Restaurant Adds Anti-Disparagement Clause Because Its Anti-No Show Clause Wasn't Obnoxious Enough

from the PLEASE-TAKE-YOUR-BUSINESS-ELSEWHERE dept

Grill 225 has done the stupid thing of inserting a quasi-non-disparagement clause into its fine print — something no one will actually see until they make a reservation. (h/t Venkat Balasubramani)

According to an 832-word “dining contract” sent to guests making reservations for five or more people, Grill 225 will exact a $50 per person penalty if the reservation holder cancels all or some of the requested seats within 24 hours of the party’s arrival. No-shows are subject to the same fee.

That’s one part of the stupid. A fairly strict and excessive cancellation policy in an unnecessarily long “dining contract.” Understandably, no-shows and cancellations are a burden on restaurants, but charging large fees (and forcing people to agree to 832 words of fine print) is a great way to ensure fewer reservations and fewer diners. And does anything excite a potential diner more than signing a long “dining contract” before even having the opportunity to sample the food?

But it doesn’t end there. Grill 225 feels some people might get a little testy when asked to shell out $50 per person for cancelling a reservation. So, it has added another mostly-baseless legal threat to its “contract.”

Grill 225’s contract includes an additional clause: “By agreeing to these terms and conditions, the guest(s) and their party agree that they may be held legally liable for generating any potential negative, verbal or written defamation against Grill 225.”

Now, if by “potential defamation” this clause means “defamation,” then the clause is wholly unnecessary because defamation is actually something you can take someone to court for without their signature on a “dining contract.”

So, the only thing left to be “enforced” by this clause would be stuff that isn’t actually defamation, but whatever the restaurant considers “potential” defamation… which would mean things that aren’t legally actionable. But the clause makes it appear as though that sort of thing would also be targeted, especially if the complaint revolves around excessive cancellation fees.

Since this was reported, Grill 225 has walked back its “defamation” policy, saying it was only meant to discourage no-shows and fee-related retaliatory reviews.

It is the intent of the provision in question not to control honest and experience-based opinions, but to prevent false comments made in retaliation for our enforcement of an industry practice, to charge large parties for no-notice no-shows.

And it has apparently removed the clause that served no purpose other than to foster ill will in potential customers.

Much like revisions made in menu details, restaurants often must revisit policies and procedures. We have done so and our policy has been re-written to prevent any misunderstanding. It has never been the intent of Grill 225 to limit our customer’s right to opine about a visit at our restaurant. In fact, we welcome both accolades and concerns. The restaurant business is ever-changing as are the demands of our diners.We learn and react to comments about our restaurant constantly and we greatly appreciate open and honest communication about what we are doing, right and wrong.

This is the way it always should have been, but the insertion of a clause that dangled the threat of litigation over the heads of unhappy diners was completely the wrong way to approach the perceived problem. If the business was so concerned the public would react negatively to its no-show fee, perhaps it should have taken a closer look at that, rather than trying to proactively quell complaints with some dodgy legalese.

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Comments on “Restaurant Adds Anti-Disparagement Clause Because Its Anti-No Show Clause Wasn't Obnoxious Enough”

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48 Comments
Anonymous Coward says:

Legalese

forcing people to agree to 832 words of fine print […] is a great way to ensure fewer reservations and fewer diners.

Do you really think so? It doesn’t seem to have stopped online shopping, social media, etc. Are there any popular online shops that will let me spend a few dollars with less than 832 words of legalese? Even the most trivial shit seems to require a law degree on the internet (although Techdirt isn’t making me agree to anything—that’s nice, but rare).

It seems to me that people will agree to anything, as long as they’re on the internet. If Walmart put a lawyer at the door and made people sign the same agreement as walmart.com before entering (5808 words!), they’d be out of business.

Anonymous Coward says:

Re: Re: First part seems fine

Depends on the type of restaurant and what they charge for food. Some restaurants are multi-million dollar a year restaurants and they have the guests that show up for it. Heck, there are some places that charge $50 for a hamburger. Sure, it’s probably something I would never pay for but there are people willing to pay $50 for a hamburger and if that’s what they want to pay who am I to tell them it’s a waste of their money. It’s their money and they can spend it however they want. If there are enough people willing to spend excessive amounts of money on excessively expensive restaurants to make these restaurants very wealthy I won’t stand in their way. They can spend their money however they want.

