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Barter Is One Answer For Restaurant Owners’ Challenges

January 24th, 2008 · by Bob Meyer · 8 Comments

While enjoying a good cup of coffee this morning at the Amsterdam Coffee House I found the comments of Michael Sanson, Editor-In-Chief of Restaurant Hospitality most interesting.

According to Sanson, despite ever-rising food costs, many restaurant owners feel the availability of labor and related immigration laws will be their top worry in 2008. Especially the dwindling supply of experienced line cooks.

Further complicating the situation is the “top chef phenomenon” where television shows like Bravo’s Top Chef and the Food Network’s Iron Chef have romanticized the profession of cooking. Young kids are entering culinary schools (to the tune of $60,000) and then discover when they graduate that the real job of cooking is long, hard work for a modest wage. (And the probability of becoming the next Bobby Flay or Wolfgang Puck is rather slim.)

The San Francisco Chronicle recently detailed the environment for young, hard-working cooks struggling to make it in a big city on a wage of $10 to $15 an hour.

And San Francisco restaurant operators struggle because of minimum wage laws, sick leave requirements and health insurance mandates. Servers earn a minimum wage of $9.14 an hour plus tips. But the line cooks don’t get the advantage of tips, and are essentially frozen at the wages paid, due to minimum wage mandates.

A new health insurance law will require restaurants with 20 or more employees to provide health insurance–including part time workers.

Some restaurants are offering cooks the opportunity to work one or two shifts a week as servers so they can make tips on those nights. No mention of barter was in the article, i.e. that owners could trade (their meals at their variable cost) with various merchants and services and then use the gift certificates and scrip obtained as a way to provide additional compensation for the cooks and their family, or extended family. Additionally, a restaurant as a member of a trade exchange, could provided line cooks with a sub-account, providing them with trade dollars as additional compensation. And the restaurant owner should pursue all advertising avenues available on trade to publicize their brand/establishment so they can generate more cash business.

Trade exchange owners should be cognizant of the squeeze restaurant operators are facing. The more services obtained on trade, the greater the cash saved, some of which could also go to the cooks. The coming business slowdown is an excellent opportunity to show the business community the value of your services. In these times they will have the time, and inclination, to listen to your message.

BarterNews has published a special report on restaurant barter: RestaurantReport

This entry was posted on Thursday, January 24th, 2008 at 10:29 am and is filed under Restaurants. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

8 Responses so far ↓

  1. Joe Says:

    Hi Bob,
    Do you know if trade dollars paid as wages count toward federal and/or other minimum wage requirements? Perhaps there’s a solution for those restaurant owners who are required by law(s) to pay a minimum wage that exceeds what would otherwise be the free market wage in their city.
    Your posts continue to inspire creative barter thinking. Thanks, Joe

  2. Harold Rice Says:

    While there is some discrepancy between states most do not recognize barter towards minimum wage.

    Barter however IS a good way to pay staff benefits, thereby allowing you pay for chiropractic, dental, optometric expenses Etc. with before tax trade dollars.

    And with a little bit of preparation you can use them to get full value for the
    employee, be fully deductable for the employer, and income only to the doctor etc.

  3. Bob Meyer Says:

    Harold, Thanks for your comments and assistance. (Harold Rice has been the source for tax advice within the trade exchange community. He is the Treasurer for the International Reciprocal Trade Association.)

  4. Joe Says:

    Harold, Could you please let me know which states “recognize barter towards minimum wage”?

  5. Bob Meyer Says:

    Joe, I think it would be better, easier for Harold, if you were to name the state you are from.

  6. HaroldRice Says:

    I do not know ALL of the state minimum wage laws and their local interpretation.

    Since the laws and their interpretation are subject to changes, I would suggest that you get a copy for your state. I can have them reviewed if you need help. However there are so many ways to use barter to extend your cash flow and replace cash for employee benefits, that trying to avoid minimum wage requirements would not be the usage of choice.

  7. How to Include Employees in the Credit Clearing Process « Beyond Money Says:

    […] an article on this topic that appeared in BarterNewsBlog, Harold Rice says, “Barter however IS a good way […]

  8. Bob Meyer Says:

    Tom, I agree with you, this topic does merit much more research and discussion. We intend to pursue it and hope others will provide their insights, observations, comments, and real-life experiences.

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