December 5, 2023 • 24 mins
The Pre-Shift Podcast presented by 7shifts is a deep dive into what it takes to run great restaurant teams.
Host DJ Costantino covers the restaurant industry with conversations featuring industry leaders and innovators sharing their business growth insights, backgrounds, and valuable lessons on running restaurant teams.
On this episode, we’re joined by Chad Mackay, CEO of Fire & Vine Hospitality in Seattle, WA.
Chad Mackay, CEO of Fire & Vine Hospitality, leads a multi-concept operator of full-service restaurants and oversees the successful Revelers Club loyalty program, boasting 80K members and contributing 30% to the company’s revenue since its 2011 inception. El Gaucho, the flagship concept founded in 1996, spans five locations, while Fire & Vine owns AQUA by El Gaucho, Aerlume, and the Witness Tree lounge. The Revelers Club extends to independently owned properties like Walla Walla Steak Co., Crossbuck Brewing, and Yellowhawk Resort in Walla Walla, WA. Drawing from two decades of hospitality expertise, Chad founded Brigado, a consulting and technology firm. He actively serves on Oracle's Customer Advisory Board for the Global Food and Beverage Industry Group and has held leadership roles in associations like the Washington Hospitality Association and Visit Seattle. Chad is a sought-after speaker on adapting compensation models for full-service restaurants in response to the $15 minimum wage.
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Fire & Vine Hospitality
Brigado
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Credits
Host & Producer: D. J. Costantino
Producer: Samantha Fung
Editor: Fina Charleston
About 7shifts
7shifts is a scheduling, payroll, and employee retention app designed to help restaurants thrive. With an easy-to-use app and industry-specific solutions, 7shifts saves time, reduces errors, and helps keep costs in check for more than 50,000 restaurants.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
While everybody is stripping down service, we're
actually adding additional stuff, which is cool.
Speaker 2 (00:11):
Hello and welcome back to another episode of the
Pre-Shift Podcast, where we divedeep into what it takes to run
great restaurant teams.
I'm your host, DJ, and todayI'm sitting down with Chad McKay
, CEO of Fire and VineHospitality.
Speaker 1 (00:24):
My name is Chad McKay and I'm the CEO of Fire and
Vine Hospitality.
Speaker 2 (00:30):
Fire and Vine has been running restaurants in the
Pacific Northwest for more than25 years and it's still growing.
At the core is the steakhouseEl Gacho, with five locations,
and the group has eightrestaurants and a few hotels in
its portfolio.
What drew me to feature them onthe show was the unique way in
which they pay their team.
Fire and Vine servers work on acommission model where they get
a percentage of all the foodthey sell and some servers are
(00:50):
pulling in more than a hundredbucks an hour.
Chad and I get into how they'reable to make that work and how
it's changed their business forthe better.
As always, the Pre-Shiftpodcast is brought to you by
Seven Shifts team management forrestaurants.
Before we dive into the bigquestions about employee comp,
there's a few important thingsto understand about Fire and
Vine's business to understandthe whole story.
One big part of that is howthey focus their business coming
(01:11):
out of 2020.
Speaker 1 (01:13):
Our operation was really simplified Tuesday
through Saturday night, and whathas happened is that our
revenues far surpassed 2019,even though we missed those two
days and missed the five-dayparts of lunch, our
profitability has taken awonderful turn up.
We've not looked back wherethere's no consideration for
(01:36):
reopening for lunch.
There's no reconsideration ofopening on Sundays or Mondays
unless there is a special event.
For instance, if there's asporting event or a concert
that's so compelling if TaylorSwift's going to play, we
probably need to be open.
So things like that and I think,the other piece that coming out
(01:59):
, we realized that probably theway we used to just look at
stuff was just overall revenuenumbers, which is important, but
because we're in such high-coststates I mean we're in minimum
wage states and cities thatexceed maybe I think we're the
highest state in the union,we're almost the highest city in
(02:20):
the country for Seattle wereally needed to focus on
productivity, and so the salesper labor hour number is now a
key.
It's really a great KPI for usto tell us are we on track to
profitability?
Are we off track toprofitability?
It's a really great number forme to gauge where we're at, and
(02:43):
before we'd never really paidattention to sales per labor
hour.
But I think as an industry it'sone of those items that,
because labor costs have gottenso high, we have to get more
productivity out of the laborbase that we have.
Speaker 2 (03:00):
These new operating hours allow for them to focus
harder on the times when they'reopen.
It's also provided space forspecial and corporate events
which are profitable from thejump.
Speaker 1 (03:08):
You have so many reservations, but then you're
also kind of hoping that peopleare going to walk in, so you're
kind of waiting for this other40% of the business, of what's
going to happen.
And what this does a lot of usis Tuesday through Saturday.
We've concentrated because we dohave a loyalty program We'll
talk about that later so we dohave pent up demand for our
restaurants, but we basicallyhave just really moved those
(03:30):
counts into a five day insteadof seven days and so if you look
at overall counts, it hasn'tdropped, it's actually just
compressed.
So that makes those days muchbetter.
And then the awesome part ofall of this is we created space
on those Sunday and Monday, aswell as during lunchtime, to do
(03:51):
special events, to do corporatelunches for 100 people, to do
buyouts of the restaurant, whichgive you profitable business
every time you do them.
