Restaurant Adds Anti-Disparagement Clause Because Its Anti-No Show Clause Wasn't Obnoxious Enough
from the PLEASE-TAKE-YOUR-BUSINESS-ELSEWHERE dept
Grill 225 has done the stupid thing of inserting a quasi-non-disparagement clause into its fine print -- something no one will actually see until they make a reservation. (h/t Venkat Balasubramani)
According to an 832-word “dining contract” sent to guests making reservations for five or more people, Grill 225 will exact a $50 per person penalty if the reservation holder cancels all or some of the requested seats within 24 hours of the party’s arrival. No-shows are subject to the same fee.That's one part of the stupid. A fairly strict and excessive cancellation policy in an unnecessarily long "dining contract." Understandably, no-shows and cancellations are a burden on restaurants, but charging large fees (and forcing people to agree to 832 words of fine print) is a great way to ensure fewer reservations and fewer diners. And does anything excite a potential diner more than signing a long "dining contract" before even having the opportunity to sample the food?
But it doesn't end there. Grill 225 feels some people might get a little testy when asked to shell out $50 per person for cancelling a reservation. So, it has added another mostly-baseless legal threat to its "contract."
Grill 225’s contract includes an additional clause: “By agreeing to these terms and conditions, the guest(s) and their party agree that they may be held legally liable for generating any potential negative, verbal or written defamation against Grill 225.”Now, if by "potential defamation" this clause means "defamation," then the clause is wholly unnecessary because defamation is actually something you can take someone to court for without their signature on a "dining contract."
So, the only thing left to be "enforced" by this clause would be stuff that isn't actually defamation, but whatever the restaurant considers "potential" defamation... which would mean things that aren't legally actionable. But the clause makes it appear as though that sort of thing would also be targeted, especially if the complaint revolves around excessive cancellation fees.
Since this was reported, Grill 225 has walked back its "defamation" policy, saying it was only meant to discourage no-shows and fee-related retaliatory reviews.
It is the intent of the provision in question not to control honest and experience-based opinions, but to prevent false comments made in retaliation for our enforcement of an industry practice, to charge large parties for no-notice no-shows.And it has apparently removed the clause that served no purpose other than to foster ill will in potential customers.
Much like revisions made in menu details, restaurants often must revisit policies and procedures. We have done so and our policy has been re-written to prevent any misunderstanding. It has never been the intent of Grill 225 to limit our customer’s right to opine about a visit at our restaurant. In fact, we welcome both accolades and concerns. The restaurant business is ever-changing as are the demands of our diners.We learn and react to comments about our restaurant constantly and we greatly appreciate open and honest communication about what we are doing, right and wrong.This is the way it always should have been, but the insertion of a clause that dangled the threat of litigation over the heads of unhappy diners was completely the wrong way to approach the perceived problem. If the business was so concerned the public would react negatively to its no-show fee, perhaps it should have taken a closer look at that, rather than trying to proactively quell complaints with some dodgy legalese.
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Filed Under: anti-disparagement clause, cancellation policy, reviews, social media
Companies: grill 225
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Our full satisfaction guarantee:
And then the patron wakes up and the smile on his face slowly subsides.
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Our even fuller satisfaction guarantee:
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Legalese
It seems to me that people will agree to anything, as long as they're on the internet. If Walmart put a lawyer at the door and made people sign the same agreement as walmart.com before entering (5808 words!), they'd be out of business.
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First part seems fine
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Beyond the otherwise legally unenforceable nature of the clause, the guest(s) can't agree to a contract on behalf of their party.
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Re: First part seems fine
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Of course going after those that post bad reviews because of that is something that is (or at least should be) illegal. People have free speech. But I would agree that those who send bad reviews because of that shouldn't really be taken that seriously and the solution the restaurant should have is to counter this bad speech with more speech. The restaurant should counter criticisms by stating that the people who reserved the spaces were informed, ahead of time, that there is a cancellation fee. And perhaps the restaurant doesn't mind deterring business from people who are likely to later cancel and wants to ensure that those that do reserve actually show up. It really depends on the restaurant's target audience. Just because Techdirt thinks the restaurant should try to target the types of people who would cancel and be unwilling to pay a fee doesn't mean that's who the restaurant wants to target. It's their business, they can run it how they like and everyone has their own preferences on how they wish to run a business. There are other restaurants and I'm sure this restaurant realizes that they may lose customers because of their policy but they have chosen that this is how they wish to run their business and other restaurants can run it differently.
