Instant Tip Payouts, Automated Tip-Outs, and the Four-Day Workweek for Aloha Hospitality's Employees

Tal Clark: Welcome back 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 Spencer Baumhower, the president of Aloha Hospitality. Spencer, let’s jump right back in. You guys have always been at the forefront of technology and innovation, especially when it concerns your employees.

And you started with Instant back in 2020 using Instant for tips payouts. And whether or not, I don’t know if you realize this or not, but we’ve paid out over $30 million in tips have been paid using Instant, accounting for 300,000 tip payments.

Spencer Baumhower: There’s a lot of tips.

Tal Clark: It’s a lot of tips. So tell me, tell me a little bit about what you remember about the background of getting started, and then get into a little bit about what it means today for your employees and your business.

Spencer Baumhower: Yeah, no. Well, first of all, our team members love it, [00:01:00] they wouldn’t go back to what we were doing for anything in the world. And so we’re really appreciative of the partnership and everything, working with y’all, Tal, and your team. But, it was, if I remember correctly, it was the several main reasons, one being security and safety.

A lot of we were paying out our tips in cash every night, and we’ve got a lot of high-volume restaurants, so we’re paying a lot of tips. So, so safety was a big thing. And then the other obvious reason is because we were paying out so much cash as our industry has gone towards more of a, in the majority of our transactions now are credit card transactions, right?

So, we weren’t taking in as much cash, in the building to be able to pay the pay out. So we were having to cut checks from the support center to replenish petty cash in all the stores for a while, because we were paying out all the [00:02:00] cash that we were taking in tips, right? So, going with, your platform and Instant totally got rid of that whole process, which was a, a semi pain for us, right?

So, so those two things were huge. And then really just the benefit for the team member and the ability to have their funds on their card and the flexibility that it provides for them to be able to manage their money and swipe it or use it however they want to. So, so there was a litany of reasons, but, those were the highlights there.

Tal Clark: Yeah, super. Well, I appreciate that. And we, we continue to innovate and innovate with you guys as well. I think the latest thing that we’ve put in place is some of that early on we were… You guys were sending us a file, and we would load the cards, and it all worked just like you said. It was clean and easy.

But one of the things that we’re doing lately with you guys is new technology to make sure we’re calculating those tips for you and take some of the [00:03:00] manual work out of the process of the load. Any insights on that? Any thoughts on that piece of it.

Spencer Baumhower: Yeah, no, that’s been a huge blessing, so, to our organization. But, and so the way, where we’re at now is, before we were servers were tipping out bussers, right? They were tipping out the bartender, and there was a lot of cash, going from hand to hand, right? And, we had as a bunch of tip logs that the managers had to keep up with to track busser tips or bar tips and make sure that, everything was being accounted for there.

So, now where we’re at, through the different integrations and the partnership and y’all’s continued evolution, is that all that’s done seamlessly for us through our, through Instant, right? And, so, all that’s calculated and paid out. The bussers are paid out.

And it calculates the, the percentage of the tip out, whatever the sales percentage is that goes to that busser or goes to that [00:04:00] bartender. All those transactions are seamlessly handled in the back-end technology that y’all provide for us. So, it’s a lot cleaner, and there’s no tip logs or, things like that for us anymore.

So it’s been huge on that front.

Tal Clark: Super. Well, good. And we’ll continue to work with you guys as you, if you need other things, Spencer, related to this, let us know. We’ll keep innovating and keep working with you guys. Let’s change gears a little bit. Another innovation, but more in, in something you did for your employees as well, I think back in 2018.

I wasn’t aware of this until we started preparing for the podcast here, but you guys implemented the four-day workweek for your store managers. 

Spencer Baumhower: Yep. 

Tal Clark: Which had to be revolu- revolutionary at, the time. What were you solving when you introduced it, and did it work? Is it still in play today? Tell a little bit about what that’s meant to your organization.

Spencer Baumhower: Yeah, so that, and I can’t take credit for that. That’s something, like I told you, my dad is a mastermind with different stuff. [00:05:00] But, so it was actually something that was talked about, I can’t remember how long ago. Maybe, I wanna say maybe 15, 20 years ago.

