Beyond the Paycheck: How Instant Pay & Tips Fuel Career Growth at Cotton Patch Café

Tal Clark: Welcome to the Instant Payments Podcast. I’m your host, Tal Clark, CEO of Instant Financial, and we’re back for part two of our conversation with Stephanie Callihan, the CFO of Cotton Patch Cafe, a restaurant group with almost 50 locations across Texas and New Mexico.

Stephanie, thanks again for being a guest on the show.

Let’s jump right back in and talk more about the finance trends in the restaurant industry. We talked on our last episode a little bit about how Cotton Patch has paid out over $77 million in paying tips through Instant. What have you heard directly from team members about getting their tips digitally, quickly and without fees?

Do you have, as an example, someone that may come from another restaurant that wasn’t doing something like that? Do you get positive feedback on satisfaction? 

Stephanie Callihan: Yeah, we absolutely do. And again I think people who have worked at, as you mentioned, some of the places where they have to wait two weeks for their pay, it creates a lot of dissatisfaction from their [00:01:00] standpoint. They don’t understand why, especially with the rise of some of the gig economy jobs that are out there. If you drive for Uber, DoorDash, if you’ve done any task rabbit, things like that, any freelance work. There’s an expectation of, this is my money.

I have access to it when I need it. Why would the company be holding back my wages for this two week period? So the digital pay, having access to it like you said just makes sense in the modern society in the way finances flow now, that all payments are essentially digital. You can use your card everywhere. You can order on Amazon, online ordering, all kinds of things. It makes sense to have payments natively come in digitally. Some of the banks don’t even always give you instant access to the cash that you’re depositing into the bank. So if you were getting cash and you try to go and deposit it so that you can use your traditional bank debit card, you may still have to wait a few days before you have access to [00:02:00] funds. Again, doesn’t quite make sense today.

Tal Clark: Yeah, no doubt. Well, that’s a great point. That’s a great point. And we’ve been talking about tips primarily, and one of the unique things about Instant is that we are unique in being able to provide both Instant Tips for your wait staff and earned wage access for those that aren’t wait staff so that everybody has access every day. And I know you guys recently or have been using Instant Pay with us as well.

So let’s talk a little bit about what that transition looked like for you. Aside from the tips, those employees that are working for an hourly wage, having access, talk a little bit about when you guys did that, adopted that piece and how that’s working as well. 

Stephanie Callihan: Yes, so back in 2019, the original push was on freeing up that cash from the daily tips side, piece of it. And then I think around 2021, 2022, we started moving into the daily pay, earned wage access. And we have seen more vendor providers, [00:03:00] from our payroll providers, some the restaurant scheduling systems do offer some amount of earned wage access. But I think, like you said, you’re the only one that I know of, that has both earned wage access and tips on the same card. 

And again, for our employee base in particular, we may have some people who work a back of house job, or they may work a host one day and a server the next day, and it would be really confusing to try to tell them, well, some of your pay comes on this card unless it’s this other situation, and then it comes on this card and you have to create multiple accounts.

More complexity for our back office teams, more complexity for our staff in terms of where is your money and where do I get it from? So having both of those options on one card, which I think is again unique to you, and something that we’re able to take advantage of. Or again as our people promote through the system, if you moved from a server to a hourly [00:04:00] management position. This was another one of the issues that we were having is people were hesitant to promote because they were getting that daily pay option when they were serving. And transitioning into a management position where you were getting your wages once every two weeks, even though you might become bonus eligible, just that timing delay in terms of when I would have access to the cash, made people hesitant to take that first step in terms of their growth trajectory for their career that’s gonna get them to the next level.

Tal Clark: Yeah. 

Stephanie Callihan: So being able to have that daily pay option helps bridge that gap, keeps their funds flowing in. And again, easy to set up for our payroll teams as well. I know that’s one of fears when we were first talking about this internally, it’s like, well, I mean we’re already spending a lot of time doing payroll every two weeks. Now I’m gonna have to account for payroll [00:05:00] daily. What does that mean in terms of our payroll processing or reconciling on the backend?

