Skip The Tip, Restaurant CEO Says

No need for your internal Emily Post to debate the merits of 15 percent or 18 percent here. At Noodles & Co. (NDLS -1.63%), the recommended tip is nothing.


"Respect doesn't cost you anything," Noodles CEO and Chairman Kevin Reddy said in an interview. "Being nice doesn't cost you anything, and we don't really feel that folks should have to pay something additional for us to appreciate that they're choosing us over another restaurant."


The no-tipping policy also plays into an emphasis on relative value at Noodles, which has about 380 locations in 29 states and Washington, D.C., that serve a variety of noodle and pasta dishes, he added. The average meal sets diners back about $8 -- a price tag that's higher than those of fast-food giants like McDonald's (MCD -1.17%) or Wendy's (WEN -1.08%) but lower than those of casual dining chains like Darden Restaurants' (DRI +2.76%) Olive Garden or DineEquity's (DIN +0.12%) Applebee's.


"We don't want our guests to feel we're trying to upsell them," Reddy added. "We'd rather have them feel we'd rather upserve them than upsell them. That's why we're really cautious even about the price increases we pass on."


Reddy stressed that the recommended policy isn't about denying team members tips since the policy means that Noodles must pay workers enough to make sure that it's not an issue. (He also mentioned that some customers insist on tipping despite the policy, which workers will then accept.)


While the company did not share payroll data, Noodles mostly pays workers above minimum wage, Reddy said. Since its pay is generally higher, potential hikes in the minimum wage rate won't affect the business too much, he added.


In recent months, the federal minimum wage has been a hot-button issue. Last month, President Barack Obama boosted the minimum pay for federal contractors hired in the future to $10.10 per hour. He's also voiced his support for the federal level for all workers to rise to $10.10 from the current $7.25. Separately, organized protests of fast food workers have lobbied for a jump to $15.


If minimum wage rose much higher than expected, the move could reset expectations across the industry, Reddy said.


Although he said he supports the idea of trying to pay people fairly, he doesn't think there's an easy answer to the minimum wage debate.


"I'm not opposed to things that help folks, but I'm also very pragmatic and I'm frustrated at times that good intentions don't get executed well and that there is waste in our government," he said. "So to me, I think as a society we should help people and set up a system where people can be successful and have high self-esteem."


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If tipping factors into whether or not you can afford to eat out, I'd say you have some serious priority issues.

Here's a "tip" get a different job. We discussed tipping at length not too long ago if I remember correctly.

I tip if I eat in. If I call it in and get it to go, I generally don't (or just round the change up to the nearest dollar. So 5.45 I'd just give 6)

If I'm not being served, I don't feel I need to tip.

People at Starbucks now want tips for "handing me a cup of coffee". I would probably tip if they are nice and bring me my coffee to my table. Otherwise no thanks.

Starbucks stopped accepting tips 5yrs ago.

You have to consider that people getting tips can make more than your hourly wages though. So people boo hooing people that work for less than min. wage can far surpass min. wage.

I realize that I'm the minority here-- most people consider tipping to be simple good manners. But I'm not exactly alone, either.

I much rather take the risk to earn more money than work at an hourly wage and know I can't make more.