally, winning ISVs needed to demonstrate:

  • Enhanced user experience
  • Improved payments security and PCI DSS Compliance
  • A quicker, more efficient payments process for merchants
  • Increased revenue generation and stickiness

Kickfin will accept its Top 10 Payments ISV award at TRANSACT, ETA’s annual convention, April 24-26 in Atlanta.

To learn more about Kickfin’s digital tipping software, visit kickfin.com/demo.

US Foods Adds Kickfin to Innovative Partnerships Program

Posted on by Keely Hungate

We’re kicking off 2023 with some big news: US Foods Holding Corp. (NYSE: USFD), one of America’s largest foodservice distributors, has announced the addition of Kickfin to its US Foods Innovative Partnerships incubator program.

The program was designed to help US Foods find the most innovative and proven technology solutions for their customers. Potential technology solutions are selected to participate in regional customer engagement events to demonstrate the solution and gauge operator interest and viability.

Following a successful introduction, Kickfin will be eligible to be activated nationally within the CHECK Business Tools program.

Untitled design - 2021-04-29T114014.973

Joining the US Foods incubator program means we’ll be able to help even more restaurants solve for cash shortages, uncover new operational efficiencies and foster the financial wellbeing of their employees.”

“Restaurant teams are feeling the pain of old-school tip-out processes — which is why demand for digital tipping is at an all-time high,” said Kickfin cofounder Brian Hassan. “Kickfin enables thousands of hospitality employers to send instant, cashless tip payouts, directly to their employees’ bank of choice, at the end of every shift. Joining the US Foods incubator program means we’ll be able to help even more restaurants solve for cash shortages, uncover new operational efficiencies and foster the financial wellbeing of their employees.”

For more information about how US Foods is helping customers “Make It” through CHECK Business Tools, visit usfoods.com/our-services/check. View the full press release here. 

About US Foods

With a promise to help its customers Make It, US Foods is one of America’s great food companies and a leading foodservice distributor, partnering with approximately 250,000 restaurants and foodservice operators to help their businesses succeed. With 70 broadline locations and more than 80 cash and carry stores, US Foods and its 28,000 associates provides its customers with a broad and innovative food offering and a comprehensive suite of e-commerce, technology and business solutions. 

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

Posted on by Keely Hungate

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.

Kickfin Co-CEO Brian Hassan Featured on Forktales Podcast

Posted on by 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.

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

[Webinar] Building a Compliant Onboarding Program for New Restaurant Hires

Posted on by Keely Hungate

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!

 

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

Kickfin Closes Series A to Fuel Growth Across the Hospitality Industry

Posted on by Keely Hungate

Yes, we closed our Series A — and we’re really excited about it. But before we dig into the big news, we want to provide a little context…

Kickfin was founded to solve a really big problem for hospitality. A problem that, until very recently, most employers considered a necessary evil. 

Cash tip payouts just don’t work for hospitality teams — at least, not anymore. It’s the ultimate square peg in a round hole: Restaurants have automated everything else, yet over 90% of outlets have continued to pay out cash tips. Back when Kickfin was just an idea, operators often told us, “This is just how we’ve always done it. It’s hard, but there isn’t a better way.”

So: we built a better way. 

Over the past few years, we’ve helped thousands of restaurant teams hit the reset button on cash tip payouts — offering them a simple, seamless way to digitize the most analog aspect of their operations.

And while we love uncovering new efficiencies and removing operational burdens (who doesn’t?) — the most meaningful part of our work has been seeing how Kickfin makes life easier for service industry workers across the country. Those frontline, essential employees need and deserve real-time, unfettered access to their earnings — and with Kickfin, that’s exactly what they get.

Closing our Series A is an incredible milestone for Kickfin. It’s certainly taken a lot of hard work to get here, and we’re proud of what our team has accomplished. 

But mostly, we’re excited about what this means for our current and future customers, and for our industry as a whole. Through our partnership with Silverton Partners and Acronym Venture Capital, we’ve got the platform and firepower we need to reach new markets, innovate like never before, and truly change the way hospitality pays their employees, for the better.