Heck, there are hair salons that charge $10 per hair cut and there are ones that charge $80 or more (for guys and probably even more for women). The ones for movie stars charge way way more, probably in the hundreds if not thousands just for all the makeup and whatever it is they do. There are $500 dresses that, when you look at it, you’ll wonder why the heck does such a simple dress cost so much, and I know women who have seen a dress that they like and spent that much on it (oh, they can afford it). While I wouldn’t spend $80 for a haircut who am I to tell anyone else how to spend their money. I know people that have spent $500 a night just to stay in a fancy hotel on vacation. Something I probably wouldn’t do with my money even if I could afford it but, hey, it’s their money and they can spend it however they like.

and if that’s the type of people this restaurant wants to attract that’s their business. Maybe they don’t want to attract the type of people that would be unwilling to pay less than a $50 cancellation per person fee. You have no merit to judge them or to judge the type of people they wish to have in their business.

PRMan (profile) says:

Re: Re: Re: First part seems fine

Especially since $500 a night hotels seem to be so much more annoying than $150 a night hotels.

The $150 a night hotel has free Wifi. But at the $500 a night hotel, I have to go to the front desk, get a code, pay $25 a day, blah, blah, blah. What a hassle!

The $150 a night hotel has a free breakfast buffet. I go through and get whatever I want, as much as I want. At the fancy hotel, I have to wait on wait staff and I eat less because everything I order has additional time and financial costs.

Anonymous Coward says:

Re: Re: Re: First part seems fine

” You have no merit to judge them or to judge the type of people they wish to have in their business.”

Merit? Perhaps the wrong word was used here.
Anyways … Who are you to tell others they have no “merit” to whatever? Here’s a clue, most people do not care what you think and they will continue to laugh at things lie this.

Anonymous Coward says:

Re: Re: Re:2 First part seems fine

“Who are you to tell others they have no “merit” to whatever?”

No, the question I was asking/the point I was making, and the more relevant question/point, is who are you to judge them.

Not saying you have no merit just that you shouldn’t be so judgmental.

“most people do not care what you think and they will continue to laugh at things lie this.”

and who are you to represent ‘most people’.

Anonymous Coward says:

Re: Re: Re: First part seems fine

“You have no merit to judge them or to judge the type of people they wish to have in their business.”

Please explain to me how I have in any way judged the restaurant with this reply? I simply pointed out to someone who wrote of $10 – $15 as a “small fee” that the one actually being charged is $50. For 99% plus of humanity, this is not a “small fee”.

With that over, I also went to the effort of looking up this restaurant’s menu. Most, if not all entrees are under $40. I know of plenty of people (myself usually included) who usually only eat an entree when they dine out, so the “fine” is higher than the meal would be for plenty of diners. I don’t see how this can be considered a “small fee”.

Note that I have not judged the business, only the appropriateness of the word “small” in the OP.

Now, pray, who are you to judge my, or anyone else’s “merit”? Did God appoint you his (or her) heir then off him(or her)self?

Anonymous Coward says:

Re: Re: Re:2 First part seems fine

I agree that $50 is excessive but if their complaint is that they knew about the $50 ahead of time and weren’t happy with it after the fact then I have little sympathy for the customers. If their complaint is that they aren’t making a reservation in the first place because of the $50 cancellation fee then I understand and can agree with their decision. $50 is excessive. Your option is to simply not make a reservation. But if the restaurant has enough customers that are willing to agree to such terms then you or I or anyone has no merit or place to judge them or their customers for it. It’s the free market. Just like I think Apple is overpriced, at least to generally get my recommendation (unless there is a very specific application that no one else can satisfy for some reason), but to each his own.

Anonymous Coward says:

Re: Re: Re:2 First part seems fine

$50 is a lot of money and you (probably reluctantly) only order an entree when you dine out, we get it, you’re a cheapskate.
I would wager that this restaurant does not have you in its target market.

