r/mildlyinteresting Nov 19 '22

Olive Garden gave me a daily sales report instead of a receipt Quality Post

Post image
86.0k Upvotes

3.3k comments sorted by

View all comments

Show parent comments

1.3k

u/[deleted] Nov 19 '22

So they made $13k gross in two thirds of one day, and only paid $1800 for labor? I want to see the cost breakdown on the wholesale prices they’re paying for the food/drinks. And the rent bill.

This sounds like they’re robbing the staff.

220

u/[deleted] Nov 19 '22

Darden made about 12% profit from sales last year. So about what you’d expect for most businesses.

→ More replies (89)

507

u/CowFu Nov 19 '22

Food margins vary wildly, but usually you'll see 30% markup on cost. So before all other costs they made $3,900. -$1800 for labor you have $2,100 for the day. Olive gardens are usually pretty big, rent, utilities, insurance, franchise fees and taxes will take a pretty large chunk of that.

I'm not saying they're paying enough, I'm saying you can't look at gross revenue and pretend you have a good picture of how much money the restaurant made.

93

u/Disastrous_Elk_6375 Nov 19 '22

Food margins vary wildly, but usually you'll see 30% markup on cost.

Huh, I was taught that the "golden" ratio in restaurants is 1/3 food cost, 1/3 venue & labor cost and 1/3 corporate, business exp (marketing and what not) and profits. Is that outdated info?

105

u/Terrible_Safety_7536 Nov 19 '22

30,30,30 seems to be a benchmark. 10 in profit

64

u/TheHiveminder Nov 19 '22

Last earnings report for Darden: 12%, pretty close on the money.

30

u/chrunchy Nov 19 '22

I would say that's probably a formula for a single proprietor, and "10 profit" is more shorthand for "10 gross". If you followed the 30303010 guideline there's no chance to create a 12% profit margin for the corporation, unless the restaurants are franchised and they're overcharging for branded materials.

Most companies tend to have a 10% profit on revenue and that seems to be true across multiple industeies - so if a guy says his privately owned company does 15 mil in sales he's probably walking away with 1.5 mil give or take before personal taxes. But I digress..

For corporations the only number that matters is the 10 at the end. They want to take the first three 30's and push those down while making the 10 higher.

For overhead they lower that by buying and building instead of renting, and depreciating that expense over years, furnishings are bought in bulk at discounted prices as is kitchen equipment, improvements like switching to led lighting etc.

For food costs they bring that down by bulk buying for the entire chain direct from massive food wholesalers. There's also the temptation to buy the patty with preservatives because it's $0.10 per patty cheaper but they buy so much it actually gives them a 0.01% profit bump.

When it comes to the labour part, prepackaged food and simple recipes mean they don't need much more than fast food workers in the kitchen and you can minimize professional culinary staff. They reinforce tipping culture to keep wages low, and they most likely lobby governments to ensure that there is a separate wage for serving staff whenever questions about raising the minimum wage arise. They also are more willing to hire newcomers and train them as experience costs money.

All of this means probably the ratio is more like 25/25/20/30 at the restaurant level and that 30 gets sent to corporate (assuming they're not franchised) where they have additional expenses including branding, advertising, menu r&d, etc. and then the machine shits out a final number of 12%.

13

u/PurpleHooloovoo Nov 19 '22

This is the formula for franchised places, and it's why franchise fees are high. They're the ones negotiating the supply contracts, researching the most profit-maximizing option, lobbying the government, hiring the graphic designers, paying the ad firms, etc on behalf of the individual location proprietor. For all that, they have to pay the franchise fee and follow protocol/standards, but all the hard decisions are already made. Risks are reduced.

It's why chain restaurants are all so consistent, but also so blah. They don't need anything specialized or highly skilled (like an executive chef) because it's mostly bagged soups and boiling pasta and frozen lasagna. Even your local Chinese or TexMex joint (probably) has a cook in the back actually following recipes and making the food with cooking techniques beyond "heat, plate" or "boil until timer bings, add ladle of sauce, plate". Nothing wrong with a Chili's night or whatever, but it's fast food with a waiter. Nothing more, nothing less.

4

u/OrganicTrust Nov 19 '22

This guy capitalisms

14

u/Stracath Nov 19 '22

As someone who has managed restaurants recently and was offered a partner position, that is super outdated. Food has gone up, but not too awful, and rent is through the roof, I had to do a lot of work to start making the last one I managed hit 10% profit. But, funnily enough the answer was to raise wages slightly and hire a couple extra people. The increase of service quality compared to everyone else in the area destroyed competition. Profit margin per order decreased slightly, but sales skyrocketed, passing a point to where it was more profitable due to increased volume since wages and rent are basically stagnant so the only increasing variable to pass is food cost.

→ More replies (1)

9

u/Mackmannen Nov 19 '22 edited Nov 19 '22

Food margins vary wildly, but usually you'll see 30% markup on cost.

Different country, but in larger franchises they usually try to hover 50-80% markup. So a burger that costs 10, costs 2 in products.

80% was almost impossible to have on any items (except the burger) but 30% markup seems really really low. Compare a steak at a restaurant compared to the grocer. Then also realise that it's far cheaper for the restaurant because of the volumes they purchase.

5

u/_Magnolia_Fan_ Nov 19 '22

That's not gross profit. That's markup.

6

u/[deleted] Nov 19 '22

You can back in to the gross profit based on the markup. 30% markup would mean ~23% gross profit (e.g. buy food for $1, sell for $1.30). The above poster is saying that 30% markup, or 23% gross profit seems low.

2

u/Mackmannen Nov 19 '22

Yeah I musta had a brainfart since I used markup later in the same comment, I edited it now.