So again, you're not openingthe door and hoping and praying
as a strategy that you're goingto get enough people in, and so
(04:13):
it's just.
It's been fantastic and I thinkthe yeah, so that you know
that's just a big piece of beingable to create those
opportunities where maybe wewouldn't have been able to take
100 top or 150.
Or people wouldn't think of us,but we're now competing with
the hotel spaces during thedaytime.
Speaker 2 (04:32):
Now, maximizing productivity does not mean just
squeezing the most out of youremployees that you do have.
If anything, it's allowed for abetter balance and it's let
fire and fine double down onexperiential service like table
size, caesars and bananas fosterthat light up the dining room.
Speaker 1 (04:47):
And when I say productivity of trying to
maximize, it's not aboutmaximizing the productivity,
it's about where's the balance,and so what we look at is is it
great for the guests, is itgreat for our team and is it
financially sustainable to do?
We're experiential restaurants.
That is one of the things thatwe've got to deliver on that.
(05:10):
We do table site Caesar, wecarve Chateau Brionnes, we do
Bananas, Foster and all ofthat's done in front of the
guest, Whether it's the serverdoing it or one of our tuxedoed
captains.
But what we've done is we'veactually upped the game.
We do more table site now inevery one of our restaurants
than we ever did before, Becausewe want to maximize the
(05:33):
experience, not necessarilyrevenue, not necessarily
productivity.
It's making sure that you are,that you understand where your
sales productivity needs to beto be profitable.
We talked about sustainability.
A lot of that is aroundfinancial sustainability.
Could we keep doing what we'redoing?
Our team has added table site.
(05:57):
While everybody is strippingdown service, we're actually
adding additional stuff, whichis cool.
Speaker 3 (06:03):
You never left for you guys, right, you're doing it
more.
You're doing it more.
Speaker 1 (06:07):
Yeah, we added Steak Diane to our Goucho menus, which
is a fun table site steakoption, Things like that.
It's really cool to be able todeliver for a guest and just
show them.
Hey, we're not like everybodyelse, we're actually giving you
more, we're doing some morerazzle-dazzle, we're having some
more fun not taking away thingsbecause we're trying to cut
(06:32):
costs everywhere.
Speaker 3 (06:33):
Yeah, absolutely.
That's one of those things tooin the dining room that just
invites people to.
I want that too.
It's like the easiest possible.
Speaker 1 (06:41):
Yeah.
As soon as the first bananafosters lights up and the smell
hits the room, people are likewhat is that?
The flames are going and yeah.
Speaker 2 (06:50):
But when your servers are performing duties, normally
observed for the back of thehouse, how does training work
exactly?
Spoiler, it can be intense.
Speaker 1 (06:58):
Because of our service level, the servers can
only handle so many tables.
When we bring a new person in,they're going to go through 10
days of really intense training.
They're going to go throughfront desk.
They're going to see thekitchen expo and then they're
going to work with an individualserver that does training on
that.
They won't even get a tableuntil after that 10 days and
(07:21):
then they'll start with a table.
Then they're going to build totwo, then over time they'll
build to three.
We say it takes about six monthsto make a server feel pretty
good not super confident, butpretty good because they have to
master the menu, which isn'tthat hard, but you still have to
(07:44):
do all those things.
You have to master all of theplay settings, all of the mes
and plus all of the table sidethat the servers involved with,
which the Caesar salad would bea big one.
We make millions and millionsof Caesar, so you just get
really good at it.
They take time to build up.
(08:04):
As you get busier and you doturns, then we're adding in
support teams to help them onthose turns.
We need them to ring a certainlevel so they can make money
Then to turn those tables andyou start adding in additional
busters, food runners, othersthat help on that productivity
(08:26):
side for that next level ofrevenue.
If you only do one turn tonight, you don't really need a busser
.
But if you're doing a coupleand you've got a lot of action
going, then that's where theystart to pay for themselves.
Speaker 2 (08:42):
I also wanted to understand how Fire and Vine
measures, labor productivity andstaff have such a narrow focus
and fewer tables than mostrestaurants.
Speaker 1 (08:50):
Yeah, I think right now, if I just look at a
trending number, I want to besomewhere around the 110 mark,
so $110 per direct labor hour.
Depending on what's happening,we can see that all the way up
to 200.
So if we have big privateevents, but for all the car,
(09:10):
probably around 130, 140 meanswe've got a lot of turns going
or we went a little too tight.
Again, that's an indicatornumber versus a absolute number
of what people need to do.
So at the end of the day,you've got that.
And then you've got yourreviews Right.
(09:30):
So we get a lot of onlinesubmissions through.
We happen to use seven roomsfor our reservations, so we get
hundreds of reviews a day, andso that's part of did we break
the restaurant last night?
Right, and sometimes you breaka restaurant it does happen.
It just gets beyond where youcan deliver.
Speaker 2 (09:53):
It's not always about hitting a number, though McKay
acknowledges that it's not ascience, and some things are
just done based on therestaurant's core values.
Speaker 1 (10:01):
What we look at is we got to make sure our people are
making money Right.