A prime rib-eye is $79 and the cheapest bottle of wine is $70, (mains are $39-$79, entrees $34-$39) and it’s inside a hotel. This is not a place for people who think $50 is a lot of money. An empty table there would be around $740 lost revenue for a table of four.

Anonymous Anonymous Coward says:

Re: First part seems fine

Except these kinds of fees and statements are considered negatives to sales by the NRA (not the gun group) and are strongly discouraged. They are often ignored in markets where the demand for restaurants seats greatly exceeds available seats. The arrogance of such establishments makes the whole industry look bad.

Business is risky, and few more risky than restaurants. Consider that they are not only retailers but that they manufacture what they retail. Anyone starting a restaurant knows this, at some level, and accepts that risk by merely opening their doors and accepting reservations which in the long run are merely a method for controlling available resources. Passing the responsibility for controlling a businesses resources along to the customers seems a bit out of bounds.

I would think accepting standby reservations would possibly be a better way of mitigating the scarce resource situation, but charging because one diner does not show (maybe they got sick, maybe their flight got delayed, whatever) smacks of greed and does not resolve the actual business issue.

Anonymous Coward says:

Re: Re: First part seems fine

“where the demand for restaurants seats greatly exceeds available seats. … Business is risky, and few more risky than restaurants…. Anyone starting a restaurant knows this … the scarce resource situation”

But this is why free market capitalism is the best way to handle this. If the business is so risky that people wanting to start it are going to be discouraged by the fact that they can’t recoup the costs of those that don’t show up and hence may not be profitable few will start a restaurant. This makes restaurants more scarce. The cost will get forwarded to the customers one way or another and if someone reserves a seat and doesn’t show up the only way the restaurant can make up the cost of this is by passing it onto other customers in the form of higher prices. No, why should those that are willing to show up when they reserve a seat be forced to subsidize those who make reservations and don’t show up.

Not having these fees also opens the doors to sabotage where one restaurant can have someone make reservations and cancel just to harm their competitor and increase the demand for itself.

The free market is the best way to resolve this, the government should stay out. So long as the restaurant states, ahead of time, that they charge a reservation cancellation fee I see nothing wrong with it. This will deter people from reserving and cancelling and help restaurants recoup their costs even when cancellations are made. This will help restaurants make a profit which will encourage more restaurants to enter the business which, from an economics perspective, will reduce the scarcity problem. This is an econ 101 issue. The solution to the scarcity problem isn’t to make things even more difficult to restaurants by discouraging them from charging for reservations it’s to make things easier on them. and if you don’t get that then you should taken en econ class. Quantity supply is directly related to price/profits and being able to recoup your costs when people cancel and deter cancellations means more money which means a higher quantity supplied. More money for restaurants (as an industry) = more quantity supplied.

Anonymous Coward says:

Re: Re: First part seems fine

“Passing the responsibility for controlling a businesses resources along to the customers seems a bit out of bounds.”

Every business has to, in some way, pass on the costs of their resources to the customer in one way or another. In this situation the business is simply passing on the costs to those responsible for creating them instead of to good paying customers that didn’t do anything wrong.

“but charging because one diner does not show (maybe they got sick, maybe their flight got delayed, whatever) smacks of greed and does not resolve the actual business issue.”

No, not showing up and then expecting the restaurant to pass on their costs onto other customers that do show up smacks of greed. There is nothing wrong with the restaurant requiring people to take responsibility for their own problems instead of passing them onto someone else (like the restaurant who will pass them onto other customers). Just because your flight got delayed or whatever isn’t the restaurant’s problem and it’s not the problem of other customers that were being denied a reservation ahead of time because you reserved and those that will be charged extra just because you refused to show up. It’s your personal problem, you should bear the cost.

and there are restaurants that accept standby reservations but there is also a market for those that wish to reserve ahead of time. Why destroy that market (and the consumer utility associated with it) just because you think that all restaurants should only do standby reservations. Heck, there are hair salons that take appointments. Some people have a schedule to maintain or would like to plan their itinerary ahead of time and the market for that shouldn’t be hindered by those that want to make reservations and not show up.

