In this Weekly Wrap, we’re looking at robot employees automating tedious kitchen tasks, the lengthy waiter spiel, value coming back to McDonald’s, and more.
No Tax On Tips Update
The Headline: “Podcasters and influencers: The unexpected jobs covered under Trump’s ‘no tax on tips’ plan”
The Source: AP
What You Need to Know:
The provision in the law signed by President Donald Trump in July eliminates federal income taxes on tips for people working in jobs that have traditionally received them. It’s temporary and runs from 2025 until 2028. It applies to people who make less than $160,000 in 2025.
The Yale Budget Lab estimates that there were roughly 4 million workers in tipped occupations in 2023, which amounts to roughly 2.5% of all jobs.
The administration was required to publish a list of qualifying occupations within 90 days of the bill’s signing. The full list of occupations is located on the Treasury Department website.
They are broken down into eight categories, including beverage and food service; entertainment and events; hospitality and guest services; home services; personal services; personal appearance and wellness; recreation and instruction; and transportation and delivery.
Among other jobs exempted from tax on tips are sommeliers, cocktail waiters, pastry chefs, cake bakers, bingo workers, club dancers, DJs, clowns, streamers, online video creators, ushers, maids, gardeners, electricians, house cleaners, tow truck drivers, wedding planners, personal care aides, tutors, au pairs, massage therapists, yoga instructors, cobblers, skydiving pilots, ski instructors, parking garage attendants, delivery drivers and movers.
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“The larger and far more uncertain effect would stem from behavioral changes incentivized by the bill, such as substitution into tipped employment and tipped income, which would increase the bill’s overall cost,” states the report, which was written by Ernie Tedeschi, the director of economics at the Budget Lab.
Our Take:
There’s a lot to unpack here. First, there is one major shift: Treasury’s preliminary “no tax on tips” list is broad. It doesn’t just capture servers and bartenders — it pools in chefs, cooks, dishwashers, bakers, and prep, i.e., most of BOH, if they actually receive tips. (Important note: this is a federal income-tax deduction on qualified tips, not the FLSA “tip credit,” an entirely different animal.)
My bet is that most operators keep the status quo, but some will push the limits to bring BOH into the pool, some to lift the whole house and be more equitable, and others to take advantage of the rule and pay less to BOH. Either way, it’s going to get sticky. It’s important to remember: this law doesn’t rewrite tip-pooling or wage rules; those still live under DOL/FLSA and state law.
Service fees aren’t tips. They’re treated as wages and don’t qualify for the “no tax on tips” break, which will be a setback in markets where the service charge is standard (Miami, parts of California, etc.). And I don’t see Miami changing that culture anytime soon.
Also: operators are still on the hook for payroll taxes (FICA) on tips. The new law doesn’t change that, and for restaurants, the employer FICA-tip credit remains what it was (the expansion mostly hit beauty/spa). So the bottom line impact to the business is minimal; the benefit flows to the employees. The program is temporary, slated to run through 2028, though I’m sure there will be a lot of discussion whether to extend or terminate it well before then.
As with all tax matters, make sure to consult your tax advisor or CPA to make sure you are compliant with local laws and regulations about tipping, tip-pooling, and reporting.
The Spiel
The Headline: “The Spiel Has Become a Scourge”
The Source: Grub Street
What You Need to Know:
The Spiel, for anyone fortunate enough to have somehow avoided it, is the increasingly long monologue that every waiter in town must now deliver to tables at restaurants of a certain price point at the start of each meal to talk through … menu highlights? Things that might not be clear? Dishes that the kitchen would really like to push? Having now been subjected to the Spiel at dozens, if not hundreds, of restaurants over the past couple of years, I’m not entirely sure what its real purpose is. A server reads through a grab-bag selection of some courses, explains a few ingredients or maybe recommends something else, but there’s never much rhyme or reason. For how often the Spiel is delivered, there seems to be little consensus on how exactly it should play out.
All Spiels do have a few elements in common: They are always halting, never not awkward. A Spiel breaks up the flow of conversation at the table and grinds the night to a stop. I am reluctant to single out any one restaurant because every place in town trains its staff to do this. I can’t remember the last time I didn’t get Spieled. But I do know its recent resurgence coincides with the post-COVID rising of prices, the transformation of even small dining rooms into luxury dens, and the renewed emphasis on hands-on service.
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I’m not suggesting we eliminate all Spiels, but I do think we need to impose a time limit: 45 seconds. Servers should be able to Spiel their way through a menu in under a minute. Less is more. Hit two or three highlights and let’s get on with things. We’re hungry, after all. We’re ready to eat.
Our Take:
I couldn’t agree more with this take. “The Spiel” has gotten out of control, and while the writer is in New York, the phenomenon isn’t confined to the city. I’ve sat through some painfully long versions in Buffalo and the suburbs of Dallas, among many others, and it’s everywhere. The piece nails why it’s proliferated (post-Covid price creep, luxury vibes, heavier hands-on service) and even offers a fix I like: cap it at 45 seconds. Hit two or three highlights and let people eat.
I think the element that is mostly forgotten is reading the table. It's not something enough operators train their staff on. Having been in restaurants for 30 years, you can tell when someone’s demeanor when they sit down and what they are there for. Acknowledge it and adjust. Many are taught the spiel, but not how to step in without interrupting a conversation — or how to recognize when it’s falling on deaf ears. It’s okay to start with a simple “Have you dined with us before?” or “Any questions on the menu?” Some guests don’t want specials, some guests know what they want before they sit down.