→ More replies (2)
→ More replies (7)

771

u/chromeVidrio Nov 19 '22

of course they are lol

391

u/Thatguy468 Nov 19 '22

r/antiwork has entered the chat

9

u/[deleted] Nov 19 '22

r/workreform seems to have overtaken that sub.

6

u/redrumsoxLoL Nov 19 '22

antiwork is still the more popular subreddit. For a bit after the infamous Fox News interview people thought workreform would take over but it didn't end up like that.

-50

u/CoolguyTylenol Nov 19 '22

Let's not open up that can of worms

96

u/lonewanderer21 Nov 19 '22

Yeah let's not actually do anything to fix our problems. Just let things keep getting worse.

50

u/Deracination Nov 19 '22

Letting bots fill your feed with angsty Twitter screens is not helping nor will it help you help. It will just make you more susceptible to propaganda.

13

u/[deleted] Nov 19 '22

[deleted]

1

u/Front_Beach_9904 Nov 19 '22

Nope, just another crab in the bucket

1

u/Deracination Nov 19 '22

It literally is, yes.

24

u/AngryCazador Nov 19 '22

Hey bud, I'm not active on /r/antiwork or anything, but every movement has got to start somewhere.

It was a bonehead move for the mod to ruin the sub's reputation on Fox. But that was exactly what Fox intended to happen. That subreddit was not seen as a joke (unless you were in a conservative circle) until after that interview.

Ironically, you're kind of susceptible to propaganda yourself. You fell for Fox's propaganda.

1

u/Deracination Nov 19 '22

Oh, I don't really care about that incident. I have no respect for the sub because of its content. People sucking down unverifiable anecdotes and opinions on pedestals is just a wet dream for a propagandist. I always thought it was a bit of a joke because of how it presented information, but it has gotten WAY worse.

Quick edit: the entire front page right now is just screenshots of text. It's trash.

8

u/[deleted] Nov 19 '22

You’re being downvoted but you’re right. I’m pro-union and workers, but that sub is garbage.

4

u/redrumsoxLoL Nov 19 '22

A lot of the posts in that subreddit are people not understanding how businesses work and not understanding the law.

-5

u/j4eo Nov 19 '22 edited Nov 20 '22

What the heck are you talking about? That sub has always been terrible.

→ More replies (1)

4

u/Putridgrim Nov 19 '22

I fuckin loved that subreddit for the first couple months because it was full of legitimate complaints and strangers helping each other find better jobs in their area, helping people contact labor unions, informing people of labor rights violations that can be reported and who to report it to.

The original attitude on there was work reform, and then it turned into this idea that everyone should be able to live in a 5000 sq foot home with all the luxuries of life for nothing and complaints over mundane shit like "can you believe my boss made me sweep AND mop?! He's literally Hitler"

1

u/Demons0fRazgriz Nov 19 '22

Sounds more like you fell for the media campaign to belittle workers rights. I'm still actively on there and worker form and unionizing is still the highest priority and upvoted comments

→ More replies (1)

-40

u/Doobz87 Nov 19 '22 edited Nov 19 '22

I'm sorry, what exactly are the problems you think r/antiwork has and/or can solve when it's just a bunch of teenagers and young adults constantly complaining that not everything is just freely handed to them?

Edit: plenty of downvotes, yet nobody seems willing or able to explain how r/antiwork has actually solved a single problem for the working class. Interesting. Says a lot.

32

u/poopyroadtrip Nov 19 '22

How dare these darn kids want things like, checks notes, fair wages, labor unions, and healthcare?!

-5

u/Doobz87 Nov 19 '22 edited Nov 19 '22

Lmao it's not even that, though. Those are things they should absolutely be getting.

Have you actually been to that sub? People there complain about the smallest, most ridiculous shit (when they're not threatening to EaT tHe RiCh lol). A bit overcast outside? How dare bosses make people work in such natural disaster conditions. Feeling a bit under the weather and have the sniffles but your boss wants you to come in? Human rights abuses!

You're really going to sit there and imply that I don't think workers should have basic rights and protections because I dare point out that a subreddit named ANTI WORK is full of people...checks notes...complaining about having to work? Okay bud lol.

0

u/Milkshakes00 Nov 19 '22

God damn, what a strawman. Lmao

2

u/[deleted] Nov 19 '22

[deleted]

→ More replies (0)

2

u/Doobz87 Nov 19 '22

Yeah maybe learn what a strawman is, because that wasn't it. I was wrongly accused of holding a specific view (via passive aggressive sarcasm) so I explained my view in more detail.

Really showing the average r/antiwork user intelligence level, there. Lmao

→ More replies (0)
→ More replies (11)

5

u/ImFuckinUrDadTonight Nov 19 '22

Tipping is bad for the customer, not the staff. Take 15% of the gross meal cost and add it to staff wages and see how much they're really taking home.

4

u/chromeVidrio Nov 19 '22

You know what would be even better? A living wage + any tips.

7

u/ImFuckinUrDadTonight Nov 19 '22

I have no horse in this race. I haven't eaten out in 5 years. All I can say is that several other comments have confirmed that Olive Garden employees make between $20 and $40 per hour from tips, and are very happy with the current system.

Everyone complaining about the current system seems to be customers, who don't like having a 10% - 20% tax added on to the cost of their meal.

Which is fine. But changing the current system is for the benefit of the customer, not the staff.

→ More replies (5)

251

u/emusabe Nov 19 '22

Servers probably getting paid $2.13+tips an hour. Just like a majority of restaurants in the US. We depend on gratuity from strangers and not our own employer to pay our bills.