Anonymous Coward says:

Re: First part seems fine

A small reservation deposit isn’t crazy, but do restaurants actually lose much money from missed reservations? (Enough to justify the inconvenience of taking credit card details?) With mobile phones being so common now, the restaurant could simply make a phone call to find out whether someone’s still on their way. And if not, give the table to someone waiting: a popular restaurant will usually have a line. I’m sure there’s a cost but it must be outweighed by the benefit if they’re accepting reservations at all.

Anonymous Coward says:

While some may argue that charging a cancellation fee is bad business I don’t think it’s illegal so long as it’s stated early on.

Of course going after those that post bad reviews because of that is something that is (or at least should be) illegal. People have free speech. But I would agree that those who send bad reviews because of that shouldn’t really be taken that seriously and the solution the restaurant should have is to counter this bad speech with more speech. The restaurant should counter criticisms by stating that the people who reserved the spaces were informed, ahead of time, that there is a cancellation fee. And perhaps the restaurant doesn’t mind deterring business from people who are likely to later cancel and wants to ensure that those that do reserve actually show up. It really depends on the restaurant’s target audience. Just because Techdirt thinks the restaurant should try to target the types of people who would cancel and be unwilling to pay a fee doesn’t mean that’s who the restaurant wants to target. It’s their business, they can run it how they like and everyone has their own preferences on how they wish to run a business. There are other restaurants and I’m sure this restaurant realizes that they may lose customers because of their policy but they have chosen that this is how they wish to run their business and other restaurants can run it differently.

What the restaurant could do differently (and perhaps they already do this, not sure) is perhaps charge for reservations ahead of time. In a senses then this is the cost of a reservation whether you show up or not. This will reduce the expensive cost of having to go after someone who doesn’t show up and doesn’t want to pay after the fact.

and I really don’t see it as bad business. Heck, Costco charges for membership if you just want to show up. Many businesses require a deposit of half the cost of the work before they start any work lest customers order something and, later, change their mind after the work is done. It’s often standard business. The restaurant has costs, they have to hire employees to prepare for their expected guests and buy the required amount of food and drinks ahead of time to make sure it’s available for their expected guests. Food rots and is perishable, scheduled employees get paid regardless of whether or not the guests show up. Plus there is opportunity cost, the guests not showing up takes up space for other guests that could have reserved ahead of time. I really don’t see why Techdirt is making such a big deal out of the $50 cancellation fee, if you don’t like it you can go to another restaurant and you’re probably not the type of customer they want anyways even if they lose you.

John Fenderson (profile) says:

Re: Re:

“if you don’t like it you can go to another restaurant and you’re probably not the type of customer they want anyways even if they lose you.”

What kind of customer is it they don’t want? Paying customers? Customers unwilling to bend over?

Although I have never been a no-show to a restaurant, if I became aware that a restaurant had such a policy I would certainly never eat there. Those are restaurants who hold their customers in some degree of contempt.

Anonymous Coward says:

Re: Re: Re: Re:

Customers that make reservations and don’t show up aren’t ‘paying’ customers.

For that one reservation, yes. For every future meal that the customer may now elect (not) to eat at that restaurant, no. If no-shows are such a problem, the restaurant could change its policies to mitigate the damage. For example:

– Keep a list of recent no-shows and refuse them advance reservations until they have at least N walk-in visits. Depending on how much a no-show hurts the restaurant, they could let the customer have M missed reservations before the penalty applies. A recurring customer who misses one reservation can “work off” the penalty without spending any extra money beyond the later meals they would have eaten anyway.
– Institute a policy that reservations expire after N minutes, so if you are late by more than that, it is implicitly cancelled. You can still get service if you are late, but you are now back in the walk-in queue.
– Make the reservation good for a table, but require the patrons to order when they are seated. This avoids preparing food that may go uneaten if the patron does not show.

Anonymous Coward says:

Re: Re: Re:2 Re:

If a restaurant wishes to manage all of that they can do that as well. I see nothing wrong with that. If you think it’s that easy to implement and you think you can really do better and run a successful restaurant then go ahead, open a restaurant and do that. But all of this is costly (employee time which is money) and those costs will be passed onto customers.

