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 Kevin O’Bold, VP of Finance at Ultra Steak, a restaurant company that operates brands including Aspen Creek Grill, Aspen Tap House, and Slim Chickens with more than 3,000 employees nationwide.

Kevin, thanks again for joining us. Let’s jump back in.

One of the things I wanted to pick up from our last conversation where we left off was you were talking about pay at the table and as someone who has been in and around the credit card, debit card, prepaid card processing business for about 20 years, I, along with probably anybody else in that space really appreciates that. I see restaurants today, especially normally smaller, privately operated restaurants that are giving discounts for cash, and it drives me a little crazy because the cost of handling cash is so much more than that couple of percentage points that you’re paying for that credit card use. [00:01:00]

And you mentioned that tips are going up because you’ve got pay at the table using your credit card, which again, everybody in the space knows that and tries to communicate that. The checks in the restaurants go up as well, right? If people are paying with a credit card, they’re gonna spend more money with you.

You’re not going to have any cost of cash handling and your employees get paid more with tips. Would you agree with all that?

Kevin O’Bold: Yeah, you nailed it.

I mean, that’s the ancillary benefits from the business side of things of why we can roll it out.

Tal Clark: Yeah, it drives me a little crazy. So that’s probably a little off topic here for us. But when I see that in a restaurant or any establishment, especially those that position themselves as higher end restaurants and you’re, and then you get a check that wants you to give you a discount for paying cash, I’m like, are you kidding me?

Anyway, let’s talk about. Let’s talk again about the tips piece of this and you mentioned tips are going up. [00:02:00] 

We’ve been working with you guys for a little bit on tips really since 2020 to make sure we’ve got you in a digital tipping environment and a pay card solution so everybody gets their money in real time. You’ve processed we’re showing you’ve processed more than 575,000 tips with us, totaling over $30 million along with another $6 million going to back of house employees’ payroll card. You’re also seeing a $52 average tip and a $80 average payout in 2025. And 7,000 all time active users.

From your perspective, just gimme a little bit on how partnering with instant and then just electronic payments in general has added efficiencies to your business.

Kevin O’Bold: Well, just you reading off those numbers just wow, that’s a lot of employees. That’s a lot of years that we’ve been doing this and just shows you how important tipping is to a full service restaurant. It brings me back to just ask like, how did we do this beforehand? It wasn’t that long ago, but it seems once you do it, you can’t go backwards. [00:03:00]

We used to have stores that would handle cash in envelopes. Obviously, they would not want to pay that cash out daily. They’d hold onto it. So you’re talking probably a week, maybe even two weeks if we decided to put it on a paycheck that those employees are getting their cash. Sometimes they’re confused on what those calculations are.

It’s not really transparent, it’s just someone hand you some cash, maybe showing you a report, but it’s a POS messy report in the backend. They, they don’t know really how to read it, maybe understand it. And you’ve gotta somehow communicate that to payroll for W2 purposes. They’ve gotta know how to record it at the end of the year.

And I just think that it had so many benefits to us to go electronic and really help the employees experience as well, which is what really sold us on it. We’ve talked about they can now receive their tips daily, or even we run a lunch shift and a dinner shift. We can do a mid shift and they can have their money before they walk out to the parking lot to go home.[00:04:00]

That improves their financial situation and their personal cash flow. I also think some of them use just the tip cards as a bank in a way.

We have so many underbanked employees, so it’s a free mobile app that they can use. So it’s a quasi banking relationship that they have.

And I think it increases their transparency. They can see the transactions coming in and out. There’s that audit trail that we can have on the backend to help communicate that with them. And then I’ve talked about before, just the safety aspect. We were very concerned that we had several people, 20, 30 people every night leaving in a dark parking lot, 1:00, 2:00 AM after a long shift, and then they’ve got cash in their pocket.

And we didn’t like that safety concern for them. So just being able to move it electronically and everyone knows that we’re doing that increases that peace of mind.

Tal Clark: Yeah.

Kevin O’Bold: I think we talked about just the courier service changes as well. I did not [00:05:00] expect this. I knew it would help a little bit with the cash handling, but we were able to cut our courier service in half after we rolled this out.

So just not having to deal with the courier service or picking up and just how expensive that is. And, sometimes they’re late, sometimes they don’t bring their change order. Well, the less cash that we have, the less of concerns those were for us. We’ve eliminated those issues.

Tal Clark: That’s great. For anybody that’s listening and that may not be familiar with that. And, I’ve heard some details around cost at other places, but what does that courier service typically cost? Is it, do they charge by trip or by the volume of money they bring? How do they charge and what does that look like?

Kevin O’Bold: Yeah, they’ll nickel and dime you. It’s very much, it depends where the vault is that they have to deliver the cash to. It depends how much time they have in your restaurant. So I think a lot of our locations are down to eight minutes or less. You’ve gotta get ’em in, you gotta get ’em out.

