My business partners and I opened our NoPa restaurant, Che Fico, in 2018. From the start, we included a 4% surcharge to cover the additional costs we faced under the city’s mandated health care coverage plan, which requires restaurants to contribute to a city fund for employees.
San Francisco, CA
Opinion | Restaurateur: New law aimed at transparency will hit SF restaurants hardest
When Che Fico reopened post-pandemic, we were driven by a mission to rectify long-standing industry injustices that disproportionately favored a select few—primarily servers and bartenders—at the expense of other workers who didn’t receive tips and worked long hours in substandard conditions. We instituted a 10% surcharge, increased pay across the board and introduced new benefits, such as a 401(k) plan with a 4% match and profit sharing.
It was not easy. We had to adjust our shared tip pool several times to ensure everyone was included and that it was fair to our entire staff. We also increased hourly wages to compensate for potential tip losses. This model epitomized free-market capitalism, where ownership collaborated with labor to find common ground and consumers had the choice to support a business that resonated with their values. Our menu was always clear that the charge would be added to the final bill.
Now a new law known as the “junk fee” bill, taking effect July 1, aims to reshape California’s dining industry by banning restaurants from adding surcharges or service fees to their bills. Instead they’d have to raise menu prices, baking the surcharge in.
While this may initially appear to benefit consumers, it will disproportionately harm small businesses—the latest move in a pattern of well-meaning yet detrimental policy decisions targeting the restaurant industry. It also obscures the challenge of operating in San Francisco, where voters and officials have repeatedly approved costly additional mandates that operators elsewhere do not face.
We can all agree that hidden fees are frustrating. Nothing is worse than booking a hotel room at an advertised price, enjoying your stay and upon checkout, finding your bill laden with resort charges, Wi-Fi charges, valet parking and other surprise fees and taxes. I fully understand the frustration. I am a consumer myself. But the vast majority of restaurants don’t operate this way. If they charge surcharges or service fees, they post it on menus and let guests know when they book a reservation.
Transparency is the goal, and this is one way for operators to show customers all the things they are paying for, beyond the cost of food. Guests have thousands of restaurants to choose from, especially in San Francisco. They can simply decide a certain restaurant isn’t worth the fee. And no restaurateur who believes in good service and repeat business wants to leave a bad taste in a customer’s mouth upon dropping the check.
But the new law focuses more on appearances than on the operational realities of managing a restaurant in one of the nation’s most expensive urban environments.
Gavin Newsom enacted San Francisco’s Health Care Security Ordinance during his tenure as San Francisco mayor. As governor, he continues to influence policy in ways that strain local enterprises. The health ordinance has been one of the most damaging things to happen to San Francisco small businesses and can be directly linked to the beginning of the surcharge trend here. One of the most pervasive problems with that legislation is that it punishes businesses for growing and hiring more workers, adding a cost of several dollars per hour per employee for businesses with 20 or more workers. But rather than use his post as governor to propose a smart, statewide reform of the health ordinance, this new junk fee bill will throw out all surcharges regardless of their purpose or how they are communicated to consumers.
Advocates of eliminating service charges argue that doing so protects consumers, but that fails to consider the pressure San Francisco restaurants face—challenges beyond typical market fluctuations. They contend with some of the highest insurance premiums in the country, soaring utility rates from providers like Pacific Gas & Electric and a labor market characterized by escalating wages and staffing shortages. Consider:
Labor costs are rising: San Francisco’s minimum wage rose from $10.74 per hour in 2014 to $18.67 in 2024—a 74% increase approved by voters and the Board of Supervisors. Such spikes put a significant burden on labor-intensive sectors like the restaurant industry.
Inflation is increasing utility bills and the cost of goods: The pandemic further intensified supply chain disruptions, pushing the costs of ingredients up by about 15% in San Francisco. Officials have approved numerous rate increases for PG&E, leading to a 60-77% increase in commercial rates in the last decade, even as PG&E rakes in billions in profits.