Bottom line: We’ve come a long way, but we’re just getting started — and we’re grateful to every customer, partner, and employee for coming along for the ride. 

Brian & Justin

Kickfin Co-Founders

Kickfin, the Leading Gratuity Management Software, Closes $6M Series A to Fuel Growth Across the Hospitality Industry

AUSTIN, Texas (June 23, 2022) — Kickfin, the leading gratuity management software for hospitality, today announced it has secured its Series A funding to further accelerate the company’s rapid growth.

Silverton Partners led the round, with participation from Acronym Venture Capital—following a seed round led by Loomis U.S.—which brings Kickfin’s total funding to $11 million.

“The explosive growth we’ve achieved is a testament to hospitality’s need and desire to remove cash from the tipping process,” said Justin Roberts, Kickfin co-founder. “In partnership with our investors, Kickfin will continue on its path to becoming the new status quo for tip distribution,” said co-founder Brian Hassan.

“Kickfin is the ultimate win-win solution: It removes costly inefficiencies for employers, while ensuring frontline hospitality workers get paid the way they want to get paid. We’re thrilled to partner with Kickfin and provide a platform for growth as they continue to revolutionize employee payments in this space,” said Roger Chen, General Partner at Silverton Partners.

Launched in 2017, Kickfin eliminates the operational burdens of cash tipping for every type of hospitality outlet, while fostering the financial security of employees. Brands like Marco’s Pizza, Twin Peaks, Melting Pot and Walk-On’s Sports Bistreaux use Kickfin to send real-time, cashless tip payouts directly to their employees’ bank of choice, 24/7, 365.

In the past year, Kickfin has experienced exponential growth across the full-service, fast casual and quick-service hospitality segments. According to data provided by Visa, Kickfin ranked number one in transaction count and volume for tip disbursements in 2021. Kickfin’s customers span every type of outlet, including fine dining, cafes and coffee shops, pizza and delivery, hotels, stadiums, event venues, airport concessions and country clubs.

By digitizing tip payouts and distributing them in real time, employers can eliminate bank runs, reduce theft and human error, and streamline reporting—all while increasing employee satisfaction. Kickfin’s technology also ensures organizations remain compliant with complicated, ever-changing tip pooling regulations, and it integrates with existing POS and payroll systems.

“Cashless transactions have created new challenges for hospitality businesses,” said Joshua B. Siegel, General Partner of Acronym Venture Capital. “With Kickin, we saw a solution that greatly reduces expenses, eliminates a critical pain point for management, and gives workers real-time access to daily tip earnings—a significant portion of their earnings—while eliminating hidden and predatory fees. We are excited to back Brian and Justin as they continue to build Kickfin to increase frontline worker’s take-home pay.”

 

For media inquiries, please contact:

Keely Hungate
VP Marketing, Kickfin
423.802.3662
keely@kickfin.com

 

ABOUT KICKFIN

Kickfin is the leading gratuity management software. Restaurant and hospitality brands across the country use Kickfin to tip out employees in real-time, directly to their bank accounts — no cash required. Solve for cash shortages, reduce the risk of theft and human error, and recruit more workers by giving your team immediate access to their tips. Visit kickfin.com/demo to learn more.

ABOUT SILVERTON PARTNERS

Silverton Partners is focused on funding and mentoring early-stage businesses led by founders who share in its commitment to disrupt growth markets and build enduring companies. Founded in 2006, the firm brings the benefits of its vast network and decades of rich experience to each partnership. Austin-based Silverton is the most active venture capital investor in Texas and has been the initial investor behind visionary companies including AlertMedia, Billie, WP Engine, SailPoint, Silicon Labs, Storable, Vacasa, Self Financial, Wheel, and The Zebra. For more information, visit www.silvertonpartners.com.