What the restaurant could do differently (and perhaps they already do this, not sure) is perhaps charge for reservations ahead of time. In a senses then this is the cost of a reservation whether you show up or not. This will reduce the expensive cost of having to go after someone who doesn't show up and doesn't want to pay after the fact.
and I really don't see it as bad business. Heck, Costco charges for membership if you just want to show up. Many businesses require a deposit of half the cost of the work before they start any work lest customers order something and, later, change their mind after the work is done. It's often standard business. The restaurant has costs, they have to hire employees to prepare for their expected guests and buy the required amount of food and drinks ahead of time to make sure it's available for their expected guests. Food rots and is perishable, scheduled employees get paid regardless of whether or not the guests show up. Plus there is opportunity cost, the guests not showing up takes up space for other guests that could have reserved ahead of time. I really don't see why Techdirt is making such a big deal out of the $50 cancellation fee, if you don't like it you can go to another restaurant and you're probably not the type of customer they want anyways even if they lose you.
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Don't like it, tough
Oh, wait...
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Re: First part seems fine
Business is risky, and few more risky than restaurants. Consider that they are not only retailers but that they manufacture what they retail. Anyone starting a restaurant knows this, at some level, and accepts that risk by merely opening their doors and accepting reservations which in the long run are merely a method for controlling available resources. Passing the responsibility for controlling a businesses resources along to the customers seems a bit out of bounds.
I would think accepting standby reservations would possibly be a better way of mitigating the scarce resource situation, but charging because one diner does not show (maybe they got sick, maybe their flight got delayed, whatever) smacks of greed and does not resolve the actual business issue.
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Re: First part seems fine
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Re: Re: First part seems fine
Heck, there are hair salons that charge $10 per hair cut and there are ones that charge $80 or more (for guys and probably even more for women). The ones for movie stars charge way way more, probably in the hundreds if not thousands just for all the makeup and whatever it is they do. There are $500 dresses that, when you look at it, you'll wonder why the heck does such a simple dress cost so much, and I know women who have seen a dress that they like and spent that much on it (oh, they can afford it). While I wouldn't spend $80 for a haircut who am I to tell anyone else how to spend their money. I know people that have spent $500 a night just to stay in a fancy hotel on vacation. Something I probably wouldn't do with my money even if I could afford it but, hey, it's their money and they can spend it however they like.
and if that's the type of people this restaurant wants to attract that's their business. Maybe they don't want to attract the type of people that would be unwilling to pay less than a $50 cancellation per person fee. You have no merit to judge them or to judge the type of people they wish to have in their business.
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What kind of customer is it they don't want? Paying customers? Customers unwilling to bend over?
Although I have never been a no-show to a restaurant, if I became aware that a restaurant had such a policy I would certainly never eat there. Those are restaurants who hold their customers in some degree of contempt.
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Re: Re: First part seems fine
But this is why free market capitalism is the best way to handle this. If the business is so risky that people wanting to start it are going to be discouraged by the fact that they can't recoup the costs of those that don't show up and hence may not be profitable few will start a restaurant. This makes restaurants more scarce. The cost will get forwarded to the customers one way or another and if someone reserves a seat and doesn't show up the only way the restaurant can make up the cost of this is by passing it onto other customers in the form of higher prices. No, why should those that are willing to show up when they reserve a seat be forced to subsidize those who make reservations and don't show up.
Not having these fees also opens the doors to sabotage where one restaurant can have someone make reservations and cancel just to harm their competitor and increase the demand for itself.
The free market is the best way to resolve this, the government should stay out. So long as the restaurant states, ahead of time, that they charge a reservation cancellation fee I see nothing wrong with it. This will deter people from reserving and cancelling and help restaurants recoup their costs even when cancellations are made. This will help restaurants make a profit which will encourage more restaurants to enter the business which, from an economics perspective, will reduce the scarcity problem. This is an econ 101 issue. The solution to the scarcity problem isn't to make things even more difficult to restaurants by discouraging them from charging for reservations it's to make things easier on them. and if you don't get that then you should taken en econ class. Quantity supply is directly related to price/profits and being able to recoup your costs when people cancel and deter cancellations means more money which means a higher quantity supplied. More money for restaurants (as an industry) = more quantity supplied.
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- Keep a list of recent no-shows and refuse them advance reservations until they have at least N walk-in visits. Depending on how much a no-show hurts the restaurant, they could let the customer have M missed reservations before the penalty applies. A recurring customer who misses one reservation can "work off" the penalty without spending any extra money beyond the later meals they would have eaten anyway.