You gotta find a manager that can open the safe for them, have them count it, get your receipts and get them out of there. Because they’ll start charging you extra if they have to be behind on their shift for the day. You’re, you’re trying to manage that the best you can, but you got a thousand things to worry about during a shift at a restaurant. [00:06:00]

And it’s almost like they’re not held accountable when they have to be at your back door every single day and when they’re gonna be on time and be efficient. So you don’t know what you’re gonna run into with the safes too. They could have some kind of technical or connection issue opening it up and counting it.

Something could break. A spring could be loose. So you’re just managing that whole piece of the courier service process and it adds up real quickly.

Tal Clark: Yeah. It’s crazy. Go back to, again, you think about people actually doing things that might bring cash into a restaurant, which is just crazy. And the other way to deal with this, some places and they’re becoming more rare, some places have elected to push tips to a normal payroll cycle, which is typically two weeks.

We think that’s a pretty awful decision, especially from an employee’s perspective that would like to receive their money every day. Did you guys even ever think about that at all, or did you ever push any tips to payroll before this? [00:07:00]

Kevin O’Bold: Some locations we did that just because, I think it was at the time, the easiest way to, to get it all correct and get it in the employee’s hands in the best way. But you actually would start to see like a, from a recruiting and retention effort, new hires would come into our restaurants, never worked for us and they’re like, Hey, I worked down the street at this restaurant, and they’ve got tip cards. I get my tips in this way electronically at the end of every shift. So this is really hard to accept. Or we’d have retention issues where they would leave because they’d hear of a friend saying- ‘hey, come over here.’

You’ll get cash in your pocket a lot quicker. And that’s just something we didn’t want to lose to the competition on what seems something that’s simple that we can put in place. And if employees are expecting it anyway, we gotta deliver on that.

Tal Clark: Yeah, that makes sense. And it is one of those things that seems pretty obvious, right? You have employees who’ve been getting their money every day, it may have been cash. And we’re able to get you and others out of the cash business without impacting the way they have access to their money. [00:08:00]

Have you guys, what are you doing in regards to so we talked about getting cash outta the restaurants. We talked about the tips piece a little bit. What do you, what’s your feedback from the employees? Have you had much direct feedback from employees? I guess you’ve seen some of the benefits.

You’ve seen recruiting and retention benefits but do you get much direct feedback from employees about how you’re managing their tips and how they’re receiving pay and do they like what’s going on?

Kevin O’Bold: Yeah, it was, especially when we rolled it out, it was night and day and they said, we’re not going backwards. We like this a lot. We like having these cards and we found some unique ways to use it other than tips. Sometimes we roll out contests. We used to have to like, okay, we gotta go get a gift card or something at a gas station too, to hand out how are we gonna give them some reward?

Well, sometimes they just want cash. So you just say, okay, I’ll give you your contest award winner some money on your pay card. Other times it’s just unique ways of doing a per diem for travelers going to a new store opening. So it opened our mind to, okay, we can, we can use tip cards for that as well.[00:09:00]

So we keep finding different ways to use it other than tips. And so the employees love that, that it’s got the flexibility.

Tal Clark: Super. I don’t know if the team’s told you yet, but we’re working towards being a hundred percent virtual card. Goal of eliminating some of these plastics that you guys might be managing right now. Definitely we’ll stay in touch with you on that because things have changed so much in the last four or five years.

We’re talking about one of those things, right? Which is, let’s, cash has gone away, but then we want to get the remainder of the cash outta the restaurants. And that’s a big goal of ours in working with you and others. But also, many of these legacy card programs have been the same since I helped start one back in 2001.

And then there’s some others out there as well. But, using plastic cards for the last 24 years needs to go away and it’s time for it to go away. [00:10:00]

So that’s one thing we’re really focused on. So hopefully we can get that to you guys when you’re ready and eliminate the plastics that are there, and go completely virtual.

What are you seeing in regards to incentives? Do you guys talk about complex tip pooling or tips disbursements? I know we’re working with you now on some software to manage some of that. Talk a little bit about how that’s helped and what that’s meant for you guys as well.

Kevin O’Bold: Yeah, so once we got on the tip card kind of system we took it a level deeper and wanted to automate tip payouts, tip calculations, and tip pools. What was unique, I think, for our locations is that we really needed custom calculations per location. We rolled this out six months ago working with you guys and I’ve got 10 locations that we went live on, and all 10 had a very different way that they wanted to allocate their tips to their tip pool and different strategies that they have.

