I have friends in the restaurant industry and they need lots of help during this crisis. Was wondering if anyone was interesting in finding solutions to help them out since they are limited to takeout and delivery. Takeout helps but many businesses are experiencing a drop in revenue when compared to before the crisis. Delivery app take a huge cut (up to 30%) of revenue and eats up on their already thin margins.
The 20% fee stood out since delivery charges up to 10% more with delivery. Many restaurants in Toronto are currently offering meal kits at the moment and marketed on their social media / website. If ordered online, some services and POS platforms charge only 3% which covered the credit card fees. So in order for restaurants to buy-in, it needs to be value added services that would help increase revenue beyond what they are capable of doing on their own using their recipes. Obviously, the transition from cooking to meal kit will have a learning curve for packaging and including instructions. Some have been innovative and created their own video on how to cook their dishes.
There is a comparison between the delivery companies, such as UberEats, Postmates and Doordash. If this market is already in pure competion, then the price already reflected the average total cost in long run.
As restaurant owner, there shall be opportunity to save money on space and rental.
Thanks Ashif for the reply. In Canada, there are talks to help retail and restaurants with rent where the government will guarantee forgivable loans to landlords who reduce or waive rent. My fear is that the big real estate companies will take advantage of these loans. There are individuals (i.e. doctors, professionals, investment groups) who own commercial property as well but mainly small plazas. I have talk to a few and takeout can only go so far when some restaurants are geared toward dine-in where people tend to order more during their stay (i.e. drinks, desserts). Takeout has it's problems where most use the big food delivery apps (i.e. UberEats, Foodora, DoorDash) which currently charge up to 30% to the restaurant plus additional fees to the consumer. I know some have resorted to delivery themselves as long as the order is above a certain amount but they would be counting on multiple orders delivered in the same area at similar times.
I had the idea to partner with local restaurants to tap into the multi-billion dollar fresh food kit industry (and am looking for co-founders). My start-up is called BunkerChef ( ). BunkerChef partners with local restaurants to offer curbside meal kits of customer’s favorite meals and also assist consumers with food prep suited to self-isolation.
Not only would this service help local restaurants stay afloat (in an industry where 5-7 million Americans are threatened with job loss, according to Business Insider), but it would help increase food security as the global pandemic threatens to disrupt supply chains. The plan is to start small for proof-of-concept, but this model could potentially scale nationally. A percentage of profits would fund food banks and personal protective equipment for delivery workers and restaurant employees. Ping me with your thoughts and ideas!
How about having their own food ordering app? This way you are not under the mercy of food aggregators who anyways place the restaurant down in the search results unless you spend money on advertising or in the top 1%. Don't consider this as a sales pitch but we are actually building a mobile friendly site (since customer didn't want to spend budget in ios/android app) to a restaurant in malaysia. Would be happy to connect if your friends think this would help
Thanks for the answer Ray. Many restaurant owners are not able to cover their fixed costs with just offering takeout. Some have closed their doors temporarily or permanently which negatively impact everyone in the community. Delivery apps need to help these owners with reduced fees as it is also in their best interest to help these restaurant survive. Some restaurants who are operating will tend to mark up their prices to cover these fees which ends up being paid by the end consumer. When the government gives a green light to re-open for dine-in service, it is foreseeable that the seating capacity will be reduced to ensure physical distancing. Cleaning will also be important to reduce the spread of the virus which includes tables, menus and other surfaces.
BunkerChef is a great idea.
My tweak is that restaurants should do as much as the work, including cooking, as possible.
In other words, don't compete with "meal in a box". Instead, be a fresh version of delivery.
That means doing everything that they already do in advance for their normal operations. Leave only the "to order" parts to the person receiving the food.
This addresses the big problem with delivery, namely cold and soggy, while being a lot less work (and with a higher level of success) than "meal in a box".
Right now you have to negotiate rent relief (not just deferrals) from landlords because rent is the biggest overhead line item. Then ramp up volume takeout to stay above water. Its going to be at least a year to get back to normal Im afraid.
Thanks for the reply David M. I was never a fan of food delivery as it comes late, food is cold and you end up complaining. The ratings on the delivery person may be internal to the delivery app to help maintain service quality but I find takeout food is never the same as dine-in. I did order one time during a promotion with DoorDash and Joeys. The service was so slow where they were overwhelmed on the 1st day and my order got cancelled. The second try, the food ended up cold and found that the delivery guy waited 30 min more for another order that was to be delivered near me. I rather order nearby and pickup the food myself. Treat is as exercise.
Thanks for the reply Clinton Gallagher. Interesting take on your POV. Most sportbars believe that the draw is patrons come to watch the basketball, football, hockey, and soccer. I have seen some restaurant use their TVs to display specials and future events. Most restaurants do not invest in tech and hire 3rd parties to dev websites, online order or delivery. Wouldn't it be interesting that the part of the commercial breaks can fit short clips of specials and future events at their establishments or even local ads? Elevators now have screens with news updates along side some ads cuz we have nothing better to look at when we are in them going up or down.