48

u/-Wesley- Nov 19 '22

Assuming tip of 10% of the total sales, that’s a tip pool of $1366 for the 82 labor hours listed. So is that actually another $16.65 per hour in tips?

68

u/Ceramicrabbit Nov 19 '22 edited Nov 19 '22

10% is a conservative estimate for a nicer restaurant like olive garden. It is probably a little over 15%

Seems about right I have friends that waited tables at upscale but not high end places and they make easily over a grand a week

131

u/[deleted] Nov 19 '22

a nicer restaurant like olive garden

Bless your heart.

56

u/fatalityfun Nov 19 '22

olive garden is definitely on the higher end of “common” restaurants.

→ More replies (1)

60

u/Ceramicrabbit Nov 19 '22

Olive Garden is absolutely above average prices and tries to provide an upscale experience.

7

u/BlueHeartBob Nov 19 '22

Honestly I agree with you. The service is actually pretty good and they’re actually quite accommodating. Now if only their food was more upscale

1

u/YourMildestDreams Nov 19 '22

The service is exactly the same as every other chain. What do you even mean, "the service is good"? Are there restaurants in your area where the waiter doesn't come for a half hour and then screws up your order?

13

u/Serinus Nov 19 '22

Maybe in the 1990s.

4

u/ThatDismalGiraffe Nov 19 '22

If your average is Sizzler and Applebee's, I suppose you'd see Olive Garden as "upscale". But if you don't live in a small town and you have even slightly better dining options, Olive Garden is just another trashy family restaurant.

→ More replies (1)

34

u/[deleted] Nov 19 '22

Eye roll.

Everything is on a spectrum. And considering everything from fast food to hole in the walls to chains to fine dining and what people can afford, OG is a nicer restaurant for 90% of the people in this country.

3

u/cindad83 Nov 19 '22

Its funny you say that, but try to take a women on a date to Oliva Garden or entertain Business Clients and you will be ostracized.

5

u/44no44 Nov 19 '22

Most people don't have business clients, and most people would be perfectly happy going on a date to a local diner, let alone an Olive Garden.

Your standards are based on an income a massive portion of the population does not have.

→ More replies (4)

3

u/[deleted] Nov 19 '22

I think you are making the mistake of thinking your personal demographics experiences are the American average. Which is a really easy mistake to fall into.

2

u/n_reineke Nov 19 '22

Here’s the thing. Chili’s is the new golf course. It’s where business happens.

-Small Businessman Magazine

3

u/44no44 Nov 19 '22

You might not consider 20+ dollars a head anything special, but for plenty of low-income families, Olive Garden is the closest thing to luxury they can afford.

1

u/skyactive Nov 19 '22

I want to date them just to feel like a big shot

→ More replies (2)

4

u/ImHighlyExalted Nov 19 '22

I've never met a server who is good at their job who would rather be paid a flat wage with no tips. A restaurant would rather pay 2 new servers $10-12/hr than one good one $25. But a good one waiting a whole section can easily make more than the 25/hr.

3

u/StoneHolder28 Nov 19 '22

Not disagreeing with you but I feel it should be pointed out that the servers not at nice restaurants, the people working at an IHOP or a Denny's, would probably like ~12/hr

→ More replies (1)

91

u/Willow-girl Nov 19 '22

I was a server for more than a decade. An employer would never pay you as much as you can make in tips (if you're even halfway decent at the job).

33

u/nick_oreo Nov 19 '22

Why cant you get tips for great service and actually have a living wage from your employer though?

17

u/imjusttired80 Nov 19 '22

Why can't any retail job or fast food joint do the same . Everyone needs a living wage not just servers depending on tips

9

u/Upnorth4 Nov 19 '22

In some states you can. In California and Washington everyone gets minimum wage

→ More replies (17)

32

u/Willow-girl Nov 19 '22

Because the kitchen staff would be so jealous they would murder you?

They have sharp knives, you know!

41

u/nick_oreo Nov 19 '22

I've worked FOH and HOH for many years. Pay all your staff a good living wage, the kind where they have some left over to save for a yearly vacation and unexpected expenses and whatnot (not just enough to pay rent and hopefully gas and groceries). They're literally the people carrying your business on their backs. Then pool the tips for the day, I think thatd make everyone wanna increase the nightly pool with better prepared food from HOH and make the FOH less stressed overall when they have to deal with people that stiff regardless of service and the typical crop of Karen's that saunter in.

2

u/[deleted] Nov 19 '22

[deleted]

3

u/[deleted] Nov 19 '22

I think you missed the whole point of their comment, which was if they were paid s living wage, and not 9$ an hour, it wouldn't be like this.

21

u/[deleted] Nov 19 '22

[deleted]

5

u/amiokrightnow Nov 19 '22

Maybe it’s like the nyc taxi industry where the old fashioned way of doing things that benefits a select few is just still going on. In this case it’s better for the restaurant owner to pay staff less and the public is kind of complicit bc they (we) like lower menu prices.

8

u/Serinus Nov 19 '22

And it's better for the waitstaff because they'll never make $30/hr otherwise.

