Even High-End Restaurants Are Embracing Counter Culture
The food may be upscale, but you still have to line up at a counter to order it.
Good Morning!
Here are today’s highlights:
Do you have a policy regarding office romances?
What if you let employees pick and pay for their own health insurance?
Don’t sleep on the Corporate Transparency Act. It’s still in effect.
Now private equity firms say they want to help college athletic programs.
BUSINESS MODELS
Some upscale restaurants are asking patrons to order at a counter: “You wait in line at the front of a restaurant to order a great bottle of Malbec or a crisp branzino filet, then sit down. The food is higher-end, but the menus are small. Food arrives in courses using formal plates. Wine gets poured into proper stemware. Restaurants like Birdie’s are betting on that high-low approach. Diners see perks and quirks of this new setup. Some like not vying for reservations while eating top-notch food at coveted eateries. They can still flag down restaurant staff to answer questions or order drinks. Others say it’s annoying to wait in line to order at the counter and would rather have a more formal dining experience.”
“To get beef tartare or snapper at Birdie’s, don’t expect a server to approach your table. You’ve got to make the first move by ordering at the counter and paying for your meal, tip included, before you even sit down at a fully decked-out table. ‘We treat the counter as the first interaction at a fine-dining restaurant,’ says Arjav Ezekiel, co-owner and beverage director of Birdie’s in Austin, Texas.
“Those new to Birdie’s spend about five minutes at the counter talking with a staffer and learning about the food and wine pairing options. The goal is to add a personal touch while slowing down orders, which keeps the kitchen from getting overwhelmed. The restaurant, which opened in 2021, has tweaked its model as business has grown. It has hired additional staff to roam the floor and take follow-up orders at the table rather than asking people to get back in line.”
“Restaurateurs say the model lets them deal with continuing labor shortages and tight margins and offsets today’s higher food costs. Prices are often not any lower without traditional servers. In Los Angeles, diners at De La Nonna are led to their table by a host and then asked to return to the counter to order.”
“A smaller crew of roaming staffers approach diners throughout the meal to take cocktail orders and drop off dessert menus. Limiting the number of staff in the dining room allows the restaurant to pay workers more and offer health insurance to full-time staff. ‘We run a leaner team, so everybody makes more money,’ says Zaremba.” READ MORE
HUMAN RESOURCES
Office romances are on the rise, especially among Gen Zers: “When employers rolled out RTO policies, they prepared themselves for pushback from employees. What they may not have anticipated is unintentionally playing match-maker for their in-person workforce — particularly their young talent. Thirty-three percent of younger millennial and Gen Z workers said they would be open to dating within the workplace, compared to only 15 percent of older millennials, 27 percent of Gen X and 23 percent of baby boomers, according to a report from SHRM. And while a potential uptick in office romances may seem harmless at first, it could spell trouble for companies hoping to keep their environments drama — and most importantly, risk — free. “
“Workplace relationships create a fair amount of exposure as an employer that can be very difficult to mitigate and control,’ says Chris Williams, employment practices liability product manager at insurance company Travelers. ‘I don't mean to sound anti-romantic, but that's a very real concern.’”
“But employers should think carefully before they impose a ban on office relationships altogether. In fact, 64 percent of employees agreed that there should not be a formal policy that prohibits them from dating colleagues, but 78 percent said employers should provide guidelines on how to handle workplace romances.“ READ MORE
Remote-work opportunities are declining: “The high-paying remote and hybrid jobs that were common in the aftermath of the pandemic are vanishing as employers increasingly require in-office attendance in exchange for high salaries. Only 4 percent of jobs in 2024 that pay more than $250,000 a year are available as fully remote and just 1 percent are classified as hybrid, according to research from high-paying jobs website Ladders. That’s notably less than a year ago, when 10 percent of these jobs were remote and 6 percent were hybrid. The change comes as employers and employees alike are shifting their perspectives on in-office work and at a time when companies are gaining leverage in the hiring market.” READ MORE
HEALTH INSURANCE
Would it be cheaper to let employees pick and pay for their own coverage? “Many employers are at a loss about how to reduce healthcare costs for themselves and their employees. But does that mean they should give up their health plans for an alternative model? Meet individual coverage health reimbursement arrangements, or ICHRAs, a model in which employers reimburse employees for some or all of the premiums employees pay for the health plan they buy on their own. According to the HRA Council, the adoption of ICHRAs grew by 29 percent in the last year, with employers turning to companies like SureCo to help administer these relatively new plans.”
