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TipHaus helps restaurants to drive employee recruitment and retention by providing them with complete transparency throughout the entire tip collection and distribution cycle. TipHaus

Leif Magnuson and Kirk Grogan, the CEO and COO of TipHaus thought they had made it. They had launched their startup, TipHaus, in 2018 and were adding clients at a steady pace. Their customers loved their product as it simplified the entire process of tip calculation and distribution for restaurant workers. The tipping solution from TipHaus is customized specifically for restaurant owners, managers, and employees. Functioning as a personalized financial tool, TipHaus helps restaurants to drive employee recruitment and retention by providing them with complete transparency throughout the entire tip collection and distribution cycle. Restaurant and shift workers can use the TipHaus platform to gain a better understanding of where their money is coming from and how it is being spent, thus helping them to take control of their financial well-being. Customers loved their product and so did restaurant employees.

The advent of the Covid-19 pandemic almost led to the complete collapse of the restaurant industry. Fear of the virus and stay-at-home orders meant that no one ventured out to dine at restaurants. Tiphaus had only one sale in 2020 and was on the brink of insolvency. The two poured their life savings to the tune of hundreds of thousands of dollars into the venture to keep it afloat. There came a point when they almost gave up.

Slowly, the scenario in the restaurant industry turned to their advantage. More people were vaccinated and stay-at-home orders were lifted. Thanks to social distancing, most customers wanted contactless and digital payment. Cash is no longer king. Digital payment has become the norm rather than the exception. This drove more demand for their product as calculation of the credit fees for tip payments and tracking of payments is a lot easier with the TipHaus digital tipping solution.

In a situation where payment is made digitally, it becomes difficult for employees to walk out of every shift with a correct picture of how much they have earned in tips, how much will go to their paycheck and how much needs to go back into the tip pool to be distributed among other employees based on preset rules. The service industry has the highest quit rates for workers at nearly 6% when compared to 2.7% for the rest of the US economy. The top reasons given by many employees for quitting, is lack of employee engagement and pay transparency. When the payment is done digitally, calculation can become quite complex over a two week or monthly period with multiple shifts and many employees. This is where the technology developed by TipHaus can make the entire process more transparent through automated calculation and distribution of tips. Technology can make tracking of payment histories easier for both restaurants and customers. Having a digital solution that offers a high level of transparency adds to the employees' perception of trust, fairness and job satisfaction. This can play a key role in helping managers attract and retain talent.

The firm's fortunes have certainly changed for the better. In January, TipHaus raised a $1.1 million pre-seed investment round led by SeaChange Fund and expanded its network to cover almost 1000 restaurants. The firm is currently alpha testing its Earned Tip Access digital banking platform and hausmoney digital app to simplify tip sharing and payouts in the service industry.

Said TipHaus founder and CEO Leif Magnuson. "With the advent of the digital economy, it is important to provide service workers with a simple technological solution to have transparency and easy access to the money they have worked so hard for. It has been proven that employees working in a place with a transparent tip policy enjoy 50% higher productivity and 28% longer tenure. From the perspective of the owners and the managers, the average TipHaus customer saves more than 20 managerial hours and $1000 a month. We help restaurants save money as managers no longer have to spend time making manual calculations. Even complex tip out structures are not a challenge for the system. As TipHaus syncs with the POS, restaurants do not have to input tip sharing information or double check. Managers can sign up for the service in less than 5 minutes, sync it with their POS for real time updates and create their unique tip pools and tip sharing logic. They can customize it any way they want and tweak the rules to pay out a greater percentage to the employees who play a key role in serving and retaining customers. There is less room for error and less conflicts, all the information is up to date and you are legally compliant. It is a win-win solution for all of the parties."

About TipHaus

TipHaus is a tailor made solution for automating tip and wage distribution to employees in the service industry. The software is highly customizable, user-friendly and is updated every 15 minutes for equitable and transparent tip sharing and tip pooling. This helps managers to stay legally compliant, save money, reduce scope for error and save the time spent on making manual entries and calculations.

Media Contact:
Name: Kirk Grogan
Email address: kirk@tiphaus.com