ABOUT ACRONYM VENTURE CAPITAL

Acronym Venture Capital invests in technology and omni-channel consumer companies that have achieved at least $1m in ARR across Late Seed and Series A rounds of financing. Acronym seeks to invest in startups that focus on sustainable growth in sectors where we can leverage our network to assist with revenue-generating relationships. For more information, visit www.acronymvc.com.

Visa Direct Partners With Kickfin for Real-Time Tip Payouts

Posted on by Keely Hungate

Big news: Visa and Kickfin are teaming up!

Kickfin has been validated as the largest tip disbursement enabler in the U.S. — so it only makes sense that we’d partner with Visa, the world leader in digital payments.

As our customers know well, the combined technology of Kickfin and Visa Direct enables hospitality employers to send real-time, cashless tip payouts directly to their employees’ bank of choice.

That means everyone — from nationwide, enterprise brands to franchisees to mom-and-pops — can enable a secure, compliant (and cashless!) tipping program that gives your people exactly what they want. 

Simply put: Kickfin’s collaboration with Visa Direct is a testament to the need for cashless tipping — and the impact that real-time tip payouts can have on front-line, essential service workers across the country.

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!)

Kickfin Partners with Visa to Enable Real-Time Tip Payouts for Restaurants, Bars and Hotels

With Kickfin and Visa Direct, employers can distribute real-time*, cashless tip payouts directly to their employees’ bank accounts.

AUSTIN, May 12, 2022 /PRNewswire/ — Kickfin, the largest tip disbursement enabler in the U.S., today announced its official collaboration with Visa, the world leader in digital payments. Leveraging the combined technology of Kickfin and Visa Direct** — Visa’s real-time money movement network — service industry employers can send cashless tip payouts directly to their employees’ existing bank accounts via eligible debit cards, 24/7/365.

Kickfin is the leading gratuity management platform for hospitality. National brands in the full-service, quick-service and fast-casual segments use Kickfin’s digital tipping solution to improve recruiting and retention and help reduce operational challenges related to cash management.

With Kickfin and Visa Direct, employers distribute real-time, cashless tip payouts directly to their employees’ bank accounts

Historically part of the full-service restaurant and hotel culture, tip programs are increasingly leveraged by quick-service restaurants as a means to increase employees’ take-home earnings. However, the rise of credit card and digital transactions has made it difficult to pay out tips in cash at the end of every shift.

By digitizing tip payouts and distributing them in real time, directly to their employees’ bank accounts, employers can reduce bank runs, reduce theft and human error, and streamline reporting — while increasing employee satisfaction. Kickfin’s technology also ensures organizations remain compliant with complicated, ever-changing tip pooling regulations, and it integrates with existing POS and payroll systems.

“The hospitality workforce consists of frontline, essential employees. They need, deserve and quite frankly expect immediate access to their earnings,” said Justin Roberts, co-CEO of Kickfin. “When employers offer real-time, cashless tip payouts, the message is clear: they care about the financial well-being of their employees. Kickfin provides a long-term, sustainable solution for the operational, recruiting and compliance needs of the modern hospitality employer, and we’re excited to see how our collaboration with Visa will continue to transform the industry for the better.”

“We live in a world with expectations of immediacy and convenience, necessitating the need for a global money movement network that is nonstop,” said Yanilsa Gonzalez-Ore, SVP, North America Head of Visa Direct. “With Visa Direct, we’re helping transform the next generation of global money movement and are excited to help bring fast, digitized tip disbursements to Kickfin’s clients in the U.S.”

ABOUT KICKFIN
Kickfin is the leading gratuity management software. Restaurant and hospitality brands across the country use Kickfin to tip out employees in real-time, directly to their bank accounts — no cash required. Solve for cash shortages, reduce the risk of theft and human error, and recruit more workers by giving your team immediate access to their tips. Visit kickfin.com/visa-payouts to schedule a free demo today.

* Actual fund availability depends on receiving financial institution and region
** Visa Direct capability enabled through Kickfin’s financial institution partner