→ More replies (2)

10

u/knot13 Nov 19 '22

Yeah I don’t get it and I’m from here, my wife used to be a server/bartender at Red Robin for years and I was baffled when she told me how she got paid. Why not just pay every worker well and have the servers give a set percentage of their tips to the cooking staff. The floor servers already do this for the bartenders (I think it’s called tipping out) because they make drinks for them. It just feels so dirty the restaurant is putting the responsibility of the workers wage on the customer. Should be illegal

14

u/BlueDragon82 Nov 19 '22

Because servers don't want higher pay in the US. Go look on the server sub-reddit. They make bank on tips. This has come up there several times and the majority are against raising wages. They aren't going to agree to less tips for a living wage. If servers were paid a living wage fewer people would tip and certainly not 20% or higher. Exceptions are there obviously but the general public tips because they feel obligated and are even shamed into tipping well. If they knew their server wwas being paid properly the pressure to leave a big tip diminishes. Tips would go back to being for great or exceptional service. Additionally a portion of tips are in cash most of the time allowing servers to under report their income. Before anyone says "they have to claim it on their taxes" if you have ever been a server, dated one, or are friends/related to one then you know that most cash tips aren't reported just enough to seem legit.

9

u/soitgoesmrtrout Nov 19 '22

The other thing is we've mostly just accepted tax fraud on that, too. The idea of actually reporting tips beyond what you absolutely have to is just accepted to not happen.

4

u/kindall Nov 19 '22

also a lot of people still tip in cash and it's easy to evade some of your income tax that way

-2

u/knot13 Nov 19 '22

I’m saying it’s not up to the servers, they are performing a service for the company and the company should be legally obligated to pay them a living wage instead of gouging their tips to do so, and I’d still tip for the record and not saying that should go away. Servers would make even more, very deservedly in a lot of cases.

1

u/BlueDragon82 Nov 19 '22

Who is going to vote for changes to labor laws to make it happen? Businesses won't. That leaves everyone else. Servers aren't because it hurts their pockets. Servers joining unions and pushing for it pay won't change. They aren't going to do that so then what? Who is going to push for it if not the people it's for?

→ More replies (0)

1

u/rubbery_anus Nov 19 '22

Americans are the sort of people who can convince themselves that paying more per capita for lower quality healthcare outcomes is much smarter than paying less per capita for higher quality healthcare outcomes because doing it that way means you won't accidentally end up helping someone else.

2

u/peptoabysmal Nov 19 '22

Most Americans don't believe that though. We are subjected to it. The setup allows too much political influence from private companies and their lobbyists. The amount of captilastic freedom in Healthcare is almost Irreversible. Private insurance, private hospitals, privatized drugs, private payment plans funded through private institutions. insurance accessibility and employee opt-ins are at least a start in the right direction. Ultimately states have to pass single payer systems and public health care infrastructure before the federal government can touch it in any meaningful way.

0

u/rubbery_anus Nov 19 '22

I don't buy that argument. None of that would be the case if Americans stopped voting against their own interests, but year after year they insist on voting for politicians that outright tell them they're actively trying to make life worse for everyone.

The GOP hasn't articulated a single cogent policy position in the last thirty years beyond "we're going to oppose anything Dems want, gut funding to everything we can, and reduce taxes on the rich", and yet tens of millions of people vote for them without even the slightest consideration for how it will materially affect their lives.

I don't have any sympathy for those people any more, and I don't believe a word they say about the conditions they want. I judge them based on their actions, and their actions tell us that they want things to be measurably worse for everyone.

→ More replies (0)
→ More replies (4)

3

u/Total-Khaos Nov 19 '22

And access to your food.

8

u/xmilehighgamingx Nov 19 '22

Customers are dumb and prefer to go to places where the price is lower on the menu and they have to tip. Some places tip pool and pay everyone the same. This is decent, but servers tend to do the job because they can make very good money in a very tough job. Good servers leave when everyone makes $25 an hour, because they can go somewhere else and make $35+. Good bartenders and fine dining servers make unbelievable money is short times, but it’s not a job everyone can do.

0

u/nick_oreo Nov 19 '22

Did fine dining serving for 2 years, made good money, but I quit because the restaurant was breaking labor laws and trying to not pay staff what they owed for the work done.

5

u/nero40 Nov 19 '22

Because someone in the past have the great idea of making the customer pay for the service instead of the employers themselves. The issue have been so ingrained in the culture for decades now and isn’t that simple to fix today.

3

u/[deleted] Nov 19 '22

Why can't they pay them a living wage so that tipping isn't considered mandatory.

5

u/[deleted] Nov 19 '22

Because why would they? From the restaurant perspective they can pay less and have the customer pay the difference. If they pay a fixed wage then they still have to pay it if business is slow.

From the server perspective they can get paid $25/hr flat rate or serve 6 tables an hour with an average cover of $60 totaling $320 and collecting 20% in tips or $72 for the same hour. Lets say the tips are "bad" and only 10%, ok $31/hr. Between the server and restaurant who is incentivized to change away from tipping?

1

u/FloridaManZeroPlan Nov 19 '22

Because in order for the restaurant to pay every single server a “living wage”, that additional money would have to come from somewhere. So you would be looking at a 20%+ increase on the cost of every food item on the menu.

$6 fountain drinks. $30+ entrees at the cheapest option. For an Olive Garden.

And then since the food is so expensive, customers would come less, since dinner for 2 is now almost $100 with no alcohol. And since you’re less busy, the serving staff would likely be reduced or someone let go.

Yes it’s very easy to say “they should get a living wage” but that money has to come from somewhere, and already that so many restaurants fail and have razor thin profit margins. There’s been quite a few stories of restaurants to try the “living wage” model and those either fail or can’t retain staff and switch to a tipping model.

Also, I don’t understand why people hate tipping so much. Tipping adds ~15%+ to your bill. With the living wage model, everything will be priced at least that more (if not a lot more to make up for slow days), and then you’re trusting the restaurant owners to actually pay the living wage, similar to trickle down economics. At least if you tip your server $10 then you know that $10 goes directly to them. If the goal is for servers to make a living wage, which they already do when people tip properly, then what is the point of switching to a living wage model at all? Either way you’re paying for it.

