Photo courtesy of Fooda
By Ed Avis
Luis Escobar was searching online for a third-party delivery company for his restaurant, Sabroso Mexican Grill in Chicago, when he stumbled upon something completely different: Fooda, a company that contracts with local restaurants to provide food service to large office buildings. Escobar signed on with Fooda last fall, and it has become a solid part of his business.
“Fooda is great for us,” Escobar says. “They give you a platform where you can advertise your restaurant as well as make money at the same time.”
Fooda, based in Chicago, launched in 2011 and has a presence in 24 cities across the United States.
“We’re working with 2,300 restaurant partners and we serve a couple of thousand workplace sites, including company lunchrooms, office building lobbies, and cafeterias,” says Stafford McKay, Fooda’s director of marketing. “Fooda gives the restaurants a rent-free location with a captive audience.”
Mexican food is among the most popular cuisine at Fooda locations, the organizers say: “Mexican is always in the top three cuisines in every city we are in,” says Katrina Michael, the restaurant sales manager for Fooda.
How Does it Work?
Fooda offers a variety of cuisines in each of its lunch-time locations every day. For example, the Fooda location in a large office building might have pop-up restaurants serving Mexican, Thai and burgers one day and sandwiches, salads and Indian food the next. Each food station is operated by a different local restaurant.
The restaurants themselves decide which menu items to bring to the Fooda location. Escobar says his bestsellers are burritos and tacos.
Customers pay for their food either directly at the pop-up restaurant or, if Fooda is set up in a cafeteria, at a central pay station. Fooda created a tablet-based POS system that accepts credit cards; the restaurants get their earnings from the credit card sales within a week. The company takes a cut of the sales.
“Fooda takes 20 percent of the first $1,000, and 25 percent after that,” explains Karla Garcia, owner of Tecalitlan Mexican Restaurant in Chicago, who has participated with Fooda for the past two years.
In addition to the lunch-time pop-ups, some Fooda locations serve breakfast. For those locations, the same restaurant runs the operation every day. For example, Escobar’s restaurant serves breakfast – including breakfast burritos, waffles, and typical egg dishes -- five days a week at the Groupon building in Chicago’s Loop.
“We serve 75 to 100 people breakfast every day,” Escobar says.
Weather Affects Sales
Naturally, some days sales are better than others. Michael says the company uses its sales data to create the most realistic estimates possible.
“We use artificial intelligence to estimate the number of customers,” Michael says. “We can look at that restaurant’s previous performance and other restaurants’ performance, and we consider the weather and the location. We create the schedule one month out – ‘You will be at Willis Tower on Monday and you’ll sell 100 meals.’ The day before we update that. For example, if there are thunderstorms predicted, we know more people will eat in. The idea is to create the smallest amount of waste as possible, because we know that is a burden for restaurants.”
Garcia confirms that sales are better when the weather is worse: “If it’s 90 degrees outside everyone is going to go out and take a walk for lunch and not eat inside. But if it’s raining or 20 degrees out, you know you will be busy. There are days we serve 150 people in three hours.”
Marketing Advantage
The money the restaurants earn at the Fooda events is important, but so is the marketing exposure. Fooda sends an email to all of the office tenants introducing them to the restaurants that will be offering food that day. Since the participating restaurants rotate among different Fooda locations, many potential customers learn about them.
“Our advice to restaurant owners is that instead of paying money to some marketing firm, get out there and let people try your food,” McKay says. “The lobby of Willis Tower is your dining room today. The lunch room at Deloitte is your dining room tomorrow. Those are all customers looking for new restaurants to try.”
Garcia confirms that the exposure pays off: “I’ve found that you bring in new customers who say, ‘Where is your (regular) restaurant?’ So I made little coupons to give to our customers, and I’ve noticed more and more people bringing those coupons in to the restaurant.”
Apply Online
Fooda takes applications from restaurants that want to participate via its website, https://www.fooda.com/restaurant-partners. Michael explains that the participating restaurants must be able to staff the Fooda location with trusted personnel; the restaurant must be in good standing with the department of health and other regulatory agencies; and the cuisine must travel well and be interesting to patrons.
“We’re looking for variety in the menu, and restaurants that are well received in that neighborhood,” Michael says. “If a restaurant meets the requirements, we’ll give them a fair shot at a few events. If that goes well, and our clients enjoy it, we’ll keep scheduling them.”
Ed Avis is the publisher of el Restaurante. Reach him at edavis@restmex.com
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