- Institute a policy that reservations expire after N minutes, so if you are late by more than that, it is implicitly cancelled. You can still get service if you are late, but you are now back in the walk-in queue.
- Make the reservation good for a table, but require the patrons to order when they are seated. This avoids preparing food that may go uneaten if the patron does not show.
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Re: Re: First part seems fine
Every business has to, in some way, pass on the costs of their resources to the customer in one way or another. In this situation the business is simply passing on the costs to those responsible for creating them instead of to good paying customers that didn't do anything wrong.
"but charging because one diner does not show (maybe they got sick, maybe their flight got delayed, whatever) smacks of greed and does not resolve the actual business issue."
No, not showing up and then expecting the restaurant to pass on their costs onto other customers that do show up smacks of greed. There is nothing wrong with the restaurant requiring people to take responsibility for their own problems instead of passing them onto someone else (like the restaurant who will pass them onto other customers). Just because your flight got delayed or whatever isn't the restaurant's problem and it's not the problem of other customers that were being denied a reservation ahead of time because you reserved and those that will be charged extra just because you refused to show up. It's your personal problem, you should bear the cost.
and there are restaurants that accept standby reservations but there is also a market for those that wish to reserve ahead of time. Why destroy that market (and the consumer utility associated with it) just because you think that all restaurants should only do standby reservations. Heck, there are hair salons that take appointments. Some people have a schedule to maintain or would like to plan their itinerary ahead of time and the market for that shouldn't be hindered by those that want to make reservations and not show up.
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But if a restaurant wishes to simply charge a reservation fee, which is a much more practical solution and attributes costs to those that create it when they create it, then that's their choice as well.
and believe me, if a restaurant has a very loyal group of regular customers that show up and make them a lot of long term money they will, in all likelihood, give those people a pass if, on one occasion, they don't show up for whatever reason. Most (at least relatively small) businesses do treat regular customers differently (better) than ones they never met. Though one often finds the opposite true for big businesses (ie: cable companies having promotions for new customers that don't apply to regular customers, ones that have promotions for first time customers that don't apply to long term customers. Maybe long term customers are more used to this type of treatment here in the U.S., I hear in other countries people treat long term customers better than new customers). But for a first time customer that is a lot less likely to ever show up the restaurant is less likely to be so generous and I don't necessarily blame them. They view it as a statistic, a first time customer is less likely to be a long term customer than an existing long term customer and so they will naturally treat existing long term customers better.
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My point is that I am a paying customer who keeps reservations. And I object to these policies and won't go to restaurants that have them.
Yet you said that restaurants don't want my business anyway, so I'm wondering what it is they don't want.
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If the customer knew ahead of time the terms and they had a temper tantrum about it when they decided not to show up and had to pay the fee then that's probably not the type of customer they want anyways. A temperamental customer that agrees to one thing and later decides they don't like those terms could be the type of customer the restaurant doesn't want. The customer, in the future, should make sure that if they make a reservation they will show up. and a customer that doesn't like those terms could find another restaurant, perhaps this restaurant doesn't want them anyways.
There are gyms that you can walk in and pay for the day and there are gyms that encourage you to pay a monthly fee to attend. There is a market for both and you can choose which one you like.
Likewise there are restaurants that take reservations and ones that don't and there is a market for those who are willing to pay a cancellation fee if they reserve and cancel. and this restaurant caters to that market. Others may cater to other markets. OK, so you, specifically, aren't in that market but you are only one person and there are other restaurants that will likely better cater to your market. To each his own and I really don't see one as being better than another just serving different markets. You are in one market and are not the target audience of a restaurant like this. Just like a store that sells surf boards and you don't surf. So you think they should sell computers instead. OK, big deal, that store is not for you. I don't see it as a problem and don't think it's something to obsess about. Different businesses cater to different markets.
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Perhaps, but that's not the sort of thing that can be relied on and so doesn't mean a thing.
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That's partly why different restaurants serve different markets. If every restaurant served the same exact market it would saturate that market. Serving slightly different markets enables different restaurants to extract a profit from different audiences.
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Re:
I think the opposite. If everyone started voting with their dollars, we'd ONLY have companies that treat their customers right.
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Re: Re: Re: First part seems fine
The $150 a night hotel has free Wifi. But at the $500 a night hotel, I have to go to the front desk, get a code, pay $25 a day, blah, blah, blah. What a hassle!
The $150 a night hotel has a free breakfast buffet. I go through and get whatever I want, as much as I want. At the fancy hotel, I have to wait on wait staff and I eat less because everything I order has additional time and financial costs.
