After three years of operation, Fry decided to eliminate tipping and instead offer workers a $35,000 base salary and health-care benefits. To help cover the costs, Fry adjusted menu prices and changed portion sizes. The restaurant also decreased its cost of goods to create higher profit margins.
Why: "For us, it was more about paying the front and back of house equally," said Fry.
The result: After six weeks of the new policy, Fry said the restaurant's sales are 26% above projections and that overhead costs have decreased to 27% from 40%.
