David Chang: Restaurants need a 'kick in the ass'

American restaurateur David Chang had a great piece in GQ recently, in which he talks about the business struggles restaurant operators are facing. Everything from losing talented chefs, paying staff a fair, livable wage and what this will mean for the future of the restaurant industry.

We've highlighted some passages from Chang's post below. Be sure to read the entire story on GQ.

On losing back of house staff

The longer chefs look at restaurant math, the less it adds up for them. A few years ago, the only option was to be a private chef. Now you can work in all kinds of food businesses. I just heard that John Adler, the chef at Franny’s in Brooklyn, left to join the food-delivery service Blue Apron. I hear about moves like this all the time.

It's not surprising. Not when the median hourly wage of a server is roughly double that of someone working in the kitchen. It's a wage gap that's causing a rift in the industry, according to ROC United. At a median of $13/hour, they can make a better living in a lot of other industries -- or they'll leave the kitchen to become servers.

We wrote about two Boston-area restaurant operators who are getting creative in their attempt to retain their kitchen staff and keep them happy, but there are other ways operators can retain their best workers. It sometimes takes creative problem-solving.

On paying staff a livable wage

At my newest place, Nishi, there’s no tipping; service is included in the prices on the menu. This allows restaurant owners to remix the way their “service” charges are distributed to their staff, which we gotta do if we’re going to hang on to the best kitchen talent.

The no-tipping experiment has mostly taken hold on the coasts of the US and in larger cities where the cost of living is high. Even so, it's getting talked about more and more and by larger industry personalities like Chang and Top Chef Tom Colicchio.

What life after tipping is like for restaurants has varied. Many who have gone the no-tipping route have done as Chang mentioned -- tack on "service" charges that can be distributed to the entire staff. Tipping pools are hit or miss, depending on where you live in the US.

On having to raise menu prices... whether diners like it or not

Our bowl of Momofuku ramen should cost $28. That would cover the true cost of the “food” plus a reasonable (and not remotely greedy) margin. I put “food” in quotes because every tiny part of a restaurant is in the cost of that dish, from dripping faucets to broken plates. But you know what? I sell that ramen for $17, because if I charged $28, people would say it’s too expensive. It’s on us, as restaurateurs, to get better at running our businesses (and break fewer plates), but the bottom line is that food needs to get more expensive for you, too.

Raising prices is the one thing restaurant operators don't seem to want to do. And it's not surprising. No one likes to see prices go up and higher prices can leave restaurants at a competitive disadvantage. But know what is even worse? Being out of business. Profit margins are already pretty thin for restaurants and bills aren't going to get any cheaper either.

You might be able to scrape by now but, depending on your market, raising prices might be inevitable soon.

Chang also spoke to TIME at the Time 100 Gala recently where he had some strong words for the restaurant industry.

We need a kick in the ass. Restaurants aren’t going to go away, but it will be difficult for independent purveyors to operate the way things are.

Lots of places are going to close. Only then will things start to change—both for restaurants and diners.
— David Chang, Founder, Momofuku Restaurant Group

What do you think? Is menu price raising inevitable soon for your establishment? How are you handling kitchen staff retention? Let us know in the comment section below or email us.