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How do restaurants perceive ideas for increasing cash flow during the pandemic, like events, subscriptions, all-day cafes or gift cards?

Chris Webb

Co-founder & CEO at ChowNow

More the latter. I’ve seen firsthand cases where restaurants set up some type of subscription, and when their dining rooms open again and they get back to their core business, a lot of those subscription programs fall by the wayside. And, unless it's providing meaningful revenue, well—restaurants are working 15 hours a day as is, so it's really hard to layer in something that's not driving a whole lot of revenue for restaurants, and they tend to get dropped pretty quickly.

One specific example of what you're describing is wine clubs. Restaurants would run their own wine club and every month, their sommelier would pick a couple bottles of wine and mail it to you or you'd come and pick it up at the restaurant. 

I'm still bullish on some versions of subscriptions or memberships—I do think memberships are the future for a lot of restaurants. I don't think it's going to be mandatory, but I think there's something really interesting there. 

In 2020, we rolled out a very simple feature here at ChowNow that allows restaurant diners to become members of their restaurants. They pay an upfront membership fee and then get an ongoing discount for a year. That was all about cash flow and helping restaurants bring in some upfront revenue for the year which usually amounted to about 100 bucks.

With the diners that paid 100 bucks, it was better than gift cards. The issue with gift cards was that they would all get redeemed at the same time. And even though you collected money up front, all of a sudden as soon as the restaurant opened, you got slammed with gift cards and you had already paid for that revenue. 

Our membership model was different because you got paid up front but then you'd give, for example, a 20% discount any time someone ordered. To get that discount, they actually had to spend money on food and order at your restaurant and do it multiple times, so that cost was spread over many orders.

We haven't built upon that original membership program that we still have today, but we hope to in the future. Perhaps not the immediate future, but it is certainly something we see value in. 

I think there's a membership model that's really interesting where you become a member of your local restaurants in a similar way to how you become a member of a community like Soho House. You get different things like access to happy hours, and it creates a recurring revenue stream which restaurants don't typically have. However, I haven't seen anyone crack the code just yet.

Find this answer in Chris Webb, CEO of ChowNow, on the new restaurant stack
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