1

u/nick_oreo Nov 19 '22

Most of that isnt true, the cost of food would be the same and do you know how cheap pasta is to make? They have wholesale price on all the other food too, its alot cheaper than you think. Not to say fancy stuff doesnt go wild with prices but it's fine for normal items, they mark up the the price of alcohol like %1000 and food at about 200-300% of what it cost to make including labor and everything calculated. So the owner only gets 5 grand a week to sit and do nothing instead of 10-15 after a wage increase. The profit margins arent as thin as people think at a good restaurant.

→ More replies (6)

14

u/Undrende_fremdeles Nov 19 '22

It says 8.55 per hour here, so I guess that's an average and some are below, some are above. If this is at 6pm (as stated somewhere else), they have at least a little more to go on before higher wages would kill the business...

7

u/ArcticBeavers Nov 19 '22

Most likely the kitchen staff is getting paid on the $14-18/hr range

→ More replies (1)
→ More replies (1)

65

u/[deleted] Nov 19 '22

[deleted]

13

u/emusabe Nov 19 '22

I don’t think it should exist. But it does.

21

u/[deleted] Nov 19 '22

[deleted]

2

u/Teeroy_Jenkins Nov 19 '22

Waiting would definitely be more than minimum wage. I bussed at a place they paid hourly at for a summer at $11/hr and the servers were at $20+/hr

→ More replies (10)

5

u/Upnorth4 Nov 19 '22

As a dominos pizza driver we get infrequent tips and have to drive, cook, and prep when it's slow. In-House staff doesnt drive and don't get tips. On some days drivers would barely get anything in tips

7

u/[deleted] Nov 19 '22

[deleted]

6

u/Upnorth4 Nov 19 '22

Yeah, delivery drivers actually have to use their own vehicles and have operating expenses, unlike servers, who don't have any operating expenses.

→ More replies (2)
→ More replies (1)

1

u/xmilehighgamingx Nov 19 '22

If the cooks could serve, they would. It’s not nice, but waiting tables is not easy. Some servers can be lazy sure. The general public is god awful though, and being polite to the rudest people on the planet is why the cooks don’t serve. Also servers have bad shifts too. You make $30 and get cut some days. Customers also leave restaurants that increase prices and do away with tipping. The end price is the same but the perceived discount at the competition means you lose business.

1

u/Best_Duck9118 Nov 19 '22

Dumb, I’ve known a ton of cooks that have waited tables too.

→ More replies (3)

30

u/[deleted] Nov 19 '22

[deleted]

45

u/Willow-girl Nov 19 '22

I worked as a server from age 15-27, and not once did I ever make less than MW.

34

u/SSlimJim Nov 19 '22

My sister in law made 70k last year serving. She’s 18.

10

u/Willow-girl Nov 19 '22

Awesome!

Edited to add: I remember sitting in my high school senior year civics class and calculating that I probably made more than my teacher.

3

u/[deleted] Nov 19 '22

[deleted]

4

u/The_Forgotten_King Nov 19 '22

The same system you are praising also allows for small town low volume restaurants in the middle of bum fuck nowhere to pay their employees next to nothing.

This is not true. By law, employers must cover any difference between the tipped minimum wage and the non-tipped minimum wage if the tips don't at least cover the difference. So if the minimum wage is $10 and the server only made $3 in tips, the employer would have to pay $7, not $2.13.

Of course, you can reasonably argue that $10 is not enough to make a living, but that's a different debate.

5

u/soitgoesmrtrout Nov 19 '22

Yeah, the big secret of why wait staff doesn't want to get rid of tipping is they know it will mean less money to them.

→ More replies (5)

15

u/avidblinker Nov 19 '22

They’ll get brought down. Even at a place like Olive Garden, wait staff make well above minimum wage.

-1

u/hiscpanicausnapanic Nov 19 '22

Rarely happens.

15

u/malapropter Nov 19 '22

Lmfao who knows why you're getting downvoted. Most servers I know make between 40k and 85k a year.

6

u/hiscpanicausnapanic Nov 19 '22

Yeah no clue. Guess I offended them?? It's the truth though. CC tips always made up for your "wage".

7

u/avidblinker Nov 19 '22

All wait staff I know, including myself, would far rather work at a place with tips rather than what we would get paid without them. You should feel bad for the people paying the tip, not the wait staff.

1

u/malapropter Nov 19 '22

I feel bad for everyone who is slighted by the tipping system. It's an inequitable institution that should be illegal by now.

6

u/avidblinker Nov 19 '22

Only the customers are. And the the government, missing out on a lot of untaxed wages.

0

u/malapropter Nov 19 '22

Oh, and the back of the house, since they make scraps above minimum wage.

Oh, and the servers who are too old, or the wrong race in the wrong restaurant, or unattractive, or any combination of the above.

→ More replies (0)

-9

u/nick_oreo Nov 19 '22

Wow a whopping 7.25 an hour before taxes, guess I'll work 80 hours a week to either starve or be homeless let alone afford a car or phone. The American Dream 2022 premium platinum subscription. Where 3 dudes decided to hoard enough wealth to completely destroy the middle class in 50 years.

-6

u/Jazzmus0 Nov 19 '22

Business owners downvoting you

7

u/RadicalLeftist21 Nov 19 '22

No it's common sense people downvoting both of you.

Nearly every server that receives tips makes well about minimum wage. Worked in fast casual restaurants 2 years and neither myself nor any of the other servers were anywhere close to minimum wage.

14

u/the_reddit_intern Nov 19 '22

When tips don’t cover minimum wage, the employer has to cover the rest.

→ More replies (2)

101

u/[deleted] Nov 19 '22

And this is why unions are necessary.

