This is a subscriber-only article.

Get an annal subscription to Entrepreneur+ for $49 $32.83 during our
Memorial Day Sale

Use code SAVE33 at checkout.

Subscribe Now

Already have an account?

Sign in
Entrepreneur Plus - Short White
For Subscribers

Tipping Point: Is It Time to Rethink Gratuity in Restaurants? There's a growing movement to eliminate gratuities for servers. What does this mean for the restaurant world?

By Corie Brown

This story appears in the January 2016 issue of Entrepreneur. Subscribe »


American diners really give it to their servers. In New York City and Los Angeles, tips at independent eateries average 22 percent of the check, a big jump from a generation ago, when 15 percent was the norm, according to restaurateurs. Waiters and bartenders often earn more than $50 an hour.

And that has to stop, say a growing number of restaurant owners. Bottom-line necessity and common sense are uniting small family-owned cafes with the country's most expensive chef-owned dining rooms in a move to abolish tipping.

The restaurant industry is facing a sudden 15 to 18 percent increase in costs, says Kurt Huffman, owner of ChefStable in Portland, Ore., which has invested in 17 chef-owned restaurants and food businesses. The rise in the minimum wage, to $15 an hour in some states, and new laws requiring paid sick leave and healthcare coverage are sending restaurant food costs soaring.

The rest of this article is locked.

Join Entrepreneur+ today for access.

Subscribe Now

Already have an account? Sign In