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Franchise Law Update Commentary on Business and Legal Issues of Franchising

Restaurant Franchise Systems Should Consider Implementing Table-Side Charging

Posted in Business Updates

The recent and much publicized arrest of waiters from high-end steakhouses for stealing or “skimming” credit card numbers from restaurant customers should have franchisors evaluating new risk management measures. 

Employees at such well known eateries as Smith & Wollensky, the Capital Grille, Wolfgang Steak, and Morton’s are accused of using handheld scanners to copy credit card information of customers with high-limit cards. The information was then allegedly passed to leaders of a 28 person identity theft ring. 

 

One preventative measure that sit-down restaurant franchise systems should consider implementing is the “table side charge method.” In lieu of letting employees disappear with a customer’s credit card, waiters bring an electronic device to each table whenever a customer is ready to pay for the check. The credit card never leaves the view of the customer.  

 

An option in more casual sit-down dining franchise systems is to provide a pay at table touchscreen system for use by customers.  Certain franchisees of Chili’s have adopted the table-side pay devices and other franchise systems such as California Pizza Kitchen have rolled out table side pay screens in certain markets.  Legal Sea Foods Restaurants was one of the first franchise systems to implement pay at table technology. 

 

While certainly an undertaking for any franchise system, instituting a table side charge method would vastly reduce the likelihood of data theft and fraud.