A D.C. restaurant group's million-dollar bet

Knead Hospitality + Design is testing a modified four-day workweek and offering benefits that pay employees to have fun.

Jason Berry and Michael Reginbogin, Knead Hospitality + Design co-founders

What if restaurants chased scale at all costs like tech companies? 

Trick question! They can’t. Restaurants thrive on warm and fuzzy intangibles, like experiences and relationships. In the best cases, restaurants have lots happy people on both sides of the table, employees and customers — and everyone willfully comes along when it’s time to scale.

That’s how one fast-growing restaurant group sees it. Jason Berry and partner Michael Reginbogin started Knead Hospitality + Design, the parent company of several restaurants, bakeries, and fast casual concepts in and around Washington, D.C., in 2015. Their portfolio includes two locations of chef Edward Lee’s Succotash, a Mexican restaurant called Mi Vida in partnership with culinary director Roberto Santibañez, and two locations of Umber Ahmad’s Mah Ze Dahr bakery, which started in New York. Over the last two years, Knead opened 11 new concepts and more than doubled employee headcount — it’s now approaching 1,000. They expect to open their 20th restaurant later this year. 

That kind of growth requires intention, and, in this case, some creative policies.

“We’re huge believers in a concept called institutional knowledge,” or the sort of intangible skills and information longtime employees learn from experience, Berry told me in a recent interview. Obviously, retaining employees means lower recruiting and training costs. It also leads to better working relationships and elevates the guest experience, too. 

To do it, Knead instituted two separate programs for salaried employees. The first, dubbed “four days at work,” lets salaried employees like managers work four 11-hour days in the restaurant. They can finish any remaining office work — emails, inventory, scheduling — from home or anywhere else. The other is a set of specific benefits that reimburse employees for things like gym memberships, haircuts, clothes, even movies and dining out. 

Berry said the programs are designed to be proactive toward employee retention, not reactively coping with high turnover. They’re also expensive; the cost can quickly become a seven-figure expense for a company of Knead’s size. Plus, the results are nearly impossible to measure, leaving Berry, Reginbogin and team relying on instinct informed by decades of industry experience. Berry talked me through the details of these programs and how they’re faring. (Read to the end for some solid advice for keeping investors happy.)

Our conversation has been lightly edited for length and clarity.