So it's like if you haveservers that are only ringing
$1,000 and they need to beringing two or 3,000 to make the
kind of money that should wellpart of that staffing like are
we starving people versus givingthem opportunities to create
revenue?
And then the other is it's thesupport team needed to help
(10:24):
sustain that, because the serverreally becomes a primary
element of our restaurant.
And then our captain layer,which comes and does the table
side and the wine, but alsocaptures and supports the
service team.
You know, if they get stuck ona table, that's super talkative
or it's taking a while.
They could just blend over andgrab their other table and take
(10:47):
them to the finish Right.
So we go back and again, if youlook at our purpose, it's we
revel in celebrating life, andso if you do that and you figure
out how are we going to do thatfor this party and then you
take some decision criteria,which is is it great for the
guests, is it great for the teamand is it financially
sustainable?
(11:08):
And if you can answer yes tothose three questions, just get
her done Right.
And also, you know our credo.
We have a series about 28different things that we go
through that are behavioralstandards and one of them is we
start with yes.
So when, when somebody'swanting something, we start with
yes and then we let them knowhow we can do that.
(11:29):
Versus walking into arestaurant or calling and
they're like we're fully booked.
I'm like I I've been to acouple fully booked restaurants.
Most restaurants, even busyones, are not fully booked.
If I walk in at 515 and youneeded the table back at 645, we
got a deal.
You just have to start with yes, we'd love to get you in, but
(11:51):
we have the table back at 630,you know so.
So I don't know if that thatgives you a couple of ideas, but
that that those are the thingsthat we're focused on.
We don't sit there with ascorecard of you know you got to
hit 110.
That's like at the end of themonth, like let's see where
we're at during the week andjust know you know if, kind of
(12:12):
day to day, where that number is.
So it's just a good indicator.
Not the marching orders.
The marching orders is Revealin SolBringLife.
Speaker 2 (12:23):
Take it a quick break to share an exciting update
from SevenShifts.
Usually I don't do this, butour users have been waiting for
it for a long time.
I know I don't have to tell youthat running payroll is a
lengthy manual process Dataentry, multiple systems, cross
referencing, triple checking soI'm excited to announce that
SevenShifts payroll is nowavailable in the United States.
Now you can schedule youremployees, manage the time clock
, calculate tips and pay yourteam in one app, and when you
(12:45):
make the switch to SevenShiftspayroll, your first three months
are on us.
Now it's time for the bigquestion.
The commission model forservice Commissioners is common
in industries like auto sales,retail real estate, but it's not
all that common in hospitality.
But Fire and Runt is found away to make it work.
Give staff an opportunity toearn high above industry
averages.
I'll let Chad explain how itworks.
Speaker 1 (13:06):
We stumbled upon a new way to really think about
how we pay our employees, how wepay our servers primarily, and
that was to implement a servicecharge across the board.
So, no matter party size, wejust do a 20% service charge and
a 22% for booked contractedevents and then we pay, instead
(13:31):
of trying to divvy that out as atip and do all these different
things that other people do ortrying to figure out well, how
do we pay everybody $30 an houror all this kind of stuff?
We started with the premise andI sat in front of our teams and
stood in front of them andtalked about it.
This is not a front of thehouse, back of the house war.
That's not a war we're in, norwas it a war we were ever about.
(13:56):
I paid my back of the houseteams well then.
I pay them well now, and that'sa different career path.
I love my servers, I love thesales team.
They execute and deliver to theguest, and without them we
don't really have a businessbecause we won't have the guests
.
And so what we did is we tookthe model that was this tip out
(14:21):
model, where really the serverwas keeping about 12.5% of their
sales as tips for them.
The rest of it was gettingtipped out to expos and front
desk and bussers and captainsand the wine steward and all
that kind of stuff and we putthem on a 15% commission.
(14:42):
So not the service charge.
Service charge is a differentdeal.
But their commission sellspeople.
Now If they sell it and wedeliver and we don't take it off
the bill for you know, forreason, like we burn a steak or
whatever those types of thingsor we messed up, then they get
paid.
It's not to the whim of theguest, it's not you know that
(15:04):
side, it's your professional.
You get paid with what you sell.
And if the customer, if ourguest, wants to leave an
additional amount, they'rewelcome to.
But it is not asked.
But we do allow that.
We will accept that becausethere's some people and I've
(15:26):
been in this situation where Iwent to a restaurant I wanted to
take care of.
There were some other placeplaces that were doing a service
charge, but then they, theircompensation model was totally
different and I wanted to leaveas extra as our server just did
an awesome job and they're likeyou can't, like wait a minute, I
can't.
I actually want to leave somemore money.
(15:46):
We don't have a way.
I'm like, well, ring a dollarup and let me tip, or you know
something, so.
So leaving that out, I think, isit's it's an area where other
places have struggled.
What we want to do is want totell our guest we're going to
deliver for you and we've beendelivering for 25 years, 26,
(16:08):
almost 26 years now for ourcorporate clients that have
always paid a service chargeRight.
A third of our business hasalways had a service charge and
now the other two thirds does aswell.
And if we, if we don't make itright, then we, we eat the bills
Right, just like you do onother things.
(16:29):
So, and then this is I have aDJ.