But if a restaurant wishes to simply charge a reservation fee, which is a much more practical solution and attributes costs to those that create it when they create it, then that’s their choice as well.

and believe me, if a restaurant has a very loyal group of regular customers that show up and make them a lot of long term money they will, in all likelihood, give those people a pass if, on one occasion, they don’t show up for whatever reason. Most (at least relatively small) businesses do treat regular customers differently (better) than ones they never met. Though one often finds the opposite true for big businesses (ie: cable companies having promotions for new customers that don’t apply to regular customers, ones that have promotions for first time customers that don’t apply to long term customers. Maybe long term customers are more used to this type of treatment here in the U.S., I hear in other countries people treat long term customers better than new customers). But for a first time customer that is a lot less likely to ever show up the restaurant is less likely to be so generous and I don’t necessarily blame them. They view it as a statistic, a first time customer is less likely to be a long term customer than an existing long term customer and so they will naturally treat existing long term customers better.

John Fenderson (profile) says:

Re: Re: Re:3 Re:

” if a restaurant has a very loyal group of regular customers that show up and make them a lot of long term money they will, in all likelihood, give those people a pass if, on one occasion, they don’t show up for whatever reason.”

Perhaps, but that’s not the sort of thing that can be relied on and so doesn’t mean a thing.

Anonymous Coward says:

Re: Re: Re:4 Re:

Hey, I think Apple products are overpriced garbage but, apparently, there are enough people willing to pay a premium for it to make Apple a very successful company. Hey, who am I to judge them or to judge Apple. Apple must be doing something right. My purchasing decisions aren’t going to, single handedly, change the market and if I really think I can do better than Apple and make a more successful company no one is stopping me (well, except for the possibility of a bunch of nonsense patents and, to the extent that Apple abuses our legal system to hinder competitors from entering the market I will criticize them and I have every right and reason to). I’m a free market capitalist, I don’t have a problem with different restaurants and companies catering to different markets. If one business practice really sucks enough to upset customers then the free market will naturally correct it. If this restaurant is successful with their existing policies, so long as they are clear ahead of time to the customer about the reservation cancellation fee, then they found a market of people they can serve. If their policies are a problem to enough people then the free market will naturally correct them.

What I do have a problem with, though, is businesses that use government to hinder competition. I also have a problem with people complaining that restaurants are too scarce because it’s so costly and risky to open a restaurant yet they want to implement policies, laws, and/or customs that limit the options of restaurant owners to find ways to make a profit so that they can continue to serve the market instead of going out of business (creasing more scarcity) and so that more restaurants can open and better reduce the scarcity issue. Because, surely, the best way to eliminate the scarcity issue is to make it even more difficult for restaurants to operate.

John Fenderson (profile) says:

Re: Re: Re:5 Re:

“who am I to judge them or to judge Apple”

You are a potential customer. It is your responsibility to judge them (and every other business) to determine if you want to do business with them.

All I’m saying is that I judge restaurants who have policies like this very harshly and refuse to do business with them. This is not only my right, but my responsibility.

Note that I am NOT saying that they should be forced to stop doing business that way. I’m saying that I refuse to be their customer if they do.

How successful their business model is doesn’t enter into any of this.

Anonymous Coward says:

Re: Re: Re:2 Re:

“For that one reservation, yes. For every future meal that the customer may now elect (not) to eat at that restaurant, no.”

If the customer knew ahead of time the terms and they had a temper tantrum about it when they decided not to show up and had to pay the fee then that’s probably not the type of customer they want anyways. A temperamental customer that agrees to one thing and later decides they don’t like those terms could be the type of customer the restaurant doesn’t want. The customer, in the future, should make sure that if they make a reservation they will show up. and a customer that doesn’t like those terms could find another restaurant, perhaps this restaurant doesn’t want them anyways.

There are gyms that you can walk in and pay for the day and there are gyms that encourage you to pay a monthly fee to attend. There is a market for both and you can choose which one you like.