Rent and property costs are soaring: The city’s commercial real estate market has also surged, with rents increasing by about a third since 2014. Rent or mortgage payments are the third-highest expense for many restaurants, after labor and cost of goods.
Surcharges have enabled small businesses to manage these rising costs without shocking customers with drastic or frequent price increases and allowed them to convey these external cost pressures. Removing them could lead to a sudden spike in dining costs, further deterring customers and pushing restaurants toward insolvency.
The irony is stark. Policymakers, comfortably dining at San Francisco’s top restaurants, seem oblivious to the adverse effects of their decisions on those serving them. By eliminating the option to communicate cost pressures through surcharges, the law does not support consumers. This will lead to decreased consumer spending, fewer shifts for waitstaff, reduced orders for suppliers and lower tax revenue from a once-thriving industry.
The “junk fee” law misunderstands basic economic principles: Thin operating margins and insufficient profits can lead businesses to close, which affects the entire community—workers, suppliers, service providers and local artisans. In my own restaurants, our surcharge has allowed us to improve pay across the board, offer a 401(k) with a 4% match and create profit-sharing. If Newsom’s intention is to dismantle these programs, then he is certainly being effective.
Hopefully, before the law takes effect, state leaders will have a dose of common sense and will revise the legislation to preserve the rich diversity of San Francisco’s dining scene. Otherwise, they will simply be compounding the issues that began with the initial health ordinance, without acknowledging the benefits workers and restaurant patrons receive surcharges are clearly spelled out.
David Nayfeld is the co-owner of Back Home Hospitality, which includes Che Fico. Find him at @davidnayfeld on X and Instagram.
A Northern California brewery has become the latest victim of declining alcohol consumption after it announced the closure of its taproom in a trendy San Francisco neighborhood.
“We’re sharing that our San Francisco Tasting Room will close Today, Monday, June 29,” a message on Ballast Point Brewing’s Instagram page read about the closure of its location in Mission Bay.
“We’re grateful to everyone who visited, shared a beer, celebrated milestones, and made this location part of the local craft beer community over the years.”
“Thank you for your support and for the memories we’ve made together,” it added.
Started in San Diego’s Home Brew Mart in 1992, the craft beer company has been a favorite of IPA lovers for decades, according to their website.
Known for fan-favorite brews like Fathom, Sculpin and Longfin IPA — the San Diego beer maker rocketed from local favorite to craft brewing giant after opening a flagship brewery and restaurant in the city’s Little Italy neighborhood in 2013.
By 2015, Ballast Point had become one of the country’s top craft breweries by sales volume — and landed a staggering $1 billion buyout from Constellation Brands.
But the brewery’s fortunes quickly went flat.
Just five years later, Constellation unloaded Ballast Point to Chicago-based brewer Kings & Convicts in a deal reportedly worth less than $100 million, according to Food & Wine.
Even as ownership changed hands, Ballast Point continued expanding its footprint, opening restaurants and tasting rooms across California between 2013 and 2023 — including its San Francisco location, which debuted in 2023, the San Francisco Chronicle reported.
Three years later the company announced to fans it was leaving, with no explanation as to why. It also pointed out people could still visit their tasting rooms in “Little Italy, Anaheim, and Long Beach” and find their beers at their favorite “local bars, restaurants, and grocery stores.”
“To everyone who supported our San Francisco Tasting Room over the years, thank you,” the message added.
“Your enthusiasm and loyalty have meant the world to us, and we look forward to raising a glass with you again soon.”
Other craft beer companies and wine makers have experienced similar situations amid declining sales of liquor, beer and wine over the past few years.
Earlier this year, major winemaker Gallo announced the closure of a large production facility and the elimination of nearly 100 jobs across the wine growing region of Napa and Sonoma counties.
The company said there would be staff cuts at Louis M. Martini Winery and the Orin Swift Tasting Room in St. Helena, as well as J Vineyards and Frei Ranch in Healdsburg.