I think this is something thatwas a surprise, but, looking
back on it, I didn't realize howpoor the restaurant industry
did of marketing people that hadnot worked in our business.
When you have a job postinglike this, come work for us.
(16:51):
It'll be minimum wage plus tips.
You'll be a bus driver.
You'll, minimum wage plus frontdesk, be a runner, minimum wage
plus tips.
Well, if you've never worked inour industry, what does that
mean?
Speaker 3 (17:05):
Right.
Speaker 1 (17:05):
Right, and it was actually talking to a front desk
person that had been hired atour Bellevue location and she
had been on the job about fourmonths and I was asking how it
was going and this has prioredus switching to this service
charge commission model in thisnew way of compensation and
(17:25):
she's like oh, it's fantastic.
She had come from Nordstromsand she's like I just love it
here, people are awesome.
I said, how's the money?
She's like oh, it's great, youknow, I make.
I think at this time it waslike 14, 15 hour.
And then I make five or sixbucks an hour in tips.
She goes, but I don't countthose because I can't count on
them.
And I was like okay, so youmake 21 an hour and you don't
(17:52):
count on that, even though forfour months you've made $21.
And I just realized, if you'renot in this business, we do a
disservice to ourselves.
And so when we switched ourservers to commissions, we
actually switched all thesupport teams which were our
really entry level points.
We converted them to hourlyrates.
(18:14):
And so all of a sudden, ifyou're a bus or 22, 25 an hour,
that's guaranteed You're notwaiting for a server to pay you
out.
We could advertise for frontdesk and start them at 20 bucks
an hour.
Again, this is seven years ago.
That was kind of unheard of,but that's what people were
making in our restaurant, and sowhen I look at labor, at the
(18:41):
end of the day I want us to win,I want our teams to win, I want
our restaurants to win, I wantan unfair advantage over other
places.
I don't care about the otherplaces, I want us to win.
So in the advertising game andthe marketing game of entry
level, we've won.
Speaker 2 (18:59):
In detail, the servers make a set base wage
with the commission on top.
Speaker 1 (19:06):
Typically there's a base wage and then the
commission, so in essence 15%.
Sometimes it's a littledifferent or it's an hourly rate
for a couple of events.
So it's a base wage pluscommissions, plus any additional
bumps that they get are 100%.
There's no credit carddeduction and no tip out to
anybody else.
So those three components.
The average server is somewherein that $60 to $90 an hour, but
(19:32):
we have servers up into $110,$120 an hour in terms of
earnings, between all of thosethings.
Speaker 2 (19:41):
But the drastic switch like this, especially
when compensation is concernedit may alienate some longtime
staff, which it can admit was afear, but it has had a positive
impact on how employees work intheir day-to-day.
I think one of our mostimportant things is that we have
a lot of people who are workingin the same field.
Speaker 1 (19:57):
I think one of our longtime servers.
He's 22 years, 23 years.
I was asking him how it wasgoing.
This is six and a half yearsago, so after about six months
and he's like I have neverrealized how much I prejudged
tables until I didn't have to.
All I got to do is practice mycraft and I get paid right Take
(20:25):
care of the guests and if I doit exceptionally well, I might
get a little extra.
If not, I don't have to worryabout preconceived notions.
Are they international travelers?
Like I get paid and I love thisjob and, yes, compensation is
part of, but I don't have toworry and run over and look at
the check to see if they left meanything or do an autograt
(20:47):
under the old deal.
And so he's like it's so muchmore relaxing to take care of
the costs.
People not worry.
Is this table even going to tipme?
Like I get three tables tonightand this one might stiff me.
So.
And then one of our veryveteran servers.
She was with us 23 years untilshe retired.
(21:10):
At the end of the day she waslike yeah, why didn't we do this
20 years ago?
She's like this is the bestthing going that was what my dad
said too Because it justchanges the dynamic.
Speaker 2 (21:23):
And they also didn't find that it led to any
attrition.
If anything, a lot of staffregret not doing it sooner.
Speaker 1 (21:28):
We didn't lose a single server when we converted
everybody Like to me.
That's, that's the.
The pudding, you know, that isthe proof is when we switched
over, are we going to lose our,our senior servers?
Speaker 3 (21:42):
People that have been there for a long time.
Speaker 1 (21:44):
Yeah, and, by the way , that's the last thing I want
in a in experiential restaurantwith longtime clients.
And so that's why I think someof the other restaurant tours
that have done some of thesedifferent models, they've they
lost sight of the fact that partof their restaurant is their
service staff and, yes, there'sthe cooks and you need to take
care of them, but, man, youcannot balance the P and L off
(22:08):
of your servers.
Speaker 2 (22:10):
Now McKay is working to help other businesses follow
the same model of paying theirteams, among other things with
his new company, brigado.
Speaker 1 (22:17):
Brigado's art was an in-house kind of a captive IT
company that we started aboutsix years ago and that has now
morphed into, you know, a wholenother company that is
delivering tech support servicesand projects and POS management
, network management,cybersecurity, those types of
(22:38):
things, specifically in thehospitality space.
We do take care of a companythat has a lot of clients as
well, and so that has been oneoutlet that I have done some
consulting and more speakingengagements around, and so you
know some people are open to itand some people are not.