One would just be, it’s not easy to recruit certain support positions in the restaurant. I’ve got one store that says I don’t even want any hostesses in my pool because they’re easy to hire, but I can’t hire bartenders, so I wanna weight more of the pool payouts to bartenders so I can you know, recruit and retain them. [00:11:00]

Other stores are drastically different like to go volumes. And so just having those to go people also supported. Maybe busing or food running. Because we have lower volume to gos at that location, they can have a multi-purpose job getting them into the pool. And then we have a couple locations that have a service well, that’s really unique and how they’re working.

And the actual hours that they’re working. It’s not very much, but they want to be involved in the tip pool to make it worth their time. So just being able, the flexibility and customization. To let the stores keep doing what they’re doing. Because they know it works for their labor optimization and their recruiting.

But it also saves managers time because they don’t have to manage this on an Excel spreadsheet in the back office or try to explain it to whoever’s closed on the restaurant that night. It can be pretty complex and not really understanding how it works.[00:12:00]

And it could take a lot of time. It take 20, 30, 40 minutes at a high volume restaurant to get all this done at the end of the night. And so we just eliminated all that time and just said, log in. You may have one thing you need to look at just to do your checks and balances, and as soon as you click that button to pay everybody out, it’ll happen instantly.

And, we’ve got all the transparency on the backend.

Tal Clark: That’s great. It is great that it’s adding value to you. I did not realize that there was a custom by the restaurant that was a benefit to you guys. First of all, I think that’s great to hear that really gives your managers the opportunity to operate the store the way they need to operate and I think that might be unique relative to maybe larger concepts because I think typically what you hear is everybody wants a one size fits all. It helps them, I guess from a corporate perspective, maybe it helps to have more control and perspective of some, but it sounds like you guys are taking a different approach, which really sounds interesting.[00:13:00]

I’m sure this is bringing value to your managers and to your employees as well.

Kevin O’Bold: Yeah, and it was hard to find a partner that could do it custom. Because like you said, everyone goes the opposite way. Saying I’ve got a one size fits all. To be able to find that partnership has been really beneficial.

Tal Clark: That’s good. Well, let’s talk a little bit about what you’re seeing going forward, Kevin. What are some of the other things that, in your role you’re touching a little bit of everything within that restaurant business. What are you looking at that you would like Instant or someone else to deliver to you guys over the next three years?

What do you think, what’s the next big technology need for you guys that you’ve got your eye on?

Kevin O’Bold: Yeah. For us, I think forecasting sales down to a granular level, maybe incorporating AI is gonna be really important. There’s a lot of elements to forecasting sales. That’s hard to do. You can have a manager log from last year or last week to use your comps off of but forecasting your sales can hurt you either way. [00:14:00]

If you under forecast your sales, you’re getting slammed, the employee experience, the guest experience diminishes. But if you over forecast or under forecast sales, it can be detrimental to your business. We’ve got weather. To focus on concert seasons. Little league baseballs in town, traffic off the highway affected your sales for a given night.

And we always say to our restaurants to staff for the sales that you want, not the sales that you have. So when we’ve got three to four table stations, we’re really focused on making sure that we’ve got the people in place to drive sales. But forecasting is really the starting point. You build your schedules off of that your parts in the back of a house off of that and your ordering systems off of that.

So the tighter you are the better your margins are gonna be flowing down.

Tal Clark: Okay. 

Kevin O’Bold: And yet, yeah, go ahead.

Tal Clark: No, I was gonna say I’m pretty much a novice to that part of the restaurant business for sure. So when you’re talking about forecasting sales, is that, are you doing that by location? So is the manager’s responsibility to forecast back to you and the team at headquarters? [00:15:00]

Kevin O’Bold: Yeah, so we asked them to forecast out at least two weeks in advance. That’s how they set their schedules for two weeks. Some stores can do it on a more granular basis, but the tools that they have are sufficient, to some degree. But we still think just being off 50 guest counts or, a 100 bucks, 200 bucks here or there really can make a big effect when you multiply it out 365 days, 10 locations it’s a big swing one way or the other.

Tal Clark: Are there tools out there right now from an AI perspective that you think are valuable from a forecasting perspective, or do you think that’s still something yet to be developed, to be proficient enough to help you?

Kevin O’Bold: Yeah, the ones that we’ve looked at, they always seem to be add-ons and it’s hard to integrate them in. So it’s just another login, another thing to have in your system, in your tech stack.[00:16:00]

We really hope that the partners we’re with now can develop them and get it to where it needs to be. But we may have to, just find a partner that knows what we’re looking for and can have all of those elements built in.

You may have operator turnover in this high turnover business, and they weren’t there last year to experience that seasonality. They weren’t there to understand what that local market looked like. So AI can bring all those different variables into play and help your calculations and, and forecasting.

Tal Clark: Well, that’s interesting. It sounds like there might be a business opportunity out there for someone if nobody’s meeting that need yet. So anything else from a labor optimization perspective, compensation, anything else that you’re watching where you need some help or do you feel like you’re in a pretty good spot there?

