Joes Crab Shack First Chain in NJ To Do Away With Tips
You can "eat at Joe's" but if you plan to have a meal at the popular seafood chain restaurant, don't worry about leaving a tip.
Joe's Crab Shack, which has seven locations in New Jersey, will be giving raises to its servers and in exchange, telling customers they're no longer expected to leave a tip following their meal.
But there is a downside: restaurants will be raising prices 12 to 15 percent to cover the wage increase for employees, Ray Blanchette, the CEO of Ignite, the restaurant's parent company, told investors last week.
"Servers will be paid a wage starting at $14 an hour, though the exact amount will vary from server to server on the basis of their past performance," Restaurant Business Online has reported.
Previously, servers earned an average of $2.13 per hour, without tips. Blanchette also told investors that setting a wage for employees might also help solve some of the chain restaurant's service problems. Typically, servers will resist having another waiter or waitress help them when large tables of customers come in, because they don't want to split the sizable tip, according to the Restaurant Business Online story.
The new wage model for servers is part of a test by the restaurant chain, that is expected to run through the rest of the year. Ignite Restaurant Group reported that the seafood chain's revenues fell to $114.8 million, from $122.2 million year over year for the third quarter.