Your 3rd Spot — a 30,000 square-foot eatertainment concept in Atlanta is not only making waves for its flashy, technology-supported yard games, table games, bowling, and arcade games. From the time the social dining concept opened in 2023, Your 3rd Spot was operating without a tipping model. Instead, the Amp Up1 Hospitality Management-owned brand had replaced gratuities with an automatic 20% service charge.
“The idea was, ‘What if they didn’t have to dance for dollars? What if we give them the tools to do their job and support them appropriately instead?’” Joshua Rossmeisl, founder and CEO of Your 3rd Spot, said. “We just pay them a higher hourly wage, and spread the service charge out amongst the entire team, everybody from the host and servers to the dishwashers and line cooks works as one.”
Since opening its doors, Your 3rd Spot’s turnover rate has been below 50%, which is a lot lower than the hospitality group’s other past concepts. This will be especially crucial as the brand looks to expand nationally.
“Our retention rates are a lot stronger, as well as the growth and development of our team members, which is crucial for a brand that is going to be growing all over the country,” Rossmeisl said. “They’re the ones that will help us grow this company. They’re the future leaders of this organization, and I need them to know that they’re taken care of by leadership.”
The service charge model has also surprisingly been received well by guests, he added.
“From a guest standpoint, I’ve heard nothing but positive things because guests don’t want to have to do math at the end of the meal, they’re like, ‘just charge me what you have to charge me,’” Rossmeisl said. “People like that, that’s just taken care of.”
Besides the no-tipping model, Your 3rd Spot also offers comprehensive healthcare and 401ks, and will soon be rolling out a college loan repayment program, which Rossmeisl said has been particularly popular with younger employees.
While the 20% service charge works well for now, Rossmeisl said ideally, he’d like to just work the service charge into the base price. This is a halfway point for now, as the culture around tipping begins to change, and more and more customers become tired of being asked to leave gratuity for every single purchase.
“The more you turn around those iPads and ask people to select how much they want to pay for a service, versus just saying, ‘this is what it costs,’ the more frustrated people become,” he said. “Guests think, ‘What is the value that I received when I leave your space?’”
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