(22:59):
We in the very beginning wetold everybody what we were
doing, we showed them how to doit, and I think we've talked
with 50 restaurant tours inPortland and you know, at the
end of the day nobody else didit.
Or if they did it in Seattle,they they were trying to peanut
butter around, they lost theirservers, and so again, I learned
from other restaurants thatwhen I say they declared a war
on their sales teams, theydeclared a war against their
servers, trying to balance theirbusiness On their backs, and to
(23:28):
me that's not fair.
Speaker 2 (23:36):
Thanks for checking out this episode of the pre
shift.
If you enjoyed this one, leavea review and share it with one
friend to help the show growCould not do without your
support.
As always, I'd love to hearwhat you think.
You can email me at dj at sevenshiftscom.
You can also find greatinsights like these on the seven
shifts blog and on all of oursocial channels.
Catch you next time.
While everybody is stripping down service, we're
actually adding additional stuff, which is cool.
Speaker 2 (00:11):
Hello and welcome back to another episode of the
Pre-Shift Podcast, where we divedeep into what it takes to run
great restaurant teams.
I'm your host, DJ, and todayI'm sitting down with Chad McKay
, CEO of Fire and VineHospitality.
Speaker 1 (00:24):
My name is Chad McKay and I'm the CEO of Fire and
Vine Hospitality.
Speaker 2 (00:30):
Fire and Vine has been running restaurants in the
Pacific Northwest for more than25 years and it's still growing.
At the core is the steakhouseEl Gacho, with five locations,
and the group has eightrestaurants and a few hotels in
its portfolio.
What drew me to feature them onthe show was the unique way in
which they pay their team.
Fire and Vine servers work on acommission model where they get
a percentage of all the foodthey sell and some servers are
(00:50):
pulling in more than a hundredbucks an hour.
Chad and I get into how they'reable to make that work and how
it's changed their business forthe better.
As always, the Pre-Shiftpodcast is brought to you by
Seven Shifts team management forrestaurants.
Before we dive into the bigquestions about employee comp,
there's a few important thingsto understand about Fire and
Vine's business to understandthe whole story.
One big part of that is howthey focus their business coming
(01:11):
out of 2020.
Speaker 1 (01:13):
Our operation was really simplified Tuesday
through Saturday night, and whathas happened is that our
revenues far surpassed 2019,even though we missed those two
days and missed the five-dayparts of lunch, our
profitability has taken awonderful turn up.
We've not looked back wherethere's no consideration for
(01:36):
reopening for lunch.
There's no reconsideration ofopening on Sundays or Mondays
unless there is a special event.
For instance, if there's asporting event or a concert
that's so compelling if TaylorSwift's going to play, we
probably need to be open.
So things like that and I think,the other piece that coming out
(01:59):
, we realized that probably theway we used to just look at
stuff was just overall revenuenumbers, which is important, but
because we're in such high-coststates I mean we're in minimum
wage states and cities thatexceed maybe I think we're the
highest state in the union,we're almost the highest city in
(02:20):
the country for Seattle wereally needed to focus on
productivity, and so the salesper labor hour number is now a
key.
It's really a great KPI for usto tell us are we on track to
profitability?
Are we off track toprofitability?
It's a really great number forme to gauge where we're at, and
(02:43):
before we'd never really paidattention to sales per labor
hour.
But I think as an industry it'sone of those items that,
because labor costs have gottenso high, we have to get more
productivity out of the laborbase that we have.
Speaker 2 (03:00):
These new operating hours allow for them to focus
harder on the times when they'reopen.
It's also provided space forspecial and corporate events
which are profitable from thejump.
Speaker 1 (03:08):
You have so many reservations, but then you're
also kind of hoping that peopleare going to walk in, so you're
kind of waiting for this other40% of the business, of what's
going to happen.
And what this does a lot of usis Tuesday through Saturday.
We've concentrated because we dohave a loyalty program We'll
talk about that later so we dohave pent up demand for our
restaurants, but we basicallyhave just really moved those
(03:30):
counts into a five day insteadof seven days and so if you look
at overall counts, it hasn'tdropped, it's actually just
compressed.
So that makes those days muchbetter.
And then the awesome part ofall of this is we created space
on those Sunday and Monday, aswell as during lunchtime, to do
(03:51):
special events, to do corporatelunches for 100 people, to do
buyouts of the restaurant, whichgive you profitable business
every time you do them.
So again, you're not openingthe door and hoping and praying
as a strategy that you're goingto get enough people in, and so
(04:13):
it's just.
It's been fantastic and I thinkthe yeah, so that you know
that's just a big piece of beingable to create those
opportunities where maybe wewouldn't have been able to take
100 top or 150.
Or people wouldn't think of us,but we're now competing with
the hotel spaces during thedaytime.
Speaker 2 (04:32):
Now, maximizing productivity does not mean just
squeezing the most out of youremployees that you do have.
If anything, it's allowed for abetter balance and it's let
fire and fine double down onexperiential service like table
size, caesars and bananas fosterthat light up the dining room.
Speaker 1 (04:47):
And when I say productivity of trying to
maximize, it's not aboutmaximizing the productivity,
it's about where's the balance,and so what we look at is is it
great for the guests, is itgreat for our team and is it
financially sustainable to do?
