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Ford’s Garage may be reconsidering a controversial policy that automatically adds a 20% service charge to customers’ checks at select Florida restaurants, with the chain’s president acknowledging that some diners are unhappy with the mandatory fee.
In an interview with Digital, Billy Downs said the policy, which is being tested by one franchisee at five Florida locations, remains under review.
“I think that we need to listen to the consumer on those things, to be honest with you,” Downs said. “So, we are, and we may be encouraging a change to that program.”
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Marc Brown, president of franchisee 23 Restaurant Services, told Digital the program has been largely successful, resulting in higher wages for employees without alienating most customers.
“Our servers in the locations that run our service charge program are making significantly higher average hourly pay than our servers and bartenders in locations that do not have it,” Brown said.
A Ford’s Garage franchisee in Florida (not pictured) has an automatic 20% service charge on all checks in lieu of tipping. (Peter Burke/ Digital)
The policy is part of a team service model introduced by 23 Restaurant Services, which operates Ford’s Garage restaurants throughout Florida.
Rather than relying on traditional tipping, the model automatically adds a 20% service charge to each check to support a commission-based compensation structure.
Servers and bartenders earn commissions based on sales, while the model is also designed to provide more equitable compensation for kitchen and support staff, according to the franchisee’s website.
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Additional tips are optional.
Downs said the experiment was intended to explore whether a different compensation model could help control costs while rewarding employees for their service.
“It certainly was a test to see if this can help keep the cost down to the consumer, as well as reward the server,” he said.
Billy Downs, president of Ford’s Garage, told Digital the company “may be encouraging a change” to the test program. ( Digital)
The Ford’s Garage location in Plantation near Fort Lauderdale is among the restaurants that have implemented the policy “in lieu of a traditional gratuity,” according to its website. That location also adds a separate 1% entertainment fee assessed by the shopping center.
“This fee is passed directly to the retail center, is not a gratuity and is not retained by Ford’s Garage or distributed to employees,” the website states.
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Brown said the service charge is disclosed to customers multiple times verbally and in writing before they order, giving them the choice of whether to dine there.
“So, to us, it’s no different than just charging a higher price on the menu,” he said.
Most guests aren’t bothered by the fee, Brown said, “because they like the Ford’s Garage experience.”
The president of 23 Restaurant Services said most customers aren’t bothered by the fee “because they like the Ford’s Garage experience.” (Peter Burke/ Digital)
But Downs acknowledged the policy has produced some controversy.
“There’s been some big wins, and there’s been consumers that just do not want to pay a service charge,” he said.
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The experiment comes as restaurant operators grapple with rising labor costs and changes to tipped minimum wages.
“But the biggest pushback is people don’t want to have a mandated service charge, and I get it,” Downs said. “You know, I’m not sure I want it either in certain times.”
“We have not made any decisions, but we talk about it regularly.”
Brown, however, said the criticism appears to come from a relatively small percentage of diners, noting that most participating restaurants have experienced year-over-year growth after operating under the model for multiple years.
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He also rejected the notion that an automatic service charge diminishes a server or bartender’s incentive to provide quality hospitality, saying employees are expected to “provide great service to every guest regardless of what they expect to get in terms of additional tip.”
Under the model implemented at select Ford’s Garage locations, tipping is optional. (iStock)
Founded in Fort Myers in 2012, Ford’s Garage has grown to 36 restaurants across nine states. Downs said the chain has prioritized affordability, with an average customer check of about $26 and weekday value meals starting at $10.99.
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Downs, who previously spoke to Digital about the chain’s emphasis on old-fashioned hospitality, said providing consistently good service can help address customer concerns.
“If you give great service all the time, that can help to eliminate problems,” Downs said.
As for whether the service-charge policy could change, Brown said discussions are ongoing.
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“We have not made any decisions, but we talk about it regularly,” he said.