This was… I don’t know how old I was. But, , I was probably bussing tables somewhere, but not a part of those conversations. But, so but it ended up not, they d- it didn’t get rolled out, right? But the concept was there. And, Dad and I both, one of the cool things when you work with family is, well, it’s a blessing and a curse, but you’re always talking shop. And so just through those conversations, Dad and I were talking about the concept, and I was interested in it, and so I was asking questions. And we ended up polishing some things up with it. And, I was actually a, a general manager at the time when we were having this conversation, so I was like, “You know what? Let’s test it at my unit. I’ll work it out.” And, we’re really systems-based. We’re a people ba- We’re a people-based, systems-oriented company, right? So, [00:06:00] we don’t like gray. We like to have a plan and a method and to equip our team members with the tools to be successful, right?

To say, “Hey, just run this play to the best of your ability, and you’ll be successful,” type thing. So we tested it, and updated our opening guidelines and closing guidelines and some of our infrastructure to match that four-day structure. And, I actually remember there was a… as a general manager, usually my schedule was I was opening Monday.

I was closing the kitchen Tuesday, opening Thursday, and then a mid-Friday Saturday. And, with the four-day workweek, I was off Tuesday, Wednesday, Sunday, right? And so I’m, I remember s- probably third or fourth week, my dad calls me. It’s a Tuesday, and we’re again, just talking shop. And he’s like, “Hey,” getting ready to go in, and he, I think he heard some water in the background.

Tal Clark: Okay.

Spencer Baumhower: And, he was like, “What are you doing?” and I was like, “I’m actually by the pool, Dad.” And, he was like, “What are you doing by the pool?” And I was like, “Hey, it’s four-day workweek, [00:07:00] I’m off on Tuesday now, so, sorry.” But, but anyway, so we ended up testing it and really dialing it in.

And then, we ended up shortly after that, rolling that out everywhere, company-wide. And, it’s not a given. The way we sell it is it’s not a given. It has to be earned. So it’s a reward for a well-run, well-coached, well-disciplined team. But it, what’s cool about it is it actually provides, it’s better service and better coverage for our guests.

Like, we prefer our teams to be on it. And about 90 to 95%, I’d say 90, somewhere in that range of our stores are on the four-day workweek program, and they love it. It’s like, I think that’s a big part of what helps turnover too with us within the leadership and management ranks so, but, it’s been very revolutionary and, you’ve got, each…

If we’re talking Baumhowers, most are kind of [00:08:00] structures. We’ve got six salary managers. You got four front of house. Each, each front of house manager has their own AOR, director of service, AGM, cafe, hospitalities, front door GM, then you got a chef and sous and so on. But, for the majority of, like, on a busy Saturday game day, in, in one of our towns, whether it’s Auburn or Tuscaloosa or Troy, Alabama, and we’re doing, 30, $40,000 in a single day, on a four-day workweek, you’ll have five of the six salaried managers there in the building for the majority of both shifts.

So, so it’s good for our coverage, it’s good for our guests, and it’s just been a great program.

Tal Clark: That sounds great. That’s interesting. You mentioned something, I gotta ask you a question.

Spencer Baumhower: Okay.

Tal Clark: What does, what store does best, Auburn or Alabama?

Spencer Baumhower: Oh Lord, you would do that. So, right now, I mean, r- they’re both actually, our Auburn store is one of the best stores in the company, 

Tal Clark: Great. Okay.

Spencer Baumhower: We’ve got two stores in Tuscaloosa, so [00:09:00] they both do really well. But the campus store, right off of McFarland is, I call that the mothership, ’cause you go out there and in the concrete, you see my dad’s handprint, m- my, my handprint, my grandmother’s, my mom’s, and my siblings out there, so we call it the mothership.

But that store, I’d say they’re neck and neck, but I would say T-Town’s, a little in the lead, as far as sales goes.

Tal Clark: There you go. There you go. You might have to cross the border and put one in Starkville one day.

Spencer Baumhower: Yeah, we’ve been approached about that in the past, but whatever, whatever plan God calls for us, we’ll just we’ll run that play, as far as growth, as far as growth outside the state, so.

Tal Clark: There you go. And we’d love to have one in Pensacola as well, too. So.

Spencer Baumhower: Yes, sir. Been work, been working on that.

Tal Clark: All right. Well, look, there’s a lot going on in the restaurant space. I mean, the last couple years in many cases have been tough. I think there’s been opportunities in the last couple years as well. But just tell me a little bit [00:10:00] about what you guys are focused on today.

What, does it take to successfully run a restaurant business today, right? I mean, costs are up in almost every place, I think, and I know I think you guys have tried to… I don’t think you’re trying to pass all that on to your customers. Some people do, and I don’t think that’s worked out very well.

