The restaurant industry is evolving rapidly, and 2025 is set to bring significant changes that will reshape how operators manage their businesses and engage with employees and guests. From adapting to rising minimum wages to embracing innovative tipping solutions, these trends are paving the way for a more dynamic and efficient industry.
As minimum wages continue to rise across the U.S. in 2025, restaurant operators are feeling the pressure. The specific wage increases vary by state and whether employees are tipped or non-tipped, but the consensus is clear: labor costs are climbing. A recent survey found that 89% of operators expect to pay more for labor in the next year, with 35% anticipating significant increases.
Labor affordability remains a pressing concern, with three out of four operators citing it as their biggest challenge for 2025. Yet, leading restaurateurs are finding innovative ways to adapt. Kevin Eggan, CEO of Hops n Drops, Brock Lynch, Owner of Wooden City, and Andrei Sten, Co-Founder of SuViche Hospitality Group, are among the voices sharing strategies to navigate these wage shifts. From optimizing scheduling to exploring new compensation models, they’re finding ways to balance costs while maintaining exceptional service.
TipHaus recently hosted a webinar on Adapting to Minimum Wage Increases, featuring Brenden McCarthy, Vice President & CMO at Ballyhoo Hospitality in Illinois, and Patrick Yearout, Director of Innovation, Recruiting, and Training at Ivar's in Washington. Watch the recording below to hear their incredible insights and practical strategies!
Exciting news—TipHaus is hosting Part 2 of this webinar on January 21st at 11 AM PST. This time, you’ll hear from Andrei Stern, Co-owner of SuViche Hospitality Group in Florida, and more industry experts! Don’t miss out, sign up here!
The traditional tipping model is evolving, and commission-based compensation is gaining traction in 2025. This approach pays employees a percentage of sales instead of relying on traditional tips, creating a more structured and equitable system. Restaurants implementing this model add a service charge to guest bills, distributing it among team members based on their roles.
For example, in a commission-based system:
This model rewards salesmanship by incentivizing employees to enhance the guest experience and can work for any restaurant that adopts a service charge model. It ensures all roles—servers, bussers, bartenders, and hosts—take home a fair, fixed percentage of the service charge, creating a more transparent and equitable system. This 2025 restaurant industry trend highlights a broader shift toward structured, fair compensation practices across the industry.
While commission-based models are gaining traction, tiered tipping systems are also being adopted to reward seniority and experience.
Tiered tipping is a dynamic system that rewards employees based on their experience, seniority, or performance within a specific role. By assigning point values or ratios to employees, it ensures that those who contribute more, whether through expertise, longevity, or exceptional performance, receive a larger share of the tips. This approach not only motivates staff to excel but also provides a clear growth path, fostering employee retention and satisfaction without requiring additional wages from operators.
Example: Big Red F's implementation of tiered tipping allowed them to reward staff based on their career progression and contributions.
QR codes are transforming the tipping landscape in 2025, offering a modern and convenient solution for both guests and employees. With an expected 70% growth in QR code usage between 2023 and 2027, this technology is becoming a staple in the hospitality industry.
TipHaus’s new QR Code Tipping feature simplifies the process for all employees, beyond traditional wait staff. Whether it’s valets, housekeepers, baristas, or cleaners, guests can tip quickly by scanning a QR code, eliminating the need for cash. This innovation ensures equitable access to tips for those who typically rely on physical payments while providing operators with streamlined reconciliation and reduced cash-handling challenges.
Additionally, the rise of buy-now-pay-later (BNPL) services is making its mark on the hospitality sector. These payment options, particularly for larger bills or group dining events, are creating flexibility for guests. By allowing customers to split payments into manageable installments, BNPL solutions encourage increased guest spending, ultimately benefiting restaurants and their staff alike.
As cash becomes less common, innovations like QR code tipping and BNPL options empower operators to meet guest preferences while supporting employees across all roles.
In 2025, restaurants are leveraging technology not just to streamline operations but to enhance employee engagement and satisfaction. Platforms like TipHaus are empowering employees with transparency into their earnings, real-time access to their tips through Earned Tip Access (ETA), and mobile apps that foster trust and efficiency. By investing in employee-focused technologies, operators are reducing turnover and building stronger teams in a highly competitive labor market.
Example: Grey Dog Café saw a 30% boost in employee retention after implementing ETA, demonstrating how technology can create a happier, more loyal workforce.
Sustainability continues to be prevalent for the restaurant industry in 2025. From reducing food waste to adopting energy-efficient appliances and sourcing local, organic ingredients, operators are prioritizing eco-friendly initiatives to meet customer expectations and regulatory requirements. For instance, many restaurants are transitioning to compostable packaging and implementing food donation programs to minimize their environmental footprint. Beyond customer appeal, these practices often result in cost savings, making sustainability a win-win for operators and the planet.
AI technologies are making significant strides in back-of-house efficiency. Tools like Toast are helping restaurants optimize labor scheduling, predict peak dining times, and streamline inventory management, ensuring cost efficiency and operational accuracy. Similarly, Fourth's HotSchedules AI is enabling restaurants like Chili's to improve scheduling accuracy by 20%, saving up to 600 labor hours weekly by predicting demand and adjusting workforce allocation dynamically.
Other companies such as OpenTable are utilizing AI for reservation forecasting, while SevenRooms leverages it for personalized guest experiences. AI-driven solutions are still developing but are quickly becoming integral to helping operators navigate labor shortages and maximize productivity.
According to Nations Restaurant News, drive-thrus are getting a tech upgrade in 2024, with personalized features like recognizing customers using license plates. This aligns with the trend of making off-site dining more customized.
At the same time, restaurants are testing robot and drone deliveries for a futuristic touch. While some brands are diving into these tests, there's a debate about whether it's too early for widespread adoption. The industry is navigating the balance between innovation and addressing customer concerns in these exciting changes.
2025 is a year of transformation for the restaurant industry, with operators embracing technology, rethinking compensation, and prioritizing sustainability to stay competitive. By addressing labor costs, improving employee satisfaction, and enhancing guest experiences through innovations like QR tipping and AI, operators can turn challenges into opportunities.
Success lies in adaptability and leveraging new tools to streamline operations while fostering a supportive and efficient environment for teams and guests alike. The future of hospitality is here, dynamic, innovative, and full of potential.
Ready to learn more? Explore how TipHaus can help your restaurant stay ahead of the curve. Book a demo today!