“Under SureCo, every employee can theoretically buy their own plan directly from insurance carriers, while the employer agrees to help pay for a certain portion of the plan cost; SureCo would also help with enrollment and benefits management. Notably, this model places more responsibility on the employee to research and choose the right health plan — but Erik Wissig, the chief operating officer at SureCo, doesn't necessarily think that's a bad thing.”
“‘Carriers have been working with companies to accommodate broad groups,’ he says. ‘Allowing employees to shop and directly select plans created for individuals allows them to identify what fits them the best.’ This means employees would be choosing from over 5,000 plans from 140 different carriers. While SureCo does help employees narrow down what would fit their health and circumstances, employers would need to ensure employees have the tools and time to actively engage in enrollment.”
“SureCo has saved its clients up to $1 million in premiums and increased employee plan participation by as high as 60 percent, according to its case studies. Wissig notes that under ICHRAs, it's harder for carriers to pin companies down with large premium increases. ‘Premium pricing is based on the employee group itself and the claims they incurred, so pricing can dramatically vary year to year,’ says Wissig. ‘By moving away from the group model, it broadens the risk pool the individual employee is in, providing a more stabilized market.’” READ MORE
REGULATION
Gene Marks reminds business owners that the Corporate Transparency Act is still in effect: “A new law may require business owners to share more information with the federal government — and if you fail to comply, you can face fines of $10,000 per violation or even criminal charges. The legislation, known as the Corporate Transparency Act, went into effect this year and is likely to impact millions of small businesses. ‘The law’s intention is to combat illegal activities and help to find bad actors and criminals that are potentially hidden behind corporate shell companies’ said Alex J. Phinn III, an attorney with Pritchard Law [near Philadelphia]. ‘It affects the smallest of companies, and that’s been a surprise to many of our clients.’”
“Impacted businesses will need to report the company’s legal and trade names or its ‘doing business as’ name and street address. Post office boxes are not allowed. The state where the company was formed and relevant tax and employer identification numbers are also required along with an image of the articles of incorporation. Proprietors also have to disclose who owns the company, including ‘beneficial owners.’”
“Recently, a federal court in Alabama upheld a small business association’s claim that the law ‘exceeds the Constitution’s limits on the legislative branch and lacks a sufficient nexus to any enumerated power to be a necessary or proper means of achieving Congress policy goals.’”
“However, the case was not a class-action lawsuit, so it only impacts the approximately 65,000 members of that association. That means all other businesses are still responsible for reporting their beneficial owners. The Treasury Department is appealing the ruling and says it will continue to require the remaining 32 million small business entities to report their beneficial ownership as planned.” READ MORE
ACCOUNTS RECEIVABLE
When a big business fails, smaller businesses inevitably suffer, too: “For 20 years, Red Lobster Seafood Corp. paid its bills on time, said Dan Charles of Affordable Discount Signs in Longwood and Sanford. The Seminole County [Florida] business owner had the nation’s largest seafood restaurant chain as a steady client for two decades, but recently, things fell apart. Unpaid bills have lingered for three months. ‘When somebody owes you about $7,000, that has an impact,’ he said. ‘Hopefully, they’ll pay.’”
