Emerging from the pandemic, San Francisco restaurant Che Fico took a controversial approach to realigning the economics of dining, adding a pre-tip 10% surcharge to all checks in order to address the "true cost" of running a restaurant and paying people equitably.

Two years later, as of last week, Che Fico announced that the 10% "dining in" charge is no more. But, in its place, the restaurant will revert to charging a 5% "SF mandates" surcharge, similar to many other restaurants around town.

It's just a 5% net discount in what are already pretty pricey final bills — and follows a 15 to 20% hike in menu prices when they reopened in late 2021, and those prices have likely risen a bit since then. But it sounds like owners David Nayfeld and Matt Brewer have heard enough complaints that it was time to do something.

"Over the past two years, we have made significant strides toward recovery despite the ongoing challenges of doing business in San Francisco," Nayfeld and Brewer write in a letter to customers. "However, our approach may have alienated some of our devoted diners. Please know that the proceeds [from the surcharge] were used judiciously, supporting initiatives like a 401k with a 4% match in which we contributed over $300k to our employees' retirement funds. We have distributed more than $100k to employees through our profit-sharing program."

They note that the restaurant has also raised the "floor" of hourly wages across the restaurant by 25% — back in 2022, they said that kitchen staff were making between $60K and $72K per year under the new model. And, Nayfeld and Brewer add, "As owners and operators, we have not profited from these measures, maintaining our pre-pandemic salaries."

As for the 5% "SF Business Mandates" charge that will now appear on checks, they say, "Such charges are vital for restaurant survival in an increasingly challenging business environment."

The 10% charge was billed as optional when it was first announced — it would appear on checks, but if customers questioned it or asked that it be removed, the restaurant would oblige.

This surcharge was highlighted in the summer of 2022 alongside the new business model at Good Good Culture Club, where lucrative tips for servers were jettisoned in favor of a blanket 20% service charge that is shared between front- and back-of-house staff, with everyone making hourly wages as well.

The Chronicle covered both restaurants' new business models at the time, which were similar to what was already instituted in 2021 at Zuni Cafe. Those changes prompted an exodus of experienced servers from Zuni who didn't want to see their earnings go down, and that has reportedly impacted the quality of service at the restaurant, and perhaps staff turnover.

New Chronicle critic MacKenzie Chung Fegan suggested as much in her inaugural review of Zuni for the paper last week. But, Fegan writes, "if the trade-off for [losing] that level of hospitality is that cooks and dishwashers are able to save for retirement, that’s a no-brainer for me."

The change at Che Fico comes as the restaurant prepares to open a third outpost in SF, down at the Chase Center. Che Fico Pizzeria is scheduled to open pretty soon, with "early spring" still being the timeframe on the Chase Center website.

Che Fico already has its more casual downstairs operation on Divisadero, Che Fico Alimentari, and Che Fico Parco Menlo just opened late last year in Menlo Park's Springline complex. That Peninsula location also has a new all-day market attached to it that just opened last week, called Il Mercato di Che Fico.

As we learned last month, the Che Fico team is also slated to open a big new restaurant in the Mission Rock development sometime next year, with details still TBA.

Previously: Two Buzzy SF Restaurants Are Trying Out New Models For Compensating Workers — And Checks Are Going Up In Price