In January, Constellation Brands notified more than 200 people at the Mission Bell Winery in Madera that they would be out of work. And Jean-Charles Boisset Collection closed two Napa Valley tasting rooms.
Last year, two big Northern California brewing company’s — San Francisco’s Fort Point Beer Co and Sonoma County-based HenHouse brewing — merged in order to keep operating.
The number of American adults who say they consume alcohol has fallen to 54%, according to an August 2025 Gallup poll.
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June 27, 1776, was a momentous day for the Bay Area, California, and the world as 240 men, women, and children arrived mostly by foot from Mexico to what is now called San Francisco to set up camp and lay the groundwork for the future.
The “traveling village” is known as the Anza Expedition.
On Saturday, the 250th anniversary of the event was commemorated on Pershing Square at the Presidio of San Francisco in a two-hour ceremony.
The celebration opened with piercing fifes and thundering drums from the Young Patriots Fife & Drum Corps from Pleasanton, as a nod to America’s quincentennial.
But it was then followed up by a Spanish hymn, sung by musicians, dressed in 18th-century Spanish Colonial attire, including the garb of soldado, vaquero, pioneers, military, and indigenous peoples. The song is known as “Alabado” and it was sung by the ancestors as they made their long journey to the Bay.
A proclamation on a scroll was then read with gusto by local actor Dane Andrew, who was portraying the Spanish trailblazer Lt. Colonel Juan Bautista de Anza.
The message was loud and clear: When it comes to history in the Bay Area, Spain swings a big sword.
“People don’t realize in California our early Spanish history. While on the East Coast was becoming a brand-new U.S.A. was a small part. Actually, Spain owned a large part of the West Coast,” remarked Andrew.
The Anza Expedition established the first reliable overland route from Mexico to what was then known as Alta California, claiming San Francisco Bay for the Spanish Crown.
In 1776, the expedition’s leaders established both the Presidio as well as Mission San Francisco de Asis, which is known today as Mission Dolores.
In the crowd, the direct descendants of those who traveled the long, arduous route, including 98-year-old Eddie Grijalva of Vallejo. He was accompanied by his wife Lydia and her son Jeff.
“What an honor to be here and to remember my ancestor,” exclaimed Grijalva.
The event was coordinated by the nonprofit Los Californianos. The nonprofit represents the direct descendants of those who were part of the Anza Expedition. Its documented purpose includes efforts “to preserve the heritage of early Hispanic Californians in Alta California, to conduct research on genealogy, and to provide an accurate and authentic interpretation of Alta California’s history”
Carol Eber represents the group and is the co-chair of the event. She told us the group is thrilled to celebrate its heritage along with the quincentennial of the United States.
“We have a celebration on the East Coast. We wanted to have the 250th celebration on the West Coast as well as recognizing history was made on both coasts,” noted Eber.
During the ceremony, the crowd recited the Pledge of Allegiance and heard from Superintendent David A. Smith, who is with the Golden Gate National Recreation Area.
There were also presentations from the Daughters of the American Revolution and a group called “Our American Patriots”. The keynote speech was delivered by Professor Damian Bacich. He focused on San Francisco’s Spanish-American Legacy.
Also on hand for the festivities, the Consul General of Mexico Marco Mena. Mena told CBS News Bay Area that this was his first visit to Presidio and found it beautiful. He was pleased to be invited.
“The Anza expedition is very related to Mexico, especially to the states of Sonora and Sinaloa,” Mena explained.
As the Presidio ceremony was underway, a mass was said at Mission Dolores. The event concluded with a Roll Call, which was the reading of the names who those who walked on the route in 1776.
Descendants, including Grijalva, placed a flower in a memorial wreath as children were asked to blow bubbles for expedition members named without descendants.
Afterwards, participants went on docent-led tours of the Presidio’s Heritage Gallery and also were invited to tour the site of the Spanish Presidio Chapel.
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