Fees Added To Eating Out

(WINDSOR, ON) – Chuck’s Roadhouse, with one outlet in Windsor and a second planned, says it is changing the way restaurants do business. It has introduced, what it calls, an Honest to Goodness fee, which is added to each customer’s bill before sales taxes are calculated. While new to Canada, restaurants in the United States are also adding surcharges.

Currently, the Chuck’s surcharge stands at 3% and is a tactic the franchise chain says it is using to avoid raising food prices. On its website it explains the fee as the only way it can, “… continue providing fresh, fabulous food at incredible prices,” is to, “… add 3% to all our prices. Don’t panic, it’s really not a lot.”

The eatery says that if it is, “… being honest then we need to tell you that for us to continue offering great deals, then something has to give … and we definitely don’t want it to be our quality.”

In its defence, it claims the fee is, “… much less than if we raised our prices. We are truly hoping you understand why we are doing this. It is to provide you with the value and ‘goodness’ you have enjoyed and deserve, honest.”

The company says raising prices equal to the new fee would be problematic and not give it the flexibility to manage its food purchasing and menu items. As well, it is a way to approach, what the restaurant calls, the increasing costs in its industry.

The company operates throughout the province and has locations stretching from Napanee to Windsor. Its pitch to potential franchisees says it is revolutionizing the restaurant business by taking, “… existing locations with equipment, transition them over with our unique in-store accents and provide you with a fully operational restaurant you can afford. We offer potential franchisees the most cost efficient way to start their own business and get into the exciting restaurant industry!”

Commentators on Trip Adviser are not exactly praising the benefits of the fee. One person wonders about the next fee, suggesting it could be a, “… you breathed the air in here while you were here tax. There are other places to go, that don’t charge a fee like that.”

Another called it a snuck-in random fee. Many other non-complimentary comments appear on Trip Advisor and other review websites, mostly from customers not happy with their experience.

Chuck’s is a unit of hospitality management company Obsidian Group, and opened the first Chuck’s in 2015 in Kincardine, ON. Obsidian says it avoids, “… the added expense of large marketing budgets” which allows it to make food, “… at the highest quality while providing exceptional customer service.”

In the United States, beginning May 1, Tres Gatos, in Jamaica Plain, MA, standardized on a 3.75% surcharge called a hospitality administrative charge. Owners David Doyle and Maricely Pérez-Alers, in an open letter to the hospitality industry, claimed their action is not new or unique.

“We are proud,” they wrote in the letter, “to report that there are now many other restaurants embracing a similar change to their business models.”

The fee will help the restaurant to pay its, “… back of house kitchen staff more fairly in relation to the rest of our team. The disparity between front of house and BOH compensation has been growing for many years. What was a gap 25 years ago has become an abyss, and it will only continue to widen.”

Doyle and Pérez-Alers added speculation that, “… within 5 years the majority of restaurants will have adopted some measure to address this critical issue. We are choosing to do so for the benefit of our BOH team, and because we would like to be agents of change.”

Such fees are illegal in some US cities, including New York. However, as Fox News 5 reported on March 7, a movement is under way, led by Amali Restaurant’s James Mallios, to have the right to charge a 3% administrative fee. He says it would be used to better compensate BOH staff.

New York restaurant owners appear to be divided. Some would like the 3% while others suggest a mandatory 20% fee, which would include tips.

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Robert Tuomi
After initially succeeding as a broadcast journalist and achieving senior level assignments, Robert branched out into marketing communications. As a senior executive, primarily in the high-tech industry, Robert created award-winning and comprehensive, multi-faceted initiatives to enhance sales and expand market awareness for some of the largest companies in their fields. Email Robert Tuomi