With the launch of Good Good Culture Club in San Francisco, Jeff Hanak and Ravi Kapur are betting that QR codes and a new 20% equity fee in lieu of tipping will help them put people over profits. 
Advertisement
Good Good Culture Club team
Credit: Courtesy of Good Good Culture Club

In March 2020, San Francisco restaurateurs Jeff Hanak and Ravi Kapur faced a fork-in-the road moment. There was no question they were going to shut down the party at their flagship restaurant Liholiho Yacht Club indefinitely because of the pandemic. But how, they wondered, could they change their business model to sustain their restaurant group for the long haul once diners returned?   

"The last thing we were going to do was flip the lights on, print menus, and go back to where it was," says Hanak. 

By the summer of 2020, many of their peers did just that, reopening with a Before Times lets-get-back-to-business mentality as the restaurant industry began to address long standing issues of race, gender, and equality in the workplace. Not surprisingly, finding experienced and motivated staff who were willing to work long hours for relatively low pay during a pandemic became the number one challenge for operators. By summer of 2021, a record number of workers had left the hospitality business, and the labor shortage persists today despite an industry-wide rise in hourly pay. 

Good Good Culture Club outdoor dining
Credit: Patricia Chang

Hanak and Kapur came up through the San Francisco dining scene at stalwarts like Nopa, where Hanak was a partner, and Boulevard and Prospect, where Kapur worked with Nancy Oakes. They opened Liholiho Yacht Club (Liho, for short) in 2014. Kapur earned a Food & Wine Best New Chef award in 2016, and the restaurant rode a wave of popularity fueled by its celebratory vibes and refined party food inspired by Kapur's Hawaiian heritage. It was consistently busy and profitable, the owners say, but they were already talking about staffing challenges before the first wave of COVID hit. 

"Prices were already going up, [the cost of] labor was going up, it was pushing us to a price point we didn't want to be at," Hanak says.

So the partners hunkered down with their senior management team and began to draft a roadmap for change. The result is a new restaurant called Good Good Culture Club that opened in Liho's temporary space on 18th Street earlier this month (they plan to reopen Liho this spring in its original location), and the name heralds a new team culture. Co-chefs Brett Shaw and Kevin Keovanpheng have steered the menu away from the Japanese, Chinese, and native Hawaiian influences of Liho, towards flavors inspired by Southeast Asia. You can order Keovanpheng's mom's Lao sausage or chicken wing with adobo glaze, a nod to the Philippines, via a QR code, one example of several new changes loyal customers to Liho will experience at the restaurant. 

Curious about the process that led to Good Good Culture Club, I spoke to several employees before the opening to better understand the changes they've made in the past two years. Here's what they shared.

Good Good Culture Club food
Credit: Patricia Chang

New Core Values

With Kapur and Hanak, Liho and Good Good's chefs and service managers rewrote the businesses' core values, which include "diversity, equity, and inclusion; growth mindset; care; and empowerment" and use them as their north star. "It all flows from there," Kapur says. Their next challenge? Figuring out how to put the team's and employees' welfare over profits in a notoriously fast-paced industry where margins typically hover in the range of 3-5%. 

A New Way of Recruiting

Starting last year at Liho, they pressure-tested a new hiring process that made referrals and resumes obsolete in favor of a questionnaire designed to eliminate unconscious bias and attract employees with all different levels of experience. One sample question on the application: "What brings you joy?" The  restaurant bucks standard industry practice by paying prospective employees for full day trials, aka stages. Word is catching on in the industry. More cooks have applied for jobs this month than in any time in the past 12 years, Kapur says. 

More QR Codes

The new service model doubles down on the use of QR codes, those now-ubiquitous matrix barcodes that you hover your phone over to pull up a menu. Aimee Arcilla, who directs service, oversees  the wine program, and spearheads recruitment and onboarding at Good Good, says the QR codes make training servers and getting food on the table easier. "It gives us the flexibility to be hospitality professionals as opposed to order takers," says Arcilla.

Good Good Culture Club cocktail
Credit: Joe Matty

No More Tipping

Before the pandemic, Kapur says, tipped bartenders at Liholiho made close to $100,000 working four nights a week. Servers earned somewhere in the $90,000 range. Meanwhile, line cooks earned in the low to mid $50,000s, a wage disparity between cooks and servers room and that is endemic to the industry. 

Last year, the team eliminated tipping in favor of a mandatory 20% "equity fee" that more restaurants are testing out due to the problematic history of tipping and the power imbalance it creates between server and customer. "[Tipping] leads to inequality, whether you're Asian, Black, female, or whatever," Arcilla says. "So we threw that out the window to create a level playing field in this restaurant. It's been very, very positive." 

Under the new model, cooks and servers now earn somewhere in the $60,000 to low $70,000 range. The owners took a pay cut. "We have to drink the Kool-Aid, too," Kapur says. "Not just everyone else. We're in this. We're committed to it. You can't do a rain dance and expect rain to come. You have to change." 

A New Vocabulary

Daily staff meal begin promptly at 3:45, followed by a pre-shift meeting at 4:20. On Saturdays, the staff go around the room to say what they are grateful for, and they use a new vocabulary. Front and back of the house are now dining room and kitchen. That slight language shift "can make a big impact in our day-to-day," says co-chef Brett Shaw. "We don't say the word lineup. That's like a prison roll call. We say 'pre-shift meeting.' We don't say dish pit; it's the dish station. These are dehumanizing words. It's another station, another role in the restaurant." 

Roxana "Nana" Guardia, the "heart and soul of the kitchen" has worked with Kapur for 18 years, and she says new changes have empowered her and her co-workers. 

"You can walk in and you feel that everybody is working together," Guardia says. "When we're at work together, we have a really good, honest time with each other. It matters that everybody feels comfortable and happy."

The owners acknowledge there are risks to these changes, and that their customers will decide the outcome.

"If it doesn't work, it may be the end, but that's part of the journey," Kapur says. "This is a defining moment. If we go down at least we went down with a fight." 

So far so good good, though, at least according to employees and the overwhelmingly positive comments on the restaurant's Yelp page, that imperfect aggregator of reviews and complaints by customers. "The moment a guest walks in, they can feel that this is a safe space," says Keovanpheng. "This is our home. It's not this Michelin star restaurant, where it's uptight. You're coming into our house and we want to welcome you."