Okay, this employee’s already taken $500, but we owe a $1,000. So what does that mean? And the way your system works makes it actually really easy. We’re on Paycor for our payroll provider, which you guys are integrated with.

Tal Clark: Yep. 

Stephanie Callihan: And again, I always tell everybody, I speak very highly of your team. Again we’re very proud of our people. I think you should be very proud of your people. They’re really helpful. They’re really supportive. They always answer the call when we have a question or need something. And as we were integrating with Paycor, setting up the direct integration to Instant, your team was actually really influential and very helpful to get us that connection set up. Teaching us how manage the integration, actually helping us with even some of our own internal reporting as we transitioned the system. [00:06:00] 

But you know, as employees now get hired at the store, they sign up for Instant on the app directly themselves. It pushes the direct deposit information up to Paycor so that our payroll systems automatically know where to deposit the funds to. We process payroll as normal every two weeks.

Tal Clark: You make a great point that I don’t know that we’ve really talked much about, which is if you have wait staff that is receiving their Instant tips every day and then they are actually receiving a promotion to a manager role, which is not hourly wage based, not being able to receive their tips or their pay when they work is a disincentive for the promotion. And that’s a really great point. And so Instant Pay resolves that so they can get Instant Tips if they move to an hourly wage and they’ll have the Instant Pay. And [00:07:00] that’s a really good point. So we’ll have to, I think we need to add more clarity to that maybe in our communication as we talk to people.

So, well super. I, I know you probably don’t keep up with it, but there has been, I wouldn’t want you to keep up with it, that’s what we do, is that there’s been some, a lot of conversations at the federal level in regards earned wage access. So it does have the attention of regulators and, and those on Capitol Hill. And we are staying ahead of the curve there and everything’s great. But the CFPB just put out an advisory opinion right before Christmas that essentially validated everything that we do the way Instant does it, from an earned wage access perspective. We weren’t expecting anything to happen and it came out. And it essentially validates everything you guys do with us today, which is we’re working with you as a business to make sure your employees have access to the wages and there’s no recourse, [00:08:00] right?

There’s no credit checks, there’s no recourse. This is literally the money that they earn. Right. Yeah. And all we’re doing in partnering with you guys is making sure they have access to the money they earn. And, I wanna follow that up with a question which is we, we still talk to executives in different businesses, whether it’s a restaurant business or other businesses, other industries that are less comfortable with the idea.

It’s more about they feel like there’s some protection level of their employees by not allowing them access to their wages each day, which it blows my mind. That’s completely, first of all it is, it’s not your wages, it’s theirs at that point, allow them to manage their wages.

What do you think about that? How can we both as a restaurant industry, us [00:09:00] as someone who are providing the is providing these services, how can we communicate the benefit? And what would you say about that if you were talking to the CEO or CFO or of another business? 

Stephanie Callihan: Like you mentioned, since Instant is fee free, like you said you’re not a payday loan provider. There’s no interest charges, there’s no catch or gotcha to the employee. Or even on the employer side, there’s no fee to the employer for providing the service to the employees, which makes it an easy no brainer from the CFO seat to be able to sign up for the service. And then again, no fee for the employees. So again, we’re not in any sort of like payday loan situation. And again, all those payday loan providers stepped up because the traditional payroll cycle of you’re getting your funds every two weeks doesn’t necessarily work for everyone.

That’s what’s efficient for the business, and that’s why we pay every two weeks, not because there’s [00:10:00] anything magical about that timing cycle in terms of meeting the needs of the employee and the funds, and when their bills are coming due. When is their rent due, when is their credit card billing statement? When is the auto payment if you have a car loan? When does your babysitter wanna be paid? if you have, get childcare so that you can come into work, you may need to go home that same day, and pay your childcare provider, whether you know a professional or somebody that’s coming into your home to do it. You may need to go and get gas. You may need groceries. And so I think the employees wanna be treated like, we’re adults, we’re responsible for finances. 

Tal Clark: Right? 

