Raising the Wage at Boloco

December 24, 2015


Dear Team Boloco,

Hang on tight… this is a long one. For those of you who get through it all, thank you. If you know you can’t, just watch this video instead… click here or on any of the pictures that follow. Maybe you’ll choose to return here later. Today is a special day for me. Yes, it’s Christmas Eve. And I am surrounded by my beautiful family all anticipating the quiet arrival of Santa Claus later tonight. I am a lucky man for this alone, and hope that all of you, too, find yourselves surrounded by loving and caring friends and family. It’s also a special day for me related to Boloco. I get to do something that for years I’ve been told I can’t do, shouldn’t do, am not allowed to do, and frankly would be stupid to do. With the help of my trusted Veeps and about 75 of you who participated in our Leadership Retreats over the past two months, we are today betting the future of the company by making a massive investment in the lives and futures of our people. Long ago I believed that taking the very best care of the people who work at a company is not only the right thing to do but the best way to succeed. I didn’ t always feel I had the power or experience to do exactly what I thought was best… but today I do. And if all goes as I hope it will, this is just the beginning. Most of you (98%) who earn an hourly wage noticed earlier today when you opened your paychecks that the rumors of a wage increase at Boloco have become reality. This is obviously a big part of this investment… here are the details: MINIMUM WAGE AT BOLOCO INCREASES TO $11/HOUR In year’s past, we have increased the lowest wage permitted at Boloco well ahead of minimum wage:

Year : Boloco Minimum Wage
2002 $8.00
2011 $9.00
2013 $9.50
2014 $10.00
NOW $11.00
2016 ?

And we are doing that as well today. Effective immediately, no full-time or adult team member may be paid less than $11.00 per hour. So anyone currently employed with Boloco who was making less than $11.00 per hour automatically received an increase to at least $11.00 per hour effective December 7, 2015 ago (reflected in today’s paycheck). 64 of you fall into this category. A few of you were selected to move higher than $11.00 and your General Manger will share the reasons why when you next sit down to discuss performance. AVERAGE INCREASE ACROSS ALL WAGE LEVELS IS $1.04 PER HOUR Today is different than in years past because instead of just raising the lowest wage, we raised nearly everyone’s wage (268 out of 272 hourly team members). While a handful of team members who are working through performance issues or who recently received significant raises did not get an increase, the average increase was $1.04 per hour. Wages at Boloco now range between $11 per hour and $19 per hour. The average wage at Boloco, not including the positive effects of Earned Overtime Pay, is now $12.85. If you were to include the impact of Earned Overtime, the average wage paid per hour is higher than $13.25 per hour. How long you have been with Boloco matters too… we take care of those who stick with us, learn new skills, treat our guests amazingly well, and treat each other and your restaurants with care and respect.

Take a look:

Tenure Avg Wage
5 years+ $15.60
4 years $14.45
3 years $14.33
2 years $13.44
1 year $13.03

Perhaps most significantly, for the first time in our company history, we are at or above what is called “Livable Wage” standards in all of the States in which we do business… Massachusetts, Rhode Island, New Hampshire and Vermont. We haven’t done the full research on this, but its highly possible that we may be one of less than a handful of restaurant companies our size or larger in the United States achieving these levels (I have yet to find one). And by the way, it’s not because we are doing better than they are. Quite the opposite in many cases – most of you know how close Boloco came to failure a few short months ago. I purchased the business back from our investors in order to avoid that unthinkable outcome. So, no, it’s not because we have the money that we are doing this. Instead, it’s because we are actually putting “People before Profits”, not because we don’t believe in Profits, but because we believe that taking care of the right People will lead to the right level of Profits. Your dedication will lead to better customer experiences, better employee experiences, and a much better, more beautiful, and far more profitable business. And in all honesty, that’s the gist of the bet… if those things don’t happen, then this will be a very bad investment leading the doubters and skeptics to laugh as they say “I told you so!” I hope you will help prove them wrong and all of us right!! “THE GOOD JOBS STRATEGY” FOR 2016 Many of you read and participated in discussions about the book called The Good Jobs Strategy. In 2016, Boloco will use these strategies to help us achieve all of our goals and to help us earn the pay increases we’ve just given. You will hear a lot about the following in the coming months:

Offer Less/Do Less:

No, this isn’t a joke. We will be working to aggressively simplify all aspects of our business… including menu items in the restaurant, ingredients offered, paperwork, administrative BS, and generally removing all things that we do that are deemed a waste of time. Be part of this… when you find yourself doing things that don’t make sense, speak up. This will help all of us earn the wage increases we have just received. Standardize and Empower: There are a lot of repetitive things we do every day that don’t require a lot of thought, but because we don’t use the tools available to us, we use all of our strength just to accomplish the very basics. As entrepreneurs, we need to be smart about knowing when to follow the systems and procedures without question so that we have room in our brains and the physical energy to do the harder things that only humans cando… like dazzle our customers every hour of every day, treat each other with respect and kindness even when we don’t feel like it, take the time to care about the little things even when we are tired, etc. We have to respect the systems so we have room to actually take advantage of the fact that we are empowered to be the best version of ourselves while working at Boloco! Create Slack: You know what slack is? It’s a little extra room. In our case, its not being so uptight about managing labor minute to minute and instead staffing our shifts so that there is room to perform at our very best, so that someone can always be out in the dining room taking extra great care of our guests, so that the restaurants stay clean, so that stress is less. Slack is our friend. Slack is how we will have the ability to never let our guests down. (Not to be confused with the software Slack which many of us use these days to communicate… so much better than email… download it and join team Boloco or ask your GM about it!) Cross Train: At Boloco, this is kind of like DUH. We do this naturally. But that’s kind of the problem. In 2016, we need to intentionally train ourselves to be experts at all positions. For the last many years we have just thrown people into the fire (“you’ll figure it out… that’s what I did!!”). That doesn’t work. It causes so many mistakes and general chaos and confusion. It leads to tension and stress. 2016 will be all about training, cross-training, and skills development. And yes, that includes English classes again for our friends who don’t speak English as a first language!


