Harry Cragoe of The Gallivant on why banning tips is good for business

Why did you decide to ban tipping?​

I’m a little bit different to most people in this industry because I had no experience in hospitality until I bought this business a few years back. The tronc system always troubled me as it tended to be paid to front of house staff and I didn’t understand why they deserved to be tipped more than anyone else. I thought it was very demotivating and unfair.

Tell us about the changes you’ve made at The Gallivant. ​

We refuse tips, everyone’s paid £9 per hour or more​ and receives a performance-based bonus paid monthly and quarterly. At the end of the year we have a profit figure to hit and if we exceed it then some of the excess will be distributed among members of staff. Everyone has ownership of the business and feels like they’re a worthy valued member of the team.

We also don’t have an age limit on pay. I’ve got a 19 year old daughter, why should she be paid less if she came to work for me than a 25 year old? I don’t understand that. Everyone in the business, whether they’re 17 or 55, should be on the same terms.

We announced the changes to our staff in November and to my enormous pleasure people started to clap. They were very appreciative of the effort.

How have customers reacted?​

In our bill folders we put a statement that says we are not asking anyone to tip and have increased our food and beverage prices a little to enable us to do so. The response from customers has been 100 per cent positive.

What’s been the response from staff?​

It was interesting, after we’d made the changes a few members of staff actually left. My suspicion was that once we’d removed the tronc they realised they weren’t going to get a free ride anymore. But we’ve now got more people wanting to work for us than ever before and they are all genuinely passionate about working in this industry, rather than just wanting a job.

How have the changes impacted you financially?​

It’s definitely hit the bottom line. My expectation and hope is that over a 12-18 month period that impact will be mitigated by increased revenue from more customers coming in.

Happier members of staff will make for happier customers, and we’re already busier than we ever have been as a business.

The hospitality industry has a massive staff retainment problem – do you think more businesses will need to take a similar approach in order to survive?​

Hospitality is an incredibly hard business, and I would say as a general rule that people are under-valued in the industry.

I think more businesses are going to have to adopt the same approach as us. If they want to attract the right calibre of people and retain them then they have to pay a fairer wage.

Ultimately this game of hospitality is all about making people happy, and the people that work in it are the most important factor in delivering success. It’s a logical argument that if you treat your staff well they will be happier, and will be more likely to make customers happier in the process.

You’ve launched the #toohiptotip campaign​ calling for more businesses to remove their service charge, how is it going so far?​

I’m convinced I’m starting something that more people are going to follow, and I’ve been approached by quite a few interesting parties.

Why should you have to tip when you go to a restaurant? You don’t do it anywhere else. It’s the most bizarre thing. These businesses share my viewpoint, I think they are number crunching and working out when they are going to do it.

For too long people have not been paid fairly enough in this industry. I don’t think what I’m doing is that revolutionary; I’ve just perhaps had bigger balls than anybody else to be able to do it.

What’s next for you and The Gallivant?​

We’re still working on getting this one right but I definitely want to open 2-3 more Gallivants over the next five years.

The plan is that they will be in the Sussex and Kent area focused on really delicious locally-sourced food. We have a menu where 95 per cent of our fresh ingredients are sourced within ten miles of us. So that’s the vision – to have more Gallivant’s serving delicious food in a very relaxed environment, by nice people that make you smile.

To find out more about #toohiptotip view the website here.​