We're experiential restaurants.
That is one of the things thatwe've got to deliver on that.
(05:10):
We do table site Caesar, wecarve Chateau Brionnes, we do
Bananas, Foster and all ofthat's done in front of the
guest, Whether it's the serverdoing it or one of our tuxedoed
captains.
But what we've done is we'veactually upped the game.
We do more table site now inevery one of our restaurants
than we ever did before, Becausewe want to maximize the
(05:33):
experience, not necessarilyrevenue, not necessarily
productivity.
It's making sure that you are,that you understand where your
sales productivity needs to beto be profitable.
We talked about sustainability.
A lot of that is aroundfinancial sustainability.
Could we keep doing what we'redoing?
Our team has added table site.
(05:57):
While everybody is strippingdown service, we're actually
adding additional stuff, whichis cool.
Speaker 3 (06:03):
You never left for you guys, right, you're doing it
more.
You're doing it more.
Speaker 1 (06:07):
Yeah, we added Steak Diane to our Goucho menus, which
is a fun table site steakoption, Things like that.
It's really cool to be able todeliver for a guest and just
show them.
Hey, we're not like everybodyelse, we're actually giving you
more, we're doing some morerazzle-dazzle, we're having some
more fun not taking away thingsbecause we're trying to cut
(06:32):
costs everywhere.
Speaker 3 (06:33):
Yeah, absolutely.
That's one of those things tooin the dining room that just
invites people to.
I want that too.
It's like the easiest possible.
Speaker 1 (06:41):
Yeah.
As soon as the first bananafosters lights up and the smell
hits the room, people are likewhat is that?
The flames are going and yeah.
Speaker 2 (06:50):
But when your servers are performing duties, normally
observed for the back of thehouse, how does training work
exactly?
Spoiler, it can be intense.
Speaker 1 (06:58):
Because of our service level, the servers can
only handle so many tables.
When we bring a new person in,they're going to go through 10
days of really intense training.
They're going to go throughfront desk.
They're going to see thekitchen expo and then they're
going to work with an individualserver that does training on
that.
They won't even get a tableuntil after that 10 days and
(07:21):
then they'll start with a table.
Then they're going to build totwo, then over time they'll
build to three.
We say it takes about six monthsto make a server feel pretty
good not super confident, butpretty good because they have to
master the menu, which isn'tthat hard, but you still have to
(07:44):
do all those things.
You have to master all of theplay settings, all of the mes
and plus all of the table sidethat the servers involved with,
which the Caesar salad would bea big one.
We make millions and millionsof Caesar, so you just get
really good at it.
They take time to build up.
(08:04):
As you get busier and you doturns, then we're adding in
support teams to help them onthose turns.
We need them to ring a certainlevel so they can make money
Then to turn those tables andyou start adding in additional
busters, food runners, othersthat help on that productivity
(08:26):
side for that next level ofrevenue.
If you only do one turn tonight, you don't really need a busser
.
But if you're doing a coupleand you've got a lot of action
going, then that's where theystart to pay for themselves.
Speaker 2 (08:42):
I also wanted to understand how Fire and Vine
measures, labor productivity andstaff have such a narrow focus
and fewer tables than mostrestaurants.
Speaker 1 (08:50):
Yeah, I think right now, if I just look at a
trending number, I want to besomewhere around the 110 mark,
so $110 per direct labor hour.
Depending on what's happening,we can see that all the way up
to 200.
So if we have big privateevents, but for all the car,
(09:10):
probably around 130, 140 meanswe've got a lot of turns going
or we went a little too tight.
Again, that's an indicatornumber versus a absolute number
of what people need to do.
So at the end of the day,you've got that.
And then you've got yourreviews Right.
(09:30):
So we get a lot of onlinesubmissions through.
We happen to use seven roomsfor our reservations, so we get
hundreds of reviews a day, andso that's part of did we break
the restaurant last night?
Right, and sometimes you breaka restaurant it does happen.
It just gets beyond where youcan deliver.
Speaker 2 (09:53):
It's not always about hitting a number, though McKay
acknowledges that it's not ascience, and some things are
just done based on therestaurant's core values.
Speaker 1 (10:01):
What we look at is we got to make sure our people are
making money Right.
So it's like if you haveservers that are only ringing
$1,000 and they need to beringing two or 3,000 to make the
kind of money that should wellpart of that staffing like are
we starving people versus givingthem opportunities to create
revenue?
And then the other is it's thesupport team needed to help
(10:24):
sustain that, because the serverreally becomes a primary
element of our restaurant.
And then our captain layer,which comes and does the table
side and the wine, but alsocaptures and supports the
service team.
You know, if they get stuck ona table, that's super talkative
or it's taking a while.
They could just blend over andgrab their other table and take
(10:47):
them to the finish Right.
So we go back and again, if youlook at our purpose, it's we
revel in celebrating life, andso if you do that and you figure
out how are we going to do thatfor this party and then you
take some decision criteria,which is is it great for the
guests, is it great for the teamand is it financially
sustainable?
(11:08):
And if you can answer yes tothose three questions, just get
her done Right.
And also, you know our credo.