“The small business owner didn’t know Red Lobster had filed for bankruptcy when he spoke with Orlando Business Journal on May 20. That may be the case for more of the 300 local companies Red Lobster has listed among its creditors in a document filed on May 19 with the U.S. Bankruptcy Court for the Middle District of Florida.”
“Busy dealing with the day-to-day, hands-on demands of their small businesses rather than focused on the latest news, many don’t have attorneys watching the Red Lobster reorganization case for them.” READ MORE
TRADE
Trump’s proposed tariffs would cost Americans $500 billion a year: “Researchers at the Peterson Institute warned Trump's planned taxes on imports could end up being a huge burden on working-class Americans. The former president's plan to impose a 10-percent tariff on all imports could end up costing consumers nearly 2-percent of U.S. GDP, or an additional $500 billion a year, they estimated in a new paper. That's about five times the cost of Trump's tariffs in 2018, when he imposed taxes on imports of steel, aluminum, and other goods. The plan would hit lower-income households harder, the researchers said.”
“Economists generally agree that tariffs raise the cost of goods purchased domestically. That's because taxes on imported goods are often passed onto the consumer as producers raise prices – similar to a ‘one-time burst of inflation,’ the paper authors said.”
“Trump's tariff plan also includes a 60-percent tax on Chinese imports, but even a 10-percent, across-the-board tariff would be the equivalent to an annual $1,500 consumption tax per household, according to an analysis from the Center for American Progress.” READ MORE
PRIVATE EQUITY
Now PE wants to roll up college athletics: “A new business called Collegiate Athletic Solutions, led by RedBird Capital founder Gerry Cardinale, plans to invest $50 million to $200 million apiece in a select group of universities, Cardinale said. CAS is a partnership between RedBird and Weatherford Capital, founded by former Florida State quarterback Drew Weatherford, who is also a member of the school’s board of trustees. They say they will invest in five to 10 schools to start and are in talks with dozens more, including members of every power conference. This isn’t a case of private investors looking to buy equity in an athletic department—a 10 percent stake in the Georgia Bulldogs isn’t for sale. It isn’t a debt instrument, either.”
“Instead, Cardinale says, the idea is to build businesses that help monetize a school’s intellectual property and provide them with the advice and capital to do that at a time when the stakes have never been higher. ‘Capitalism is finding everybody,’ Cardinale says. ‘This is about partnering with universities and athletic departments and helping them grow their sports business.’”
“CAS is launching at a seminal moment. Schools accustomed to relying on free labor will soon have to dedicate big portions of their budget to player pay, under a settlement of litigation brought in federal court in California challenging NCAA restrictions on athletes profiting from their name, image, and likeness.”
“The idea is that with Cardinale and Weatherford’s capital and expertise, they can help grow the bottom line for athletic departments. Then, when they do that, CAS gets compensated by helping generate those additional future dollars—almost like a royalty, Weatherford says. They see opportunities not only in the sports that traditionally have made the most money, football and men’s basketball, but also the ones that are often subsidized by those revenue drivers.” READ MORE
THE 21 HATS PODCAST
How to Waste Money on Marketing: It’s easy! Anyone can do it! This week, Shawn Busse, Jaci Russo, and William Vanderbloemen talk about a whole slew of marketing challenges. From strategizing for trade shows, to whether your logo has to tell a story, to understanding what constitutes a brand, to whether that iPad ad Apple pulled was terrible or brilliant, they discuss what makes marketing so difficult. It all starts, Jaci says, with the industry’s refusal to set standards: “I can't find another industry that treats themselves so badly. Electrician, CPA, Realtor, hairdresser, nail salon tech, everybody else has some semblance of something to say, ‘I am a legit entity.’ Except our industry.” Which is part of the reason, Jaci says, that the constant refrain she hears from frustrated business owners who hire agencies is, “We paid them all this money. And we got nothing for it.”
Plus: how do owners get past that feeling that they need to be the hardest worker in the office, the first one in and the last one out?
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
Thanks for reading, everyone. — Loren