Restaurateur Danny Meyer has raised $220 million in a private equity fund earmarked to invest in businesses that “share his employee-centric focus,” according to the Wall Street Journal.
Meyer, chief executive officer of New York-based Union Square Hospitality Group, has implemented a program called Hospitality Included at many of his restaurants. Often dubbed his “no-tipping policy,” the program goes beyond simply building service charges into menu prices in favor of increased wages (though it does do that).
As he explained it onstage at the recent Skift Global Forum, Hospitality Included is meant as a means of transparency among workers in the restaurant, who share equally in the success of the restaurants in which they work. When he talks about the program, Meyer frequently cites the disparity between what servers earn after tips versus what back-of-house staff earns, noting that cooks and kitchen staff in New York are legally excluded from sharing in tips.
The private equity fund, named Enlightened Hospitality Investments LP, is a way for Meyer and USHG to invest in young companies he and his team feel are pushing these principles forward. The fund is responsible for USHG’s May investment in Portland-based Salt and Straw, a family-run ice cream business, and a recent investment in New York-based Joe Coffee.
Interestingly, Meyer tells the Journal that he plans to look outside the traditional restaurant model when choosing companies to support. “Every business is a hospitality one,” he said. Meyer also invested in reservations platform Resy, and pioneered its ResyOS operating system after reopening Union Square Cafe at a new location in 2016.
Meyer published his book, Setting the Table, over a decade ago, now regarded as a tome applicable to all aspects of any business. It appears he’s now putting his (and others’) money where his mouth is, applying the same principles he’s used in over 30 years in the hospitality business to other sectors, supporting change and innovation.
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