Purpose – This study aims to examine the role that psychological empowerment (PE) and employee satisfaction (ES) play in the relationship between leader empowering behaviors (LEB) and customer satisfaction (CS) and employees’ organizational commitment (OC). Design/methodology/approach – Data were collected from 365 frontline employees and 2,915 customers at 40 units of a chain restaurant in the USA. Findings – Structural equation modeling (SEM) results indicated that LEB influences PE, and PE in turn influences employee satisfaction, which consequently results in higher employees’ OC levels and higher customer satisfaction. Originality/value – Although recent hospitality research recognizes the importance of employee empowerment and leadership, few studies have focused on leader empowering behaviors and its influence on organizational outcomes. Moreover, potential mediating processes have not received research attention. Addressing this, the current study tests a conceptual model that shows how leader empowering behaviors ultimately lead to customer satisfaction through employee psychological empowerment and job satisfaction. Although, some of these relationships have been studied separately in different contexts, the current work shows the complete process of how leadership is linked to organizational outcomes, which has not been previously studied.