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Why Chili's Won't Be Eliminating Tips Anytime Soon

Brinker's CEO is sticking with the traditional service model.

Mike Mozart/Flickr

Danny Meyer may have persuaded some of his cohorts to do away with tipping, but the CEO of Dallas, Texas-based Brinker International — the parent company of Chili's Bar & Grill and Maggiano's — is not one of them. "We like it from the standpoint of it allows servers to really understand the importance of great service and what's in it for them when they provide great service," Wyman Roberts told CNBC. "Right now, we don't think that's where we need to go — especially on a national basis."

Roberts may not have the sort of name recognition that Meyer currently enjoys, but the executive isn't without influence: Brinker has more than 1,600 restaurants and 100,000 employees across 30 countries and two territories, and serves more than one million people every day. (Take that, Shake Shack.) And yet, Roberts' position notwithstanding, these aren't exactly salad days for gratuities. In the wake of Meyer's decision to end the practice at his Union Square Hospitality Group restaurants, many have come forward to do likewise. The no-tip list now includes the likes of Eleven Madison Park, as well as restaurants from Brooklyn's Andrew Tarlow and Seattle's Tom Douglas, and, most notably, big chain Joe's Crab Shack.

As the first major chain to adopt a no-tipping policy, Joe's Crab Shack CEO told investors the move would reduce staff turnover, improve the quality of service, and even lower prices for customers. That stands in contrast to what Brinker's CEO thinks: He told CNBC that he generally associates no-tipping models with lower quality service.

Still, one has to wonder how Brinker will deal with the rising cost of labor in light of minimum wage increases across the nation — could menu price hikes be in store for Chili's and its other restaurants? The company did not immediately respond to a request for comment.

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