Experimental profit-sharing restaurant in Somerville hits milestone

Juliet, joint venture of chef Josh Lewin and Katrina Jazayeri, operators of the Bread & Salt pop-up who paid dues feeding the cocktail-sippers at Wink & Nod in the South End, generated a fair share of buzz when it opened last winter in Somerville’s Union Square, and it has earned a steadfast following in the last 14 months.

Why not? Juliet is, in many ways, something entirely new. In the space that once housed the Sherman Cafe, Lewin and Jazayeri pair fine-dining quality and service with a laid-back atmosphere for breakfast, lunch, and dinner—not exactly something found on every corner.

But what’s most intriguing about Juliet is its business model. For starters, the restaurant is one of very few establishments in the region that operates completely without gratuity. That’s right—no tipping. Juliet runs on Open Book Strategy, a business model that prioritizes staff participation not just on the floor or in the kitchen but in the business of the restaurant itself, teaching each employee about overhead, profit margins, rent, labor costs, etc. And it pays them via a baseline hourly wage and quarterly shares of profits—the first checks of which were cut last week.

“We are greatly appreciative of our staff for being so open and patient with us,” Lewin said at a public meeting hosted at Juliet last week to celebrate and to discuss the process of operating on a profit-sharing model. The chef continued: “There wasn’t a model to compare us to when we opened, but we knew we didn’t want to be used as an excuse for the tipping model to be okay.”

And what’s so wrong with tipping? Well… a lot, really. But the short version is that if your employer isn’t paying you fairly for your time you can, in certain spaces, actually end up working for free. Also, when your income is based almost exclusively on tips, work culture can be downright demeaning—when the people you work for aren’t responsible for the bulk of your paychecks, any reciprocity between owners or salaried management and staff can break down quickly.

“We had the mission of creating a great place to work as being part of what we create with Juliet,” Jazayeri said. “We suspected compensation was at the bottom of a lot of issues in the industry. Harassment, turnover, wage theft, these all have tipping as a common factor.”

“Compensation has to be addressed differently,” she added. “We’re not going to have a tipped workforce.”

With profit sharing also comes a more level playing field for back-of-house staff. It’s no secret that cooks and dishwashers, often pulling shifts that are twice as long as those worked by the floor staff, aren’t fairly compensated.

“There is a canyon between front- and back-of-house [in terms of income in most restaurants],” said Noah Clickstein, a server at Juliet. “I would walk with three times what the back-of-house was making. And the lack of unity and culture drove people away. Which is why I love being here.”

“It changes everything from how you work with each other to how you treat guests,” said sous chef Will Deeks.

By being paid quarterly shares of profits and having a hands-on understanding of what the restaurant’s finances look like, each staff member has a stake in how time, money, and resources are allocated.

“Talking to people about where money goes shifts attitudes,” said Deeks. “It eliminates any ‘not my problem’ mentality. We all have a stake.”

While this all sounds excellent, you’re probably still wondering: Does it pay the bills?

“Front-of-house took a hit financially,” said Katie Rosengren, Juliet’s operation manager. “I make less money than I probably could, and less than I have, but I don’t necessarily look at it in those terms. I have decided this is a career … If I look at it in terms of money I could leave, make more money as a server somewhere else, but be burnt out, not have health insurance, I wouldn’t get maternity leave when I want to start a family … The benefits of this job outweigh the financial differences for me.”

Ten employees had shares in the first profit checks that were cut last week. Each share is weighted by the number of hours each staff member works, much like in a pooled house where tips are divided among all front-of-house sections based on hours and job title (e.g., an hour of a bartender’s shift qualifies for a higher percentage of tips than an hour of a bar back’s time on the clock).

People have the right to own a business, Lewin said, but being a business owner does not entitle you to the financial success of the restaurant.

“The people working for us should be folded into that success,” he said.

Copyright 2016 Haley Hamilton. Terms of Service is licensed for use by the Boston Institute for Nonprofit Journalism and media outlets in its network.