A long-standing objective dating back to 2005 was that all team members should become experts in food safety. Not just for the company’s sake but also as a benefit to team members looking to learn new skills and become more valuable to Boloco or future employers. By becoming what is called Serv Safe Certified, employess would also have a better chance of earning a higher income. With what has recently happened at Chipotle related to food borne illnesses, our timing here is perfect on many levels. Yesterday, as an example, a group of 14 Boloco team members received their Serv Safe Certification making them experts in the critical area of food safety. The total number of you certified right now hovers around 50, an adequate number to meet the health guidelines mandated by the various health departments in New England. But that’s not good enough. By June 30, 2016, our goal is to invest in ensuring that 90% of you who hired in 2014 or before also receive your ServSafe Certification. It’s a hefty investment, but you will all benefit from it, as will our guests. By 2017, our goal will be to ensure anyone who works with Boloco is ServSafe Certified within 6 months of joining. Chipotle has made big pronouncements about becoming the safest restaurant company in the country without sharing any details… without it being our actual goal, what we are committing to here will actually put us in that top spot, while giving each of you a new skill that will translate into more income down the road at Boloco or elsewhere.


ee app the employee appIn January, we will begin requiring that each team member take part in providing frequent feedback on the Company itself, management, and each other. It will be via a mobile app (both iPhone and Android now available) that I have been working on for over a year. For most of you this will be a welcome change… your voice will, anonymously if you choose, be heard and will make a difference in how the company evolves and improves. There is an anonymous chat room where you can share concerns, frustrations, jokes, questions, etc. For others this may be uncomfortable and we will work through that. Part of personal growth and taking on more responsibility means being able to give, and receive, constructive feedback. Sometimes it will feel terrific, sometimes not so much. For those of you who excel at the things that matter most – delighting and dazzling our guests, treating each other with respect, ensuring a delicious and consistent product, keeping the restaurants sparkling clean, being there when you say you will be there – this new performance review system will be your best friend. It will be used to help determine raises going forward. It will also try to helpcreate a resume of your strengths that you can share outside of the Boloco world, something that again will hopefully be helpful in finding new ways to move forward in your career and earn more income.


Today we pay exactly 9 different hourly wages – $11, $12, $13, $14, $15, $16, $17, $18 and $19 per hour. Nothing in between – no pennies, dimes or quarters. Just whole dollars. When you are up for a raise, you will only be considered for a full $1 raise or more. No more 25 cents here, 30 cents there, 75 cents because I like you, etc. Raises of $1 or more require a new level of communication between you and your manager – an ongoing relationship and dialog that is constantly focused on your personal and professional development, honest feedback, and consistent follow-up. Things like rudeness to each other, rudeness to guests, failing to follow basic procedures in the operations of the restaurants, will be quick ways to disqualify yourself from having the potential for a raise. Raises will not automatically be given each year. You will each have to earn them… over and over again each day. All of that said, our goal is to build a business that can be suitably profitable while also paying the most in the fast casual restaurant industry. Yes, we want to pay the most. But it’s not a give away… we all have to earn it.


No, sadly we have to report that Transportation Discounts are disappearing starting in January. They amounted to less than 12 cents per hour at the most, so hopefully you’ll forgive us because the other raises are nearly 9 times higher on average than this loss. Also, for those of you in the 401K program, we almost scrapped it entirely but ended up keeping it at a 2% match versus 4% previously. Less than 20 of us are affected, and all of you know about it already, so hopefully this is still viewed as a significant benefit to those who choose to take advantage. Some of you wondered about the Holiday Party. We decided to do this instead of that. We couldn’t do it all. We chose this. Maybe next year we can do both? That’s it for the bad news. Not that bad.


Oh wow… you are all still here! Congratulations on caring enough to read everything I wrote. There’s more believe it or not. But I have to get off the computer and head downstairs to start celebrating Christmas! Another time. Six months ago I took the leap of my life and bought Boloco back on the brink of failure with the intention of reviving our culture, our purpose and our profits. It’s not been an easy year, but we have made so much progress. 2016 is going to be a year where I will look to each of you to be my partner. We are all entrepreneurs… we all matter. You do make a difference. If you care enough to notice the little things, your customers will notice, they will come back, and the company will do better. And finally, the company can take better care of all of us who work here. I wake up inspired nearly every morning. I think about the possibilities in front of us and I find myself restless with excitement. I can’t do it alone. I need each of you. And you need each other. Let’s surround ourselves with amazing people in 2016… let’s settle for nothing less. Let’s kick some a$#. Let’s have fun. Let’s smile a lot. Let’s get paid for our hard work. And let’s celebrate. If you want a little more and haven’t seen it yet, watch the video that Matt, Erik and I put together… Erin was the videographer. Just click the cartoon figure of me below…

Happy Holidays!!

John Pepper CEO & Co-Founder

John Pepper Cartoon Caricature





PS. Watch Matt, Erik and I try to share this message in person… #FAIL