Stephanie Callihan: You stay out of my pocketbook and my money. I’m gonna come and work and I get my money for providing the services. What’s nice too is then if you need somebody to pick up a shift, it’s hey, if you need a little bit of extra money this week, if you wanna save up for a trip, if you wanna boost your [00:11:00] emergency fund, whatever it is, you can come in pick up a shift.

,

Tal Clark: Yep, all great points. All great points. And it sounds like you clearly know your employees very well and know where they are. And I think that’s the message that we as Instant are trying to make sure that we can help educate other leaders in the restaurant space and other industries as well about the value of this.

Again, it’s their money, walk in their shoes and they need access and allow them that access. Right? That’s simply all we’re doing here.

I’m curious as to, we’ve talked a lot about pay and tipping and, and things that have gone on. What do you see over the next 5 to 10 years? What are some things that you guys are looking forward today from a technology perspective that you think could be valuable to you and your people or, [00:12:00] yeah, I think that’s the question. What is it? What do you see? How do you see this evolving? Maybe not what we’re doing, but other things you may need from us or others that would help with your restaurant operations. 

Stephanie Callihan: Yeah, I think from the tip side of it, it’s interesting to see what happens with kind of tip culture in America. I do think that tips in a full service environment makes sense. I think generally studies have shown that the employees do make more money, under the tip basis that we currently have versus, if we were to eliminate tips and go straight to wages. I know there’s a little bit of pushback on that sometimes when the vending machine asks you for a tip and it’s gotten a little bit overboard. I think that’ll be something that kind of continues to evolve over time.

We’ve been able to introduce tablets for the servers to use in restaurants. They can take on more tables at a time because they’re able to stay out on the [00:13:00] floor and be more present, which allows them to earn more. And we’ve seen better guest satisfaction scores because server’s able to stay out on the floor.

So I think that’s an interesting use of technology. And then everything AI is the hot button topics right now. So in addition to the financial planning resources that you guys have, tools and and education, in the Instant portal, are we getting to a point where there could be AI assistance that are helping monitor and say, hey you earned $40 more tips than usual this week. You’ve set out goals to pay down debt or to boost your emergency fund or to save for a trip. And so here’s different strategies of how could deploy those additional funds. Or did you know that if you were able to pick up one extra shift, you could, you know again pay down credit card debt faster and save [00:14:00] thousands over whatever the course of time is by having you know that net present value, the time value of money coming in. So if there was AI assistance, that could kind of help be a personal financial coach within these tools seeing what the employees are actually making in real time and be able to help them meet their growth and their financial objectives, I I think an interesting use case.

Tal Clark: Yeah, that’s great. That’s a great idea. It’s certainly something that we’ll continue to follow and maybe be able to figure out together as we go forward with others, with you and our other partners as well. So, well, good. Look, let’s talk a little bit more, let’s get away from the business aspect a little bit because one thing that I think that’s pretty cool I know about your background, Stephanie, is that you are an equestrian.

Stephanie Callihan: Yes.

Tal Clark: Yes. Just real quick, just for everybody that might be listening, talk a little bit about that. What is it you, [00:15:00] I know that you do a lot of riding, you do a lot of helping people with the horse. Talk about your background as an equestrian. 

Stephanie Callihan: I compete in a sport called Three Day Eventing, which actually started out as a military sport to see who had the best war horse. So it’s like a equestrian triathlon. Three phases, the same horse and rider competing across three different disciplines. The first one is is dressage. 

Which every year in the Olympics, that rave horse, you’ll see some of the horse dancing that comes up. The idea was to show who had the best trained horse, most obedient. The second day is cross country, which is supposed to simulate a day at the battlefield. If you think back, Normandy, brushes, fox holes, things like that. If the fastest way to get a message back to camp or to the front lines, in a straight line from here to wherever you need to go over, under or through any [00:16:00] obstacles that are in the in the way. So it’s at a low level maybe a one mile course, at the high the high level four miles over like 40 solid obstacles. Uh, water ditches, banks, horse and rider. The horse hasn’t seen the course before they go out and compete. The rider can walk it. And so you’re galloping um, solid obstacles. And then the last day is show jumping, which a lot of people are familiar with jumping over the colored rails. And that’s to show that a full day on the battlefield the horse still has the stamina, endurance, and precision to come out, uh, be able to jump, and be precise and not knock down the rails. 

