And because most restaurants (though they're loath to admit it on the record) don't report all tips, when they switch to no tipping and their payroll is all accounted for, expenses around worker compensation, matching payroll taxes, vacation time, and sick pay all go up. Hoffman said the last two are particularly huge because, for a Comal server, they both get paid out at their full hourly wage (on average, around $35 hour), as opposed to the minimum wage.
But -- and this is the hardest part for most people to wrap their heads around -- if you can figure out how to make the financials work in the short term, you can finally actually control your costs. Because you now have access to 20% of your revenue you couldn't touch before, and you can allocate it as you see fit for renovations, food costs, or any other expenditure, like literally every other business that has ever existed. But here is where lots of restaurateurs break down, because figuring out how to allocate the money fairly while keeping the front of the house at their wages and increasing the back of the house involves, as Hoffman said, "black-belt management techniques."