But how– Tell me what’s going on and what’s important in running the restaurant today and maybe any technology that you’re looking at that may help you do that.

Spencer Baumhower: Yeah, so, and a- again, we were just, again, talking about this for two days with our GMs and, ’cause you hear things. And I, which we, work really hard to stay focused on us and, controlling what we can control, and not really worry about competitors or what other folks are doing.

But you gotta be smart and aware of the macroeconomic headwinds or some of the different challenges that are coming our way. So I mean, obviously, inflation’s been crazy for the past, I mean, Co- I don’t even, I don’t even wanna get into COVID. We were paying four, five [00:11:00] bucks a pound for chicken wings and chicken breasts for, two, three years back then.

I’m like, “What is going on?” It was, a lot of praying and, all that kind of stuff going through that. But, yeah, there’s been a lot of challenges and y- you hear things about restaurants being down, past several years. 

Tal Clark: Yeah.

Spencer Baumhower: They’re, and whether that’s because, 2021 or 2022 was such a huge year for a lot of people because of all the money that was pumped into our economy.

I don’t know, but I think one of the key things that we’re, we’ve always been focused on is value, right? And, value not in the sense of cheap. Value in the sense of… And, to me, and I’m a little old school, but probably ’cause of my dad, but in our business, at the end of the day, when the rubber meets the road, we’ve gotta be able to provide a great quality meal, right?

At a… And, good, great service, hos- with a smile, right? With folks who genuinely [00:12:00] care at a price that people think is of a value, right? People are only gonna pay so much for a cheeseburger right now. And right now, I’ve been going out to eat several restaurants and, I mean, it’s, some of these places charging 16, 17, 18 bucks for a cheeseburger, right?

And so I think the fight is gonna continue to be, and we’re the people that are, gonna be successful in this type of in- overinflationary environment that we’re in, is folks that can k- keep, folks that can fight to keep their prices at a point, where, it can be still a value to guests, where they don’t feel like they’re getting taken advantage of.

So that’s something that we’ve worked really hard. We rolled out a, a menu called Inflation Bites probably three to four years ago, when, all this conversation of inflation was going on. So you can go into Baumhower’s, and, Baumhower’s is a scratch kitchen, so we hand cut all our chicken. We’re making our sides.

We’re making a lot of our wing sauces. We’re, so, [00:13:00] because we’re doing all that from scratch, it gives us a little bit more wiggle room to be able to, do an 8.99, you know, third pound burger fresh. And, so anyways, yeah, we’ve got a menu called the, it’s called Affordable All Stars now, but it was Inflation Bites.

And, you can get, everything. There’s about six, seven, eight items on that menu that they’re all below nine- 9.99, and you get a complimentary beverage with it of your choice. So, that’s been a huge driver for us. And people are very passionate about that menu, right? And so, to answer your question, I think, that’s a big part of it, and then also, you gotta be…

We gotta be able to execute, right? We’ve got to be able to execute. We’ve… Our managers gotta be on the floor. They’ve gotta be talking to their guests, building relationships. We’ve gotta… Our, leaders gotta lead and we’ve gotta be able to get the job done at the table at the end of the day.

[00:14:00] So, so to me those two things, th- those two things I think are gonna dictate, the future of hospitality for a little while.

Tal Clark: Yeah, that’s outstanding. I went to a local pizza restaurant here last night in Pensacola. Got a large pizza and a couple of beers apiece, and the ticket was $76, and I’m like, How in the heck did that happen? Man, I was.

Spencer Baumhower: It happens.

Tal Clark: That’s nuts.

Spencer Baumhower: It happens quick. And so, but, to your p- to your point there, I mean, that, that’s what we’re here and that’s what we’re fighting to do. Be able to, I mean, we haven’t, for example, we were talking about price increases this year.

We printed a new menu and, and, our m- all our menus are, pr- we’ve got a good price points, like I was just alluding to. you can get a burger for, 10, 11, 12 bucks or a, a, a hand-cut chicken entree, or some, or wings for a good price with us. But, we didn’t go up on prices this year just because, [00:15:00] I think, I think that’s gonna be a, continue to be a huge sticking point for guests.

Tal Clark: The consumer, no doubt,

Spencer Baumhower: And then, and we’re gonna do, we’re a very guest-driven company too. We have another slogan, “Every guest, every time,” and what’s cool with us, too, I mean, I go in a lot of our restaurants and we’ve got a lot of relationships with our guests. So a lot of times I’ll get texts.