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What I do have a problem with, though, is businesses that use government to hinder competition. I also have a problem with people complaining that restaurants are too scarce because it's so costly and risky to open a restaurant yet they want to implement policies, laws, and/or customs that limit the options of restaurant owners to find ways to make a profit so that they can continue to serve the market instead of going out of business (creasing more scarcity) and so that more restaurants can open and better reduce the scarcity issue. Because, surely, the best way to eliminate the scarcity issue is to make it even more difficult for restaurants to operate.
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Re: Re: Re: First part seems fine
Merit? Perhaps the wrong word was used here.
Anyways ... Who are you to tell others they have no "merit" to whatever? Here's a clue, most people do not care what you think and they will continue to laugh at things lie this.
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Re: Re: Re: Re: First part seems fine
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Re: Re: Re: Re: First part seems fine
No, the question I was asking/the point I was making, and the more relevant question/point, is who are you to judge them.
Not saying you have no merit just that you shouldn't be so judgmental.
"most people do not care what you think and they will continue to laugh at things lie this."
and who are you to represent 'most people'.
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"Design by Palas Software Systems"
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Re: Re: Re: First part seems fine
Please explain to me how I have in any way judged the restaurant with this reply? I simply pointed out to someone who wrote of $10 - $15 as a "small fee" that the one actually being charged is $50. For 99% plus of humanity, this is not a "small fee".
With that over, I also went to the effort of looking up this restaurant's menu. Most, if not all entrees are under $40. I know of plenty of people (myself usually included) who usually only eat an entree when they dine out, so the "fine" is higher than the meal would be for plenty of diners. I don't see how this can be considered a "small fee".
Note that I have not judged the business, only the appropriateness of the word "small" in the OP.
Now, pray, who are you to judge my, or anyone else's "merit"? Did God appoint you his (or her) heir then off him(or her)self?
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Last I checked $50 / plate was pretty ritzy.
Having a no-show fee of that value is odious surcharging.
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Paying for reservations ahead of time
http://www.wsj.com/articles/ticket-to-dine-the-restaurant-reservation-revolution-1401463548
http://ww w.npr.org/sections/thesalt/2014/08/05/337834577/no-more-reservations-exclusive-restaurants-require-t ickets-instead
As for the Anonymous poster saying they don't think charging a fee for disparaging a restaurant is illegal - so what if it's not? It's still wrong.
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Nuf said
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Re: Re: Re: Re: First part seems fine
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You are a potential customer. It is your responsibility to judge them (and every other business) to determine if you want to do business with them.
All I'm saying is that I judge restaurants who have policies like this very harshly and refuse to do business with them. This is not only my right, but my responsibility.
Note that I am NOT saying that they should be forced to stop doing business that way. I'm saying that I refuse to be their customer if they do.
How successful their business model is doesn't enter into any of this.
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Sure you did, right here: "and you're probably not the type of customer they want anyways"
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Re: Re: Re: Re: First part seems fine
I would wager that this restaurant does not have you in its target market.
A prime rib-eye is $79 and the cheapest bottle of wine is $70, (mains are $39-$79, entrees $34-$39) and it's inside a hotel. This is not a place for people who think $50 is a lot of money. An empty table there would be around $740 lost revenue for a table of four.
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It's true...
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Re: It's true...
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Imagine a 'waiting list' app that when there is a cancellation or they don't fill all the reserved seats that they update the list and it notifies the next people on the wait list who can fill that slot. Give them 5 minutes to confirm they want the spot and boom seats filled. Heck someone could create a centralized reservation app that bunches of places could sign up for. I need 2 for italian food, and if there was a cancellation for 2 boom the seats get filled. Its like there is an entire business model waiting to happen here, but archaic pen & paper and threats of fees make way more sense then getting the butts in seats.
But I guess it makes more sense to destroy the brand by using stupid legal terms that will drive people elsewhere. One does wonder if the $50 went to the waitstaff or to the bosses... betcha you know where it went.
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I had a dentist appointment today....
The lady asks me if I would be able to reschedule for this morning, as they didn't realize they had afternoon booked.
I told her I had a head cold anyway, and could we just make it for 2 weeks out.
After we get the date and time settled, her tone turns to that of a ticked off mom and she says "If you cancel and reschedule again, we will have to ask for payment up front!"
I was like, "Uh.....ok".
Then she gets all quizzical in her voice, like she didn't understand my confusion as she says, "Thanks for calling, have a great day".
I don't think she realized that she was the one that called me first.
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Re: I had a dentist appointment today....
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