By Kerri Adams, Editor-at-Large
As if the average 5-6 % profit margin wasn’t tough enough for restaurant operators, the minimum wage increase to $15 means restaurants will be even less profitable.
Many operators have argued that an increase like this would not only be detrimental to their business, but the employees would ultimately suffer with weekly hour cuts and even may lose their job entirely.
“The cost of doing business is just crazy,” said Hugh Acheson, Top Chef judge and chef, while on a panel at the recent Food & Wine Classic event.
With that in mind, even super star chefs are struggling with these thin margins.
Acheson’s fellow panelist Tom Douglas, a restaurant mogul in Seattle with 18 restaurants decided to drop tipping at all of his restaurants. Instead, there is a 20% service fee which helps to cover FOH and BOH costs. With the $15 minimum wage, it will cost Douglas $5 million more just this year for his 850 employees.
“If we only had restaurants we would be out of business,” said Douglas on the panel. “The restaurants would not be able to sustain this hit.”
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