68

u/Put_It_All_On_Blck Nov 19 '22

Except a server/waiters union would be against removing tips and going to higher wages. Because tips make them a lot more money than they ever would with a wage increase.

-2

u/nonotan Nov 19 '22

And yet when a client doesn't tip "enough", according to servers they could as well be satan. Worthy of a round of applause, from the perspective of someone from a non-tipping country. If they love tips so much, they should accept that what makes a tip a tip is it being voluntary. It's not my problem how much money some random waiter is or isn't making, I'm not ordering food to be charitable.

→ More replies (10)

-5

u/SenorVajay Nov 19 '22

This is probably true. But on the flipside they would get benefits. It COULD BE a wash depending on the establishment (what the menu prices look like) but some type of benefits are appealing, especially for long term workers.

A local restaurant I go to doesn’t allow tipping and says there’s a 20% service fee that goes towards paying for their employees benefits/wages. Obviously it’s just a price hike to make up the difference but at least the explaination on the menu lets you know it isn’t arbitrary.

→ More replies (1)

-3

u/Prostberg Nov 19 '22

That might surprise you, but in France, the waiters are paid with a decent wage (minimum is 11€/hr) AND they keep the tips.

Mind blowing right?

12

u/WOW_SUCH_KARMA Nov 19 '22 edited Nov 19 '22

Servers at Olive Garden in busy areas make significantly more per hour through tips. Take 20% of the average guest ticket cost from the picture and figure they have 2-3 tables of 2-4 guests each per hour (and that's a super conservative estimate) and you get more or less double the pay of a server in France, and there's some cash tips that aren't reported or taxed. Quite literally nobody who works at a halfway decent restaurant in America wants to move away from the tipping model. Anecdotally, every server I know in Columbus, Ohio clears north of $200+ in cash every single night. It's the consumers who want to move away from the tipping model (for good reason), not the employees.

I am not defending Olive Garden's pay structure.

1

u/JustBuzzin Nov 19 '22 edited Nov 19 '22

So $13,667 at an average of 20% top would be $2733. Divide that by 34 service and bar staff working during that shift gives average of $80 in tips. Is that a safe estimate? Or does that service emp on clock number include members of the staff that aren't getting tipped?

Edit: I was wrong, that emp numbers are hours. Any way to calculate how many tip receiving employees are working during this shift?

1

u/IAmAPaidActor Nov 19 '22

You don’t need any more information. You have total employee hours and total sales. Divide total sales by total employee hours to get sales per employee hour. Multiply that by the tip percentage of your choice to get the tips per employee hour. That would be $80/person/hour.

Most likely, the back of house staff and hosts are tipped in at a smaller rate, but they’re still making $50+/hr

2

u/Tropical_Bob Nov 19 '22 edited Jun 30 '23

[This information has been removed as a consequence of Reddit's API changes and general stance of being greedy, unhelpful, and hostile to its userbase.]

5

u/[deleted] Nov 19 '22

[deleted]

→ More replies (2)

0

u/porkchop487 Nov 19 '22

Reddit always jerks off about how you don’t have to tip in Europe lol

1

u/lightning__ Nov 19 '22

Reddit always jerk’s off about Europe.

→ More replies (1)

-1

u/verukazalt Nov 19 '22

Unions don't do shit for anybody but themselves

1

u/iclimbskiandreadalot Nov 19 '22

Ummm.... yeah...? Thats why you join one... and then they do shit for you..?

2

u/verukazalt Nov 20 '22

Was in a union once. They did nothing for anyone who needed their help besides take their dues.

→ More replies (1)
→ More replies (11)

6

u/pterabite Nov 19 '22

That's not the majority last I looked at it. Restaurant minimum wage varies, as does whether it needs to be topped up to the actual minimum wage by the restaurant. In most places, the top up means servers are guaranteed normal minimum wage.

2

u/Nervous_Constant_642 Nov 19 '22

Everyone is guaranteed a normal minimum wage. If you don't make up the difference in tips they're legally required to compensate you the difference. Nobody actually leaves with less than minimum wage.

Also only two states have a law that says $2.13 an hour, Wyoming and I forget the second one. There are more states where the norm is to pay state minimum plus tips than $2.13 an hour.

1

u/pterabite Nov 19 '22 edited Nov 19 '22

From memory I think there were a couple of places that didn't compensate the difference, but I'd have to check again. At any rate, people implying that servers only make $2.13 total drives me nuts.

Edit: 6 states pay 2.13 and have no state minimum, so don't appear to require top ups. Every other state requires more.

https://www.dol.gov/agencies/whd/state/minimum-wage/tipped#foot9

3

u/Nervous_Constant_642 Nov 19 '22

Hmm well I had bad info on the number of states but it's still federal law you can't walk away with less than $7.25. Federal minimum wage isn't a suggestion.

→ More replies (1)

3

u/Dorito_Consomme Nov 19 '22

Wage rate says 8.55. Sounds about right I’m working as a server in AZ making 9. Idk about other states but here the minimum you can pay tipped employees is minimum wage - $3.00.

2

u/IAmAGenusAMA Nov 19 '22

This receipt is from Canada (note the GST column). No province in Canada has a minimum wage that low, not even for servers.

2

u/tysnowboard Nov 19 '22

Majority of restaurants in the US are bound by their state minimum wages. Here in CA it's $15/hr

6

u/emusabe Nov 19 '22

CA, Alaska, Washington, Oregon, and Minnesota are the only states in the US where tipped employees have a minimum wage in the double digits per hour. Most states are in the $2-5/hour range with a few other exceptions. As seen here.