We have a series about 28different things that we go
through that are behavioralstandards and one of them is we
start with yes.
So when, when somebody'swanting something, we start with
yes and then we let them knowhow we can do that.
(11:29):
Versus walking into arestaurant or calling and
they're like we're fully booked.
I'm like I I've been to acouple fully booked restaurants.
Most restaurants, even busyones, are not fully booked.
If I walk in at 515 and youneeded the table back at 645, we
got a deal.
You just have to start with yes, we'd love to get you in, but
(11:51):
we have the table back at 630,you know so.
So I don't know if that thatgives you a couple of ideas, but
that that those are the thingsthat we're focused on.
We don't sit there with ascorecard of you know you got to
hit 110.
That's like at the end of themonth, like let's see where
we're at during the week andjust know you know if, kind of
(12:12):
day to day, where that number is.
So it's just a good indicator.
Not the marching orders.
The marching orders is Revealin SolBringLife.
Speaker 2 (12:23):
Take it a quick break to share an exciting update
from SevenShifts.
Usually I don't do this, butour users have been waiting for
it for a long time.
I know I don't have to tell youthat running payroll is a
lengthy manual process Dataentry, multiple systems, cross
referencing, triple checking soI'm excited to announce that
SevenShifts payroll is nowavailable in the United States.
Now you can schedule youremployees, manage the time clock
, calculate tips and pay yourteam in one app, and when you
(12:45):
make the switch to SevenShiftspayroll, your first three months
are on us.
Now it's time for the bigquestion.
The commission model forservice Commissioners is common
in industries like auto sales,retail real estate, but it's not
all that common in hospitality.
But Fire and Runt is found away to make it work.
Give staff an opportunity toearn high above industry
averages.
I'll let Chad explain how itworks.
Speaker 1 (13:06):
We stumbled upon a new way to really think about
how we pay our employees, how wepay our servers primarily, and
that was to implement a servicecharge across the board.
So, no matter party size, wejust do a 20% service charge and
a 22% for booked contractedevents and then we pay, instead
(13:31):
of trying to divvy that out as atip and do all these different
things that other people do ortrying to figure out well, how
do we pay everybody $30 an houror all this kind of stuff?
We started with the premise andI sat in front of our teams and
stood in front of them andtalked about it.
This is not a front of thehouse, back of the house war.
That's not a war we're in, norwas it a war we were ever about.
(13:56):
I paid my back of the houseteams well then.
I pay them well now, and that'sa different career path.
I love my servers, I love thesales team.
They execute and deliver to theguest, and without them we
don't really have a businessbecause we won't have the guests
.
And so what we did is we tookthe model that was this tip out
(14:21):
model, where really the serverwas keeping about 12.5% of their
sales as tips for them.
The rest of it was gettingtipped out to expos and front
desk and bussers and captainsand the wine steward and all
that kind of stuff and we putthem on a 15% commission.
(14:42):
So not the service charge.
Service charge is a differentdeal.
But their commission sellspeople.
Now If they sell it and wedeliver and we don't take it off
the bill for you know, forreason, like we burn a steak or
whatever those types of thingsor we messed up, then they get
paid.
It's not to the whim of theguest, it's not you know that
(15:04):
side, it's your professional.
You get paid with what you sell.
And if the customer, if ourguest, wants to leave an
additional amount, they'rewelcome to.
But it is not asked.
But we do allow that.
We will accept that becausethere's some people and I've
(15:26):
been in this situation where Iwent to a restaurant I wanted to
take care of.
There were some other placeplaces that were doing a service
charge, but then they, theircompensation model was totally
different and I wanted to leaveas extra as our server just did
an awesome job and they're likeyou can't, like wait a minute, I
can't.
I actually want to leave somemore money.
(15:46):
We don't have a way.
I'm like, well, ring a dollarup and let me tip, or you know
something, so.
So leaving that out, I think, isit's it's an area where other
places have struggled.
What we want to do is want totell our guest we're going to
deliver for you and we've beendelivering for 25 years, 26,
(16:08):
almost 26 years now for ourcorporate clients that have
always paid a service chargeRight.
A third of our business hasalways had a service charge and
now the other two thirds does aswell.
And if we, if we don't make itright, then we, we eat the bills
Right, just like you do onother things.
(16:29):
So, and then this is I have aDJ.
I think this is something thatwas a surprise, but, looking
back on it, I didn't realize howpoor the restaurant industry
did of marketing people that hadnot worked in our business.
When you have a job postinglike this, come work for us.
(16:51):
It'll be minimum wage plus tips.
You'll be a bus driver.
You'll, minimum wage plus frontdesk, be a runner, minimum wage
plus tips.
Well, if you've never worked inour industry, what does that
mean?
Speaker 3 (17:05):
Right.
Speaker 1 (17:05):
Right, and it was actually talking to a front desk
person that had been hired atour Bellevue location and she
had been on the job about fourmonths and I was asking how it
was going and this has prioredus switching to this service
charge commission model in thisnew way of compensation and
(17:25):
she's like oh, it's fantastic.
She had come from Nordstromsand she's like I just love it
here, people are awesome.
I said, how's the money?
She's like oh, it's great, youknow, I make.