Kevin O’Bold: I feel like we could always optimize labor a little bit better. Scheduling analytics seemed to be an opportunity for us just getting the right matrix set up being able to avoid overtime, having schedule enforcement go back to the time and attendance system. To make sure that they’re not clocking in before you say they’re scheduled for their shift.[00:17:00] 

And we really wanna dive deeper into performance metrics. We have a philosophy of you eat what you kill. We’re very results driven. So I want to see what your tip percentages are. Are they trending higher or lower? What are your comps look like? What do your check averages look like? When we have contests or LTOs, how much are you pushing those modifiers, being able to track down to.

How much are you pushing modifiers for somebody else? All those kind of factor into how you build your schedules. And like we said, in the high turnover en environment, it’s hard to keep up. Sometimes you really need a software and a tool that can manage the whole bit for you to make your, your labor optimized as much as possible.

But I think sometimes we. I get in this habit of just getting really excited about all these new tools, AI coming in, machine learning, and sometimes a lot of my operators have to slow me down, say, Kevin, sometimes eliminating a human element in the hospitality space is not the right way to go.[00:18:00]

We talked about doing this at pay at the table devices. I said, oh, you can get one that, that does both, that sends the order back to the kitchen when they take the order. Then it also has a payment device when they’re ready to, to close the checkout. And they said, yeah, but that, that purposely takes away a human touchpoint when you’re taking their order and writing it down, pen to paper.

So it’s something that we’ve been intentional to not touch and to not eliminate from the experience. And I’ve also been really interested in dynamic pricing especially with to go orders delivery online. It’s been a good experience because to me it works in airlines and hotels and it has for decades.

Why can’t it work for restaurants? But just the consumer has had some backlash.[00:19:00]

I know Wendy’s tried it a while ago and they had some bad press about it. You really have to pay attention to your models and limitations. But, we, we’ve tested it and seen what it can do.

But, again, it’s just, it’s not the right time to do it. And add that confusion to the guests that it’s coming in, expecting a certain value and then you surprise ’em with hey, you’re ordering at this time of day, so the price has jumped on you.

Tal Clark: Well, I’m with you on a lot of things, but I can’t imagine if I went in one day, my hamburger was seven bucks and I went in two days later was nine bucks. Kevin, I might be a little irritated with you. 

Kevin O’Bold: Exactly.

Tal Clark: Well, look, you’ve had a strong career path at Ultra Steak and I’m sure it’s, you’ve got more to come and you’ve really done some great things at that organization, I think you’ve been ahead of the curve and payments and pay at the table.

And what we’ve done with you guys for tips and payouts and the whole deal. So what advice would you give to others in a restaurant or hospitality space that really are looking to maybe they’re part of a restaurant group today and they wanna move into a leadership role, or, or maybe it’s someone that’s, graduating from a university somewhere and considering getting in the hospitality space, what advice would you share? [00:20:00]

Kevin O’Bold: Yeah. I would say begin with the end in mind. It’s the Stephen Covey Seven Habits of Highly Effective People. You have to establish that clear vision, design the systems, intentionally build the leadership to get you where you want to go but also keep that balance between your, your people side and your metrics side.

Sometimes the high growth companies can be too numbers focused and you need to remember that human leadership element. Stop to give recognition and encouragement. And I think I’m also proof that you don’t have to come from the hospitality space to contribute value to an organization and help it grow.

So I can’t even cut meat very well, but I can help out in other ways. And I think just having the right people on the bus. Making sure they’re in the right seat is very important. You can have a lot of talented people, but if you don’t organize them in the way that they can best contribute to the team, you may not get where you want to go.[00:21:00] 

And I heard a really good quote from Jim Sullivan a long time ago. He defined what perfect hospitality was. He says ‘That’s when the guest doesn’t have to ask for anything.’ And I just thought, that’s impossible. There’s no way you’re gonna read the guest’s mind at all times. And anticipate what their needs are.

But it’s a really cool challenge, and something that we strive to achieve and always improve upon. So I think just striving for that perfection is really what it’s all about.

Tal Clark: Super. Well, Kevin, I think that’s great and I appreciate you, appreciate the partnership and I really have enjoyed our conversation. Thank you for joining us on this two part series for the Instant Payments Podcast. Your perspective on the restaurant operations, the finance and technology that we’ve talked about is incredibly insightful and we really appreciate your time.[00:22:00] 

To our audience. You can follow Kevin’s work and learn more at UltraSteak.com. And be sure to subscribe to the Instant Payments podcast at instant.co/podcast or wherever you listen. Leave us a review and tell us who we should talk to next. Kevin, thanks again and thank you for tuning in. Talk to you guys soon.