So again, started out as a military trial. It’s now the only Olympic sport where men and women compete as equals. There’s no men’s and women’s division. And so it’s really fun, like the partnership that you have with the horse and takes a special, unique, uh, Equestrian athlete to be able to do to this.

And they, they love the job. The ones that are good at it, they love [00:17:00] doing it and get really to go out and perform.

Tal Clark: So, well that’s amazing. And it’s a beautiful sport as well.

How often do you do one of the events?

Stephanie Callihan: The horse that I have now is 24, so he’s not currently competing. Back at our peak, I’d probably do one competition a month, so like 12 times a year traveling from Arizona out to California for competition. Again, it’s demanding, so you don’t wanna do too much and overdo it. You have the saying that you can lead a horse to water, but you can’t make them drink. You also can’t make him jump in if he doesn’t want to.

Tal Clark: I get it. That, makes a lot of sense. Well, look, I’d love to see that at some point. So that’s great to hear about. So let’s end with a round of rapid fire questions. In one sentence, if possible, tell me what you think about the following topics. Is there a habit or routine that you follow every day?

Stephanie Callihan: Again, almost every day out at the barn, riding the horses, working with them, feeding at least some amount of outdoor exercise every [00:18:00] day.

Tal Clark: Wow. Okay. That’s amazing. What is one book or podcast that you would recommend?

Stephanie Callihan: Instant Financial podcast.

Tal Clark: There you go. Super. That’s a great answer. All right. Is there a book besides that?

Stephanie Callihan: Oh, there’s so many. I think probably almost anything by Malcolm Gladwell’s a really good book to read. I think he’s got a lot of really interesting topics.

Tal Clark: That’s really, that’s, true. I agree with that completely. So. All right. What is your favorite menu item at Cotton Patch Cafe?

Stephanie Callihan: It changes over time. Right now the chicken fried chicken with the jalapeno gravy is like…

Tal Clark: That sounds amazing. That sounds amazing, for sure. All right, last: what professionally speaking are you most excited about for Cotton Patch Cafe in 2026? What is, what’s, what goal or item or something you guys may be implementing?

What are you most excited about for Cotton Patch in 2026?

Stephanie Callihan: Yeah, I’m just really excited about the [00:19:00] growth trajectory that we’re on right now. From a same store sales perspective, I think again, we’re focused on inspiring more smiles in the restaurant. Making it easier to run a Cotton Patch, exceeding expectations of our guests. Again, that’s all coming together with reduced turnover, happy employees, providing great service to our guests who are coming back, great value that they’re to receive in terms of the food and the price and the experiences that they’re, having. And we’re seeing crazy sales growth numbers we’re up 4.5% last year on sales, 5.5% on traffic, beating Texas casual dine industry by over 8%.

And so coming out of the pandemic, all of the work that all of our teams have been doing is really paying dividends in terms of, the guests saying, yes you’re doing what we want. And then that’s providing more opportunities for to the capital to build new restaurants, and get back into growth. Come out to Louisiana, Mississippi. Georgia area.

Tal Clark: Heck yeah. Let’s [00:20:00] do it. I’m ready. So, well that’s good to hear. You guys are outperforming the industry and sounds like you’re on for a great year in 2026.

So, Stephanie, thank you for joining us on the Instant Payments Podcast. You have so much hands-on experience and I know this will be valuable for others in the finance across the hospitality industry. To our listeners, you can learn more about Stephanie’s work at cottonpatch.com and follow along with a new podcast episodes at instant.co/podcast.

Be sure to subscribe and leave a review wherever you get your podcasts. Stephanie, thank you again. Thanks to all of our listeners for tuning into the Instant Payments podcast.

Stephanie Callihan: Thank you.