I’m like, “Hey, why are we going up, why is the burger a dollar more today?” So, we work hard to look out for our guests and every decision we make through that lens of our guests and our team, and I think that helps us.

Tal Clark: That sounds great. Well, super Spencer, real quick, what is, what’s sort of the next step in Aloha? What’s in store for you guys in the next year and a half, two years? 

Spencer Baumhower: Yeah. So, we just, like I was just telling you, we just opened a brand-new Baumhower’s. Gorgeous store right off of I-65 in Millbrook, Alabama. so if you’re on the road cruising through Alabama, [00:16:00] stop in. We’ve been open for right around eight weeks now. Been the number one store in the company so we’re very blessed with that.

But, right now, kind of our plan is to continue to fill out the rest of Alabama. We’ve got a couple more opportunities, that we’re, that are o-on the board, right. 

Tal Clark: Yep. 

Spencer Baumhower: Working with Baumhower’s. We’re very close. We just signed a… I guess I can announce this. We just signed a lease for another Dolphin’s Las Floriditas actually in downtown Montgomery.

Tal Clark: Sweet. 

Spencer Baumhower: So and we’re really excited about that. And the Dolphin’s Las Floriditas team are stoked about that as well. And then Wingfingers, we’ve got a couple more opportunities. So, plan right now is to, we’re working really hard on continuing to fight the fight, execute at the stores we got now and be able to provide a leg… continue to provide a legendary guest experience and hit our marks. And but, and just kinda take the growth opportunities as they come, right? And, [00:17:00] so that’s, kinda where we’re at right now. But we’re working really hard on just being the best we can be and developing some really strong leaders.

So. 

Tal Clark: That’s great. That’s great, man. Well, look, let’s finish with a few rapid-fire questions here. I’ll try not to ask things that we’ve already done a little bit here. But real quick, is there a habit or routine that you follow every day?

Spencer Baumhower: Yeah. I’m a huge faith guy. Pro- big, big part of that’s my parents. So, one thing that I try to start my day with is reading scripture and reading the word. So that’s something I work really hard to do. It kind of goes back to the servant leadership thing. So, Jesus was best servant lea- leader to ever walk the Earth, right? So. 

Tal Clark: Yep. 

Spencer Baumhower: Really try to start my day with that every day

Tal Clark: That’s great. I’m right there with you, man. So, if you didn’t work in the restaurant industry what would you be doing?

Spencer Baumhower: [00:18:00] That’s a great question. I love sports. I love, I still have got a lot of that competitiveness in me and just loving to compete and loving… I love people, love serving people, so maybe a coach of some high school, coach maybe, where I can still have impact on young folks and be involved in the sports world or maybe a pastor somewhere.

I don’t know.

Tal Clark: Yeah, there you go. That’s great. All right, and then lastly, with the college football season upon us, what can we expect from Alabama this season?

Spencer Baumhower: Yeah, I don’t know. So we at our Millbrook store, so, we, we, host the Hey Coach show, we’re the official watch party for Alabama Athletics and for Auburn as well. So we host Tiger Talk Live from our store in Auburn. And so that’ll crank up in a couple of weeks.

And then forever we hosted it with Coach Saban, and now it’s the Coach DeBoer Show, and we do the same thing at Troy. So we, we h- we actually did the first [00:19:00] show of the year from Millbrook last night. Dad was there, Chris Stewart, a lot of some, some former athletes were in the building.

And so they were talking about it and I think it’s gonna be a good season. I got a lot of faith in Coach DeBoer and what he’s got going on. There was a huge emphasis put on getting a little bigger on the D-line and working on the offensive line and the running game.

So, I don’t know who the quarterback’s gonna be yet, so, gotta… But both options, Keelon and Austin Mack are gonna– they’re both great guys and very talented, so we’ll be in good hands either way. But, it’s looking like it’s gonna be a really, a r- really good season. I think a lot of people are sleeping on Alabama, so.

Tal Clark: There you go.

Spencer Baumhower: Very strange to say.

Tal Clark: Yeah, very strange for sure. So, well, look, that’s great. I know we’re all looking forward to football and really appreciate you joining us today, Spencer, and appreciate your guys’ partnership. Your hands-on experience has provided many valuable insights today for our audience. You can find [00:20:00] Spencer on LinkedIn.

We’ll link to his page in the show notes and you can also learn more about his business at alohahospitality.com. You can follow along with new episodes at instant.co/podcast or wherever you get your podcasts. Please share the episodes and leave a review. Thanks for tuning in to the Instant Payments Podcast.