I don't buy this old argument at all anymore. If customers are smart enough to figure out a 20% tip they're smart enough to figure out that your "tips included

I don't buy this old argument at all anymore. If customers are smart enough to figure out a 20% tip they're smart enough to figure out that your "tips included" pricing is still competitive compared to the place across the street. Sure there is some marketing benefit to a lower number but regulars will make or break a solid business and they talk, a lot. So no, I dont think staying competitive is an argument for anything other than lacking the balls to put a sign up and fix your pricing. On top of that the net benefits from paying your staff a livable dependable wage, and advertising the fact you don't have to subsidize free loaders will likely outweigh any negative effects for all but the scummiest joints relying on one time customers.