1

u/CoolguyTylenol Nov 19 '22

Alabama sucks for it

→ More replies (2)

2

u/Best_Duck9118 Nov 19 '22

And yet Redditors these days are way too cool with saying it’s completely cool to stiff servers. I’ve gotten multiple bans for saying that’s a dick move.

0

u/bristondavidge Nov 19 '22

Godspeed friend

→ More replies (8)

72

u/Zoso03 Nov 19 '22

Don't forget insurance, food wastage, advertising. It's a lot of little things that adds up.

58

u/pi-N-apple Nov 19 '22 edited Nov 19 '22

I bet the power bill is over $5k a month. And lots of other bills and property tax. Costs a lot to run a business, it’s a lot more than just labor.

38

u/TyRoSwoe Nov 19 '22

When I was an OG GM, the rent alone for my restaurant was 30k a month. We weren’t even in a great spot. I’m sure the restaurants in malls and etc were paying 40k-50k.

17

u/BurnItNow Nov 19 '22

My rent was 16k a month. Plus 8k electricity, 6k water, R+M, etc. restaurants that are running at a prestige margin will make 10% flow through.

22

u/Zoso03 Nov 19 '22 edited Nov 19 '22

Oh and taxes lots of taxes, and accountants and probably lawyers, also some type of HR person. (At least they should have these on hand or on contract).

Also forgot maintenance, upgrades and lost or broken equipment replacement, wasted products like food that gets thrown out and redone, comped meals. Also cookstaff make much more then servers, well typically they do.

3

u/friendlyfredditor Nov 19 '22

Businesses under ~$40m are still classified as "small" in the US and don't need much more than a single senior accountant who might delegate some stuff. They're charged out at a high rate but a restaurant is a relatively straightforward operation.

Restaurants aren't getting sued that often. Ya pay for liability insurance so that you don't have to keep a lawyer on retainer. Maybe you pay one to help set up the business and for advice on contracts/relevant regulations but again, relatively straightforward stuff for small businesses.

Comp'd meals don't make up that much of a portion of the service unless you're criminally understaffed and overtly popular and your staff are screwing up orders.

Like, I work at a family owned cafe and we might've comped mistakes and given discounts to regulars on about 2.5% of the total revenue today. Even if it's a busy day the total cost to comp several customers might be less just because there's more business to begin with.

Commercial equipment doesn't really depreciate that much so as an expense it's not as much of a feelsbad as inflation or rent.

→ More replies (1)

35

u/Leinad580 Nov 19 '22

You’d think so, but restaurants are typically very low profit margins.

32

u/TyRoSwoe Nov 19 '22

They are clearly in a state that has server wages that are below the federal minimum wages. In those states, food costs are the highest expense. I was a GM in WA. Labor was our highest expense.

19

u/Undrende_fremdeles Nov 19 '22

How can labor be this effing cheap?!

Shifting the wages from tips to the food price, less tips more wages, would make people able to get hpode loans, car loans etc easier thereby increasing life security for employees without changing the out-of-pocket expenses for a customer.

7

u/Iohet Nov 19 '22

My brother in law spent a number of years serving at Olive Garden. He made about 60k, which is nearly $30/hr(assuming ~40hrs a week, which is probably a little high). He's much happier with tips than he is with the proposals to give servers shit like 15-20/hr and do away with tips.

My wife was clearing $500/night bartending 20 years ago at a decent family restaurant with a small bar counter. She also prefers tips to hourly wages. I can only assume bartenders are doing better

All of the people I know that were tipped employees prefer the tip concept. I doubt you'll find a restaurant that would pay a waiter $30/hr anyways, certainly not an Olive Garden

4

u/Serinus Nov 19 '22

Also for all the people who hate tipping.

15-20% for table service is standard. That number does not go up over time. That's not how percentages work.

There's absolutely nothing wrong with tipping 15%.

The server isn't going to notice you unless you tip either 10% or 30%.

You don't have to tip for takeout or fast food (unless there's table service.). Delivery drivers are not tipped a percentage. They may be tipped based on the distance or the physical size of the order.

4

u/pmslady Nov 19 '22

In Canada, we’ve been seeing 18%, 20% and 25% as default options on machines and servers are paid minimum wage except those in Quebec. Years ago, 10% was acceptable but that’s no longer the case.

→ More replies (5)
→ More replies (5)

6

u/potatogun Nov 19 '22

You could look at Darden's financials to see a big picture view.

4

u/Orcle123 Nov 19 '22

restaurant maintenance and upfront cost is also notoriously expensive. So depending on how long its been there and been franchised, they may be in the green, or may be in the red.

3

u/SSlimJim Nov 19 '22

When I worked in food service management the goals were basically. 25% labor 25% food 25% rent/utilities/etc 25% profit

We never once made the goal of 25% profit. Normally in the 15% range.

9

u/Enorats Nov 19 '22

They didn't make that much, that was their gross. You have to deduct the costs of literally every other part of the business as well.. food, utilities, equipment maintenance, building maintenance.. it all adds up.

To be honest, I actually surprised that their labor is such a high percentage of their daily gross. They must have a fairly good margin on their products, at least compared to the industry I work in.

3

u/malapropter Nov 19 '22

13% is an astonishingly low labor cost, and if I had to guess, either the POS doesn't track employees still on the clock and/or salary employees are left off.

The target prime cost (cost of goods sold + labor) for restaurants is around 55%-65%. The typical balance that I've seen in 22 or so years of restaurant work is around 30% labor and 25% food cost. That can change depending on the concept, food, style of service, etc.

2

u/Willow-girl Nov 19 '22

They must have a fairly good margin on their products,

Pasta is cheap.

