Joe’s Crab Shack Is the First Major Chain to Test Out No-Tipping Policy

By Mike Pomranz |
FWX JOES TO END TIPPING

© David Kozlowski / Getty Images

If tip-free dining becomes the future of America’s restaurants, the change may play out this way: Danny Meyer was the brains, and Joe’s Crab Shack was the brawn.

Meyer made huge headlines when he announced last month he’d be switching his Union Square Hospitality Group to a no-tipping model. But that’s just 13 primarily high-end restaurants all located in New York City – and let’s be honest, what flies in NYC doesn’t always catch on in the rest of the country.

But recently, Ignite Restaurant Group announced they’ve been testing out new no-tipping procedures at 18 locations of their Joe’s Crab Shack chain. Though certainly not the biggest name in dining, Joe’s has about 130 locations in 32 states – a much larger number of restaurants that, more importantly, could introducing tip-free dining to a much larger array of patrons across the US.

“Servers, hosts, bartenders are paid now higher, fixed, hourly wages,” said CEO Raymond Blanchette during an earnings call, “and it’s expected to result in an improved team atmosphere, a significant reduction in turnover and greater financial security for the employees.” Restaurant Business pegged servers’ new hourly wage at $14 per hour. Blanchette also said that the price increases used to offset the new costs would be less than 20 percent, meaning that many customers may actually see the overall cost of their meals go down.

For now, letting customers off gratuity free is only a test, one intended to last at least until the end of the year. But if the plan proves successful and is eventually expanded, Joe’s Crab Shack could be the first full-service restaurant to bring no-tipping to the masses. It’d be a big move: Even bigger than adding crab nachos to their menu.

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