The restaurant business is a tough industry to make money in -- now imagine how tough it would be to make a profit when your customers control how much they want to pay for a meal. One restaurant in China has implemented a ‘"trust-based" payment system, in hopes of fostering good morals and virtue among patrons.
But so far, things aren't working out well for Five Loaves and Two Fish, a small restaurant with five tables and six workers who cook and clean at its location in downtown Fuzhou, in southeastern Fujian province. The restaurant, which offers cafe foods as well as hot dishes, said that it has racked up huge financial losses since opening in August, showing that customers aren’t necessarily inspired by a moral mission.
As part of the honesty system, patrons are also asked to wash their own dishes after their meal, and then place money in a box on a counter. Unfortunately, many customers seem to skipping that last step, according to a report by state-run China Daily.
Majority investor Liu Pengfei said that the trust system has left the business strapped for cash. “It doesn’t mean you can eat and drink for free, you just pay what you like,” Liu said. “The box is not transparent, so no one will know how much you paid. If you have the nerve, you can just walk away and pay no money.”
The restaurant’s chef and another investor, Peng Yong, estimates that roughly 20 percent of diners pay nothing for their meals.
Despite being packed every day and having a central location, the investors said that the restaurant has recorded losses of about 250,000 yuan, or roughly $41,000, since it opened.
With rent and other bills setting the restaurant back 60,000 yuan ($9,850) a month, the average daily loss is 2,000 yuan ($328), the investors said.
So why did they even bother with such an uncertain business model in an already-risky industry?
That's simple: Liu says it was to encourage and reintroduce trust and virtue back into people’s lives.
His other restaurant was based on “suspended meals,” a program that operates in some countries that allows people to pay for an extra meal or cup of coffee and hold it for someone in need, trusting that their money will be used appropriately.
“Hearing about it, I was deeply moved, and I felt a heartwarming sense of trust because of it,” Liu said. “Honesty is the first step to building trust. In my eyes, those who don’t pay are sick.”
Though it’s unclear how long Five Loaves and Two Fish will stay afloat, the restaurant has inspired some people. One bank employee said that she takes her 6 year-old son to the restaurant to teach him a valuable lesson: “He will learn to be honest and pay for what he takes, even though no one asks him to.”
Despite the challenges facing Five Loaves and Two Fish, Liu still has a positive outlook. “I want to continue,” he said. “I [still] believe the feeling of trust is contagious.”
Michelle FlorCruz joined IBTimes in October of 2012 and has special interest in stories relating to politics, business and culture in China and other areas of Asia....