From AOL: Boloco, a Boston-based burrito chain, pays entry-level floor workers $9 to $10 an hour, with some veteran workers make up to $17 an hour. And as of this year, the minimum starting salary for a restaurant manager is $70,000 a year. The cost of the meals are in line with other fast-food chains, too, running from $4 to $7. Business is thriving, with 464 employees and 21 outlets sprinkled from Washington D.C. to Rhode Island.
Pepper said he actually feels he should be paying all his employees even more -- the "living wage," which MIT notes is the "hourly rate that an individual must earn to support their family, if they are the sole provider and are working full-time." For Suffolk County in Massachusetts, that is around $12.85 an hour for a single adult, according to MIT's living wage calculator. But Pepper said he "feels the same pressure to get the right bottom line. So it's about finding the right balance -- and that includes doing the right thing."
Boloco also tries to make working conditions appealing. There are "relaxation lounges" that contain flat-screen televisions, a $50 monthly transportation budget for each worker and subsidized English as a second language instruction, as the Washington Post reported.
Doing 'right' means lower profits
Pepper conceded he isn't yet consistently reaching profit margins of 20 percent or higher, which many other fast food chains have. On average, his company is closer making a 17 percent profit a year, he said. But he is happy with that, and he says his restaurants have seen an increase in same-store sales every year since the chain's inception, save for 2003 and 2009. And he believes his model will "one day mean higher profits," he confirmed by e-mail.
Turnover is also much lower, thanks to the higher wages. The restaurant industry as a whole however, experienced a turnover rate of 95 percent for hourly workers back in 2011, as the industry magazine QSR reported. His turnover last year was about 64 percent. "Turnover is expensive and we are able to avoid some of it."
Pepper's not alone in trying such a "good jobs" model. Shake Shack, the hamburger chain, gives employees a monthly bonus of up to 1 percent of total revenue, merit bonuses and medical benefits and a 401(k) plan for anyone working over 25 hours a week. Mexican eatery Chipotle provides benefits and two-weeks paid vacation for entry-level workers, and also has an intensive promote-from-within culture. The company's restaurateurs also enjoy an average salary of $60,000 a year.
Moo Cluck Moo, a burger and sandwich chain based out of Detroit, pays its employees, called "culinarians," a starting wage of $12 an hour, which increases to $14 an hour after employees spend six months on the job. Workers also are provided with specialized training towards an internal baking certification.