Likewise there are restaurants that take reservations and ones that don’t and there is a market for those who are willing to pay a cancellation fee if they reserve and cancel. and this restaurant caters to that market. Others may cater to other markets. OK, so you, specifically, aren’t in that market but you are only one person and there are other restaurants that will likely better cater to your market. To each his own and I really don’t see one as being better than another just serving different markets. You are in one market and are not the target audience of a restaurant like this. Just like a store that sells surf boards and you don’t surf. So you think they should sell computers instead. OK, big deal, that store is not for you. I don’t see it as a problem and don’t think it’s something to obsess about. Different businesses cater to different markets.

John Fenderson (profile) says:

Re: Re: Re: Re:

“Customers that make reservations and don’t show up aren’t ‘paying’ customers”

My point is that I am a paying customer who keeps reservations. And I object to these policies and won’t go to restaurants that have them.

Yet you said that restaurants don’t want my business anyway, so I’m wondering what it is they don’t want.

Anonymous Coward says:

Re: Re: Re:2 Re:

I didn’t say that restaurants don’t want your business I said that perhaps this specific restaurant can afford to lose your business to make up for all of the people that make reservations and do cancel (or that would make reservations and cancel had it not been for the cancellation fee). You can find a restaurant that serves your specific market better.

That’s partly why different restaurants serve different markets. If every restaurant served the same exact market it would saturate that market. Serving slightly different markets enables different restaurants to extract a profit from different audiences.

Anonymous Coward says:

Re: Re:

I don’t think the issue is really a $50 cancellation fee. It’s that the cancellation fee is hidden in an 800+ word “contract”. Charging a $50 up-front reservation fee, refundable against you meal, would be a more honest approach and I doubt that would meet too much flack from Techdirt. It would also probably be commercial suicide for most restaurants, likely including this one, if it is the Grill 225 in Charleston, where it wouldn’t be hard to eat for less than $50, if you only ate an entree.

Docrailgun says:

Paying for reservations ahead of time

Some restaurants take care of this situation (of no-shows) by selling “tickets”.

http://www.wsj.com/articles/ticket-to-dine-the-restaurant-reservation-revolution-1401463548

http://www.npr.org/sections/thesalt/2014/08/05/337834577/no-more-reservations-exclusive-restaurants-require-tickets-instead

As for the Anonymous poster saying they don’t think charging a fee for disparaging a restaurant is illegal – so what if it’s not? It’s still wrong.

Anonymous Coward says:

Re: It's true...

Where I’m at there is a restaurant with terrible food they have no prices listed on the menu so people order and then get hit with BIG bills ($8 for water) (tap water) they don’t get repeat business but the high prices keep them afloat. On that rating site they are a train-wreck even though they AstroTurf it.

That Anonymous Coward (profile) says:

If only they had spent money on creating an app instead of paying an idiot lawyer.

Imagine a ‘waiting list’ app that when there is a cancellation or they don’t fill all the reserved seats that they update the list and it notifies the next people on the wait list who can fill that slot. Give them 5 minutes to confirm they want the spot and boom seats filled. Heck someone could create a centralized reservation app that bunches of places could sign up for. I need 2 for italian food, and if there was a cancellation for 2 boom the seats get filled. Its like there is an entire business model waiting to happen here, but archaic pen & paper and threats of fees make way more sense then getting the butts in seats.

But I guess it makes more sense to destroy the brand by using stupid legal terms that will drive people elsewhere. One does wonder if the $50 went to the waitstaff or to the bosses… betcha you know where it went.

Anonymous Coward says:

I had a dentist appointment today....

This afternoon, however, I woke up with a horrible head cold. As I was sitting there debating if I wanted to stay home today, the dentist office calls.

The lady asks me if I would be able to reschedule for this morning, as they didn’t realize they had afternoon booked.

I told her I had a head cold anyway, and could we just make it for 2 weeks out.

After we get the date and time settled, her tone turns to that of a ticked off mom and she says “If you cancel and reschedule again, we will have to ask for payment up front!”

I was like, “Uh…..ok”.

Then she gets all quizzical in her voice, like she didn’t understand my confusion as she says, “Thanks for calling, have a great day”.

I don’t think she realized that she was the one that called me first.

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