CALIFORNIA SURcHARGE INFO
First and foremost, we want to thank you for your patronage to Market Broiler & MB Grille. We know that value has always been an important factor to our guests, and we want to ensure we continue to provide an experience that balances value with quality. In an effort to be as transparent as possible, we want to take this opportunity to shed light on why we chose to implement a surcharge, and how we utilize the funds.
Our surcharge currently supports two areas of our business, the first being to offset the hyperinflation associated with labor costs including but not limited to: hourly wages, healthcare costs, workman’s compensation, paid time off, and other labor-related costs.
Since 2015, federal, state and local governments have passed legislation significantly increasing mandated minimum wage rates, as well as implementing new health care and paid time off requirements. Additionally, some municipalities have chosen to mandate even higher local minimum wage rates.
Minimum wage increases have primarily impacted our tipped team members, as they are typically the only team members in our restaurants who are paid at the minimum rate. We feel it is also important to allow these changes to impact our non-tipped team members’ compensation, and therefore have increased our labor costs across the majority of our positions.
Market Broiler and MB Grille, like the majority of the restaurant industry, operate with extremely small profit margins. On average, restaurants operate between a 2% - 5% profit margin, which is impacted further by these labor related costs. Unfortunately, we believe we could not cover these new costs, and keep our doors open, without finding new ways to cover these increases.
The second area of business that our surcharge supports is the monumental increase we are currently experiencing in cost of goods. The global pandemic continues to impact so many different facets of our world, the latest being lack of availability and runaway pricing. We buy our goods on the global market and the shutdowns associated with Covid have created havoc on the supply chain. There are not enough workers to produce the products we need, and not enough drivers and trucks to deliver products. Additionally, the cost of overseas freight has gone up exponentially.
We do not want to simply increase our prices, as we believe it is important to continue offering the value you have come to expect from us. These changes and operational cost increases also impact the many organizations that we do business with, and have impacted many of our other costs. We believe passing menu wide increases could negatively impact your dining experience, and it is our hope that implementing a flat surcharge fee, will be a less impactful way for us to cover these new costs, while still preserving the dining experience and value you expect from us at Market Broiler & MB Grille. We also do not want to be forced to discontinue the value items that so many of our guests enjoy including our Reelin In The Deals, Lunch Combos, Right Sized and Happy Hour menus.
We believe that the industry as a whole will continue to transform as these costs continue to rise, but we have no intention of changing the level of service you have come to expect over our 30 years of service. With the use of a surcharge fee, Market Broiler will be positioned for a quick and easy reversal of this charge in the instance that California does allow operators to exercise a minimum wage tip credit or the supply chain issues subside.
If you have additional questions or comments regarding our surcharge fee, we welcome your feedback. Please take the time to contact us directly at customer.service@phi.team. Thank you so much for your continued support, we hope to have the privilege of serving you for another 30 years!
Interested in learning more about current and future legislation? The California Restaurant Association is a great resource!
https://www.calrest.org/wages/wages-0