And yes, some concepts genuinely benefit from a quick orientation — family-style, small plates, or dishes that need a brief explanation — but keep it tight and useful. And if it truly takes three minutes to explain the menu and how it’s served, maybe it’s time to retool the verbiage on the menu. No one wants to sit through an extended version of how the lamb was braised when they are hungry.
Robot Employees
The Headline: “Meet the Robots Making Your Restaurant Meal”
The Source: Food & Wine
What You Need to Know:
Last year at Chipotle, employees prepped over 5 million cases — nearly 130 million pounds — of avocados. But in September, at one Southern California Chipotle location, a robot stepped in to help. The Autocado has one job, and it does it well. It can process up to 25 pounds of avocados at a time, cutting, coring, and peeling a single avocado in approximately 26 seconds. Once the bot finishes its work, human employees can make the guacamole in half the time it used to take. By automating this tedious, time-consuming — and, at times, dangerous — task, employees spend less time slicing and more time assisting guests.
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The obvious implication — that robots replace human workers — is marginally true. But often, says Jessica Kramer, a hospitality industry investor and adviser, “It’s replacing people that the restaurant can’t find.” The average restaurant employee works at a job for a little over three months, according to data from restaurant scheduling service 7shifts.
Sweetgreen opened its first automated restaurant, dubbed the Infinite Kitchen, outside of Chicago in 2023. It resembles a giant walk-in salad vending machine, equipped with a series of large tubes programmed to dispense perfect portions of prepared ingredients into bowls. It can finish an order in as little as five minutes. Human employees add finishing touches too delicate or tricky for a dispenser, including, funnily enough, avocado, sliced by hand — the old-fashioned way.
By the numbers, the Infinite Kitchen is, frankly, killing it. The robot-assisted restaurants produce up to 500 bowls per hour. They require fewer employees to run, so the company saves on labor costs. Inside, customers tend to spend more money per order, making these stores more profitable than their traditionally staffed counterparts. Early data suggests employees at these stores are happier, quitting less frequently.
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Of course, not every bot makes the cut. Chili’s tested a handful of robot servers in some locations but ditched the program after a couple years. Kernel, a vegan concept from the Chipotle founder Steve Ells, received a ton of buzz for its star employee: a custom-built bot tasked with moving food around the kitchen and in and out of ovens. And yet, it closed its first and only location in February, just a year after opening.
Our Take:
This article ran a few weeks ago, and it’s worth a look given where labor is at in this country. We’ll keep seeing more innovation here, especially around the tedious, and often dangerous, kitchen tasks. If bots can reliably take on the high-injury jobs, we could see fewer workers’ comp claims and, maybe, lower premiums (yeah, I know, wishful thinking). It could also ease some pressure points, mainly labor.
But there’s a real qualifier: cost. Everyone mentioned has deep pockets — even the vegan concept Kernel. They’ll be seen as the trailblazers, but we’re likely a ways off from these tools being affordable for independents. For now, software/AI services are the most immediate and accessible. The hardware will get cheaper; some will fail, and others will become institutional over the next few years.
McDonald’s Extra Value Meal
The Headline: “McDonald’s is bringing back Extra Value Meals”
The Source: CNBC
What You Need to Know:
Starting Sept. 8 and for a limited time, McDonald’s will offer a $5 Sausage McMuffin with Egg meal — which comes with Hash Browns and a small coffee — and an $8 Big Mac meal that includes medium World Famous Fries, and choice of medium soft drink.
They join the $5 Meal Deal, launched last summer, and the McValue platform, launched in January, as part of the chain’s strategy to re-gain its reputation as a value leader.
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The return of Extra Value Meals comes as McDonald’s — and most of the industry — contends with negative traffic that is particularly pronounced among lower-income consumers after three-plus years of menu price increases taken to offset lingering inflation.
McDonald’s has been battling an eroding value perception for at least a year, which in part contributed to two rare negative quarters of same-store sales in Q4 2024 and Q1 2025. The company reported a second quarter same-store sales increase of 2.5% in the U.S. business, driven by the McCrispy Strips launch, the Minecraft Meals promotion, as well as “good progress on value offerings,” according to chief executive officer Chris Kempczinski.
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Executives added that such pricing requires a balance between core items to protect margins, as well as national value price points that are “significantly incremental.” The nationally advertised pricing requires deep collaboration with franchisees, who also recently voted to extend the $2.99 Snack Wraps price point to the end of this year.
Our Take:
McDonald’s value proposition — and, truth be told, most of quick service — has taken a beating the past two years. Chili’s, a sit-down brand, saw the opening and went on the offensive with its 3-for-Me platform starting at $10.99, pitching “better than fast food” value. It was about time McDonald’s got the hint: Extra Value Meals return Sept. 8 with a $5 Sausage McMuffin with Egg meal and an $8 Big Mac meal, positioned at roughly a 15 percent savings versus ordering à la carte.
We say it pretty much every week: value, value, value. It’s the crux of nearly every diner’s decision right now — quick service, fast casual, or full service — and keeping key deals under that $10 line clearly matters.
The challenge is balancing perceived value with the real costs. Everything still needs to be profitable. If you’re not careful, and don’t engineer the menu thoughtfully, you can sell more and make less. McDonald’s can lean into the scale; independents can’t. Be specific and surgical with the deals, build these specials with disciplined COGS, and let the numbers, not the marketing, decide what stays. (McDonald’s is touting ~15 percent savings; that margin has to come from somewhere.)