I think at this time it waslike 14, 15 hour.
And then I make five or sixbucks an hour in tips.
She goes, but I don't countthose because I can't count on
them.
And I was like okay, so youmake 21 an hour and you don't
(17:52):
count on that, even though forfour months you've made $21.
And I just realized, if you'renot in this business, we do a
disservice to ourselves.
And so when we switched ourservers to commissions, we
actually switched all thesupport teams which were our
really entry level points.
We converted them to hourlyrates.
(18:14):
And so all of a sudden, ifyou're a bus or 22, 25 an hour,
that's guaranteed You're notwaiting for a server to pay you
out.
We could advertise for frontdesk and start them at 20 bucks
an hour.
Again, this is seven years ago.
That was kind of unheard of,but that's what people were
making in our restaurant, and sowhen I look at labor, at the
(18:41):
end of the day I want us to win,I want our teams to win, I want
our restaurants to win, I wantan unfair advantage over other
places.
I don't care about the otherplaces, I want us to win.
So in the advertising game andthe marketing game of entry
level, we've won.
Speaker 2 (18:59):
In detail, the servers make a set base wage
with the commission on top.
Speaker 1 (19:06):
Typically there's a base wage and then the
commission, so in essence 15%.
Sometimes it's a littledifferent or it's an hourly rate
for a couple of events.
So it's a base wage pluscommissions, plus any additional
bumps that they get are 100%.
There's no credit carddeduction and no tip out to
anybody else.
So those three components.
The average server is somewherein that $60 to $90 an hour, but
(19:32):
we have servers up into $110,$120 an hour in terms of
earnings, between all of thosethings.
Speaker 2 (19:41):
But the drastic switch like this, especially
when compensation is concernedit may alienate some longtime
staff, which it can admit was afear, but it has had a positive
impact on how employees work intheir day-to-day.
I think one of our mostimportant things is that we have
a lot of people who are workingin the same field.
Speaker 1 (19:57):
I think one of our longtime servers.
He's 22 years, 23 years.
I was asking him how it wasgoing.
This is six and a half yearsago, so after about six months
and he's like I have neverrealized how much I prejudged
tables until I didn't have to.
All I got to do is practice mycraft and I get paid right Take
(20:25):
care of the guests and if I doit exceptionally well, I might
get a little extra.
If not, I don't have to worryabout preconceived notions.
Are they international travelers?
Like I get paid and I love thisjob and, yes, compensation is
part of, but I don't have toworry and run over and look at
the check to see if they left meanything or do an autograt
(20:47):
under the old deal.
And so he's like it's so muchmore relaxing to take care of
the costs.
People not worry.
Is this table even going to tipme?
Like I get three tables tonightand this one might stiff me.
So.
And then one of our veryveteran servers.
She was with us 23 years untilshe retired.
(21:10):
At the end of the day she waslike yeah, why didn't we do this
20 years ago?
She's like this is the bestthing going that was what my dad
said too Because it justchanges the dynamic.
Speaker 2 (21:23):
And they also didn't find that it led to any
attrition.
If anything, a lot of staffregret not doing it sooner.
Speaker 1 (21:28):
We didn't lose a single server when we converted
everybody Like to me.
That's, that's the.
The pudding, you know, that isthe proof is when we switched
over, are we going to lose our,our senior servers?
Speaker 3 (21:42):
People that have been there for a long time.
Speaker 1 (21:44):
Yeah, and, by the way , that's the last thing I want
in a in experiential restaurantwith longtime clients.
And so that's why I think someof the other restaurant tours
that have done some of thesedifferent models, they've they
lost sight of the fact that partof their restaurant is their
service staff and, yes, there'sthe cooks and you need to take
care of them, but, man, youcannot balance the P and L off
(22:08):
of your servers.
Speaker 2 (22:10):
Now McKay is working to help other businesses follow
the same model of paying theirteams, among other things with
his new company, brigado.
Speaker 1 (22:17):
Brigado's art was an in-house kind of a captive IT
company that we started aboutsix years ago and that has now
morphed into, you know, a wholenother company that is
delivering tech support servicesand projects and POS management
, network management,cybersecurity, those types of
(22:38):
things, specifically in thehospitality space.
We do take care of a companythat has a lot of clients as
well, and so that has been oneoutlet that I have done some
consulting and more speakingengagements around, and so you
know some people are open to itand some people are not.
(22:59):
We in the very beginning wetold everybody what we were
doing, we showed them how to doit, and I think we've talked
with 50 restaurant tours inPortland and you know, at the
end of the day nobody else didit.
Or if they did it in Seattle,they they were trying to peanut
butter around, they lost theirservers, and so again, I learned
from other restaurants thatwhen I say they declared a war
on their sales teams, theydeclared a war against their
servers, trying to balance theirbusiness On their backs, and to
(23:28):
me that's not fair.
Speaker 2 (23:36):
Thanks for checking out this episode of the pre
shift.
If you enjoyed this one, leavea review and share it with one
friend to help the show growCould not do without your
support.
As always, I'd love to hearwhat you think.
You can email me at dj at sevenshiftscom.
You can also find greatinsights like these on the seven
shifts blog and on all of oursocial channels.
Catch you next time.
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