0

u/[deleted] Nov 19 '22

[deleted]

2

u/an_illiterate_ox Nov 19 '22

Never been to Olive Garden in my life but I don't think they're making from scratch pasta back there.

1

u/Willow-girl Nov 19 '22

LOL, yes.

Red sauces are pretty cheap too ...

0

u/mdibah Nov 19 '22

Hell, we're talking about a franchise that is too cheap to salt the water when boiling pasta.

→ More replies (2)
→ More replies (1)

10

u/Parkimedes Nov 19 '22 edited Nov 19 '22

It says the labor cost per guest is $2.95. So if I understand that right, when I pay for a party of four, and tip $16, for example, I’m paying the servers more than they’re getting from their wages.

Yea, they’re underpaid. Also, it says their rate is $8.55.

Edit: do they just add tips into that? Or are tips distributed outside of all these numbers? I’m seeing another comment say their wage is likely less that $3/hr but plus tips. Maybe $8.55 includes tips! That means the $2.95 per customer is including their tip.

10

u/grahampages Nov 19 '22

I bet that 8.55 is the average between the front of house and the back.

→ More replies (3)

3

u/emannikcufecin Nov 19 '22

The report doesn't add tips into it. That's actual labor costs but it doesn't include benefits or taxes on wages that the employer pays.

2

u/RandyHoward Nov 19 '22

Yeah I'm pretty sure that wouldn't be adding tips in, because tips are not a cost to the business.

2

u/Ceramicrabbit Nov 19 '22

Staff gets paid mostly in tips

2

u/I_talk Nov 19 '22

10-20% labor expense is a standard range for most places.

2

u/tunamelts2 Nov 19 '22

$1800

The rest of the workers' pay is in tips.

2

u/I_EAT_POOP_AMA Nov 19 '22

chances are the labor cost isn't accurate to the average hourly wage of the staff (but with it being Olive Garden, it wouldn't surprise me if it's close enough).

In most cases, the POS software doesn't have accurate wage data, since that's usually handled by a completely separate software suite, controlled by corporate office. For most restaurants i'm familiar with, the only labor metric that matters from this report is the Labor%. At most restaurants i worked at, the wage data was either set to 0, or to federal minimum wage

That's the metric that measures your total labor hours vs the number of customers in the reported time period. That percentage is tracked based on customer forecasts, and is the main indicator of whether or not you're over or understaffed compared to what you're projected for. And in most cases, it's tracked over the course of a business day, as well as weekly, monthly, and for every financial quarter.

5

u/BurnItNow Nov 19 '22 edited Nov 19 '22

There is a high likelihood that the labor numbers are not accurate. That equates to roughly $25 an hour. Considering only the cooks would make more than $8 an hour and they are only 29 if the hours…. No shot.

As someone that manage restaurants for a decade I can say restaurants run on 30% labor cost 30% food cost. So of that 13k - $7800 was spend on food and hourly labor (management not included). Then you have controllable expenses like Togo supplies, napkins, toilet paper, soap, salt, pepper, etc. which should be less than 10%. Then non controllable like rent, electricity, water, payroll taxes, etc.

After everything, if managed properly, the restaurant should see about $1k hitting profit.

Edit: I may have missread their DSR. I don’t know what “total labor vs midpoint” means. I thought that was total hours. I see now it shows 220 hours. Or $8.55 not $25. Could be accurate but still unlikely considering it says 13% labor cost.

A restaurant running 13% labor cost would not keep staff very long. They would be working their fucking asses off.

3

u/BerkofRivia Nov 19 '22

No it doesn’t. 1882.95/220 equals to roughly $8.5

→ More replies (1)

6

u/[deleted] Nov 19 '22

"Average arr-antiwork denizen fails to understand the economics of the restaurant industry"

-Colorized, 2022

→ More replies (11)

4

u/tojoso Nov 19 '22

Oh nice, the r/antiwork 13-year-olds army has shown up!

2

u/emannikcufecin Nov 19 '22

You need to learn more about how business works if you think that's robbing the staff.

0

u/[deleted] Nov 19 '22

I know exactly how it works. It works on exploitation and coercion.

2

u/Put_It_All_On_Blck Nov 19 '22

That's because waiters make their money in tips, not wages.

Most waiters prefer it this way, as they can make far far more money this way. Take away tips and wages go up a bit, but it's still hospitality work with no skills needed, so it will be low.

→ More replies (2)

1

u/PhonyUsername Nov 19 '22

Waiters get $2/hr from company and $30/hr from customers. Tipping culture is dumb.

1

u/Moonw0lf_ Nov 19 '22

Every single corporate run restaurant is robbing their staff

1

u/goldbird54 Nov 19 '22

They are not “robbing” the staff. The staff agreed to the offered wages by accepting the job. Everybody wants to act the victim these days. (Start your downvoting, Cancel Culture, but it doesn’t change the facts.)

-1

u/Arpeggioey Nov 19 '22

LOL they are. Fuck restaurants pay shit for labor, and then harass you to get off the clock faster while adding tasks to your "closing" duties. Truly despicable, I hope workers realize they can charge way more. FUCK corporate

-1

u/hiscpanicausnapanic Nov 19 '22

2.13 an hour will do that to labor.

4

u/imjusttired80 Nov 19 '22

Not hating on servers but if you were to offer the 15 an hour or tips I think a large majority will keep the tips , I don't agree with it but it's just sensible.

-1

u/Mountain_Jello7747 Nov 19 '22

What company doesn’t bro

0

u/RawToast1989 Nov 19 '22

Yeah, it's a lot like the staff is getting ripped off. Like, a lot like that.

→ More replies (62)