Friends of Branded!
Happy Saturday and I hope you had a great week!
About a week ago, American Express announced an agreement to acquire Tock, a leading reservation, table, and event management technology provider.
Amex is purchasing Tock from Squarespace, the design-driven platform that helps entrepreneurs build brands and businesses online. During the pandemic, when ordering online was the only game in town for restaurants to earn, Squarespace acquired Tock.
Tock is on the relatively shortlist of technology platforms that helps connect restaurant operators and their guests for online and digital booking (dot-YEAH).
Quick sidebar (yes, a digression right out of the gate this week in the Top of the Fold), Branded’s restaurant, City Crab, was an early adopter of OpenTable almost 25 years ago. At the time, reservations weren’t all the rage and there was certainly no such thing as doing it digitally. The phone was the advanced tech-enabled device used to make a reservation and a physical notebook (usually maintained with a pencil b/c of all the inevitable changes) was how reservations were recorded.
OpenTable, Resy, and Tock, along with a handful of others are the platforms that are most widely recognized and while each has their own market positioning, for the most part, these platforms perform relatively similar functions.
For folks in the industry, much has been written about Amex’s acquisition of Tock, especially b/c Amex is also the owner of Resy. While I feel this acquisition has been sufficiently ‘covered,’ the reservation space is one that is near and dear to Branded’s heart and a topic of particular interest to me. I’ve written more than once here in the H^2 about the emergence of the black-market for reservations and how much I despise the practice and those that perpetrate it (“perpetrate,” verb, to carry out a harmful, illegal, or immoral action).
Despite my hatred of this black-market (b/c it’s contrary to everything Branded is doing to help restaurant operators be more successful), I was surprised, maybe even shocked to see the New York State’s legislature pass a new bill (called the Restaurant Reservation Anti-Piracy Act) that will require 3rd party online reservation platforms to enter into a written agreement with restaurants before being able to list reservations on their website.
Just to put some perspective around this, the New York State legislature has never bothered to stop 3rd party delivery platforms from onboarding restaurants and offering their menus to its customers without the restaurant’s consent, but that’s obviously completely different (eye roll and sarcasm intended).
Can you imagine the holding cell at a police station in connection with the offense of selling contraband reservations?
- Inmate #1: What are in for?
- Inmate #2: I sold a reservation without written consent of the venue.
- Inmate #1: You badass!
So, if I feel like the Amex acquisition of Tock has been covered, why am I ‘covering’ it in this week’s Top of the Fold? I love and appreciate your question.
The reservation game is about to change and it’s going to be an important and meaningful one that will benefit restaurant operators.
More important than Amex’s acquisition of Tock or the really good work and value these reservations platforms bring to hospitality operators, despite my loathing of the players in the black-market, as a restauranteur, I’d like to buy them a beer. This is not sarcasm, and it’s with genuine appreciation for what they’ve done for the industry that has me expressing this gratitude.
Give me a second and hear me out.
The reservation scalpers have elevated the importance and made the ‘proper’ platforms even more of a strategic ally for restaurants. I'll go even further; the black-market platforms have also helped educate both the guests and restaurant operators that these reservations have value.
As Sy Syms of the Syms Corporation made famous, “an educated consumer is our best costumer.”
Prior to the emerging secondary market for reservations, restaurant operators were giving their inventory of tables away for free. I already admitted that I’m old enough to remember when reservations were not the norm and that means I’m also old enough to remember that a guest could reserve a table with no risk or accountability (and for the most part, that remains the norm more than it does the exception). Cancelations and no-shows were (and still are) common and an understandable part or cost of the reservation process. Staffing reservationists and additional resources to maintain and deliver the best experience for our guests was also part of the cost of operating this part of our business (the digital platforms have reduced the dependency on human capital, not completely, but meaningfully).
At no point were reservations seen as an additional source of revenue for restaurants, but that’s now changed, and we owe that enlightenment to the black-market reservation platforms.
Yes, I understand and respect that diners don’t want to be on the hook and owe money in the event that their plans change (and of course, we know that plans do change). Guests have become accustomed to reservations being a free option for them, but that was until people figured out there was money to be made standing in between the restaurant and the guest.
Restaurant reservations represent yet another example of how this industry is held to a different standard than other industries. If you had a reservation at a hotel, with an airline, rental car, or a ticket to a sporting event, concert or otherwise, there are limits to when and how you're not responsible for the reservation or ticket and leaving the business on the hook as a result of the changes in your plans. Such limitations, for the most part, have not been afforded to restaurant operators and there are of course many reasons for that and certainly one of them simply comes down to the over-supply of dining options. But there is still the expectation that the guest has the right to reserve a table and that the option to cancel it shouldn’t be a risk that the guest needs to take or a cost that they’re responsible for.
“Dynamic pricing” are words that most guests don’t want to hear and the media, for the most part, certainly tries to excruciate those who believe that the restaurant industry should be afforded the right to the same tools other industries use that will create a more fluid and equitable pricing arrangement. But leaving those words alone (and I’ll direct you to take this topic up with Branded’s friends & partners, Sterling Douglass, CEO at Chowly, and Ashwin Kamlani, CEO at, Juicer who are both not only passionate about pricing science for restaurants, but are wicked smart and on a mission, that Branded completely supports, to bring fair pricing to consumers by providing restaurants with menu pricing intelligence that helps restaurants price accurately and fairly), reservations are entering a most important phase of being a revenue source for operators.
This change in how restaurants are going to view reservations is a BIG one and that’s the story or key takeaway I want people to understand about the acquisition of Tock and the importance of reservations for restaurants. Yes, Amex’s press release in connection with its acquisition of Tock talked about the $100 billion spent in restaurants by its customers within the category of Travel and Entertainment in 2023 and of course it highlighted the unique dining benefits that Card Members would have access to. But I loved “B side” of the quote by Howard Grosfield, President, US Consumer Services, American Express, where he remarked that the credit card company would provide restaurants with “more technology to help their businesses thrive. We will be able to offer restaurants the tools to deliver more personalized hospitality, facilitate pre-paid experiences like tasting menus, and provide more convenient ways for customers to pay the bill.”
Truth be told, and I call them like I see them, I believe the continued advancement of reservations platforms will prove to be far more helpful and advantageous to restaurant operators than to their guests. At the risk of my upsetting my friends at Amex (and I'm a big fan of Amex and long time card member), the great work they’ve done with Resy and that I expect they will do with Tock has wonderfully democratized the reservation process and I dare say, has reduced premium access to restaurants through the American Express card. Sorry, not sorry, but the last time I called Amex for help with a reservation, they directed me to the Resy platform to see if I could find what I needed there. Respectfully, I didn’t need Amex for that.
My overarching point is now that we know there is a market for reservations and that there is value in the option that comes with securing a table, it only goes one-way from here.
Of course, I’m not going to let this Top of the Section conclude without my mentioning that I’ve been pounding the M&A drum and Amex’s acquisition of Tock and Rooam is just the most recent example of the consolidation that is underway. Reservation platforms is an area Branded expects to see more activity and that will include those that build, those that buy and the emerging platforms that will be coming onto the scene b/c the reservation space remains far less crowded than others.
Delivery is a convenience and that costs money. Reservations, as a claim on a table at a specified time, has value and as a free markets’ person, the market should determine the value of that claim or right to a table. Now that both guests and restaurant operators have seen there is value associated in the securing of tables, the reservation game is forever changed (and I find that incredibly exciting).
Let’s get it on!
It takes a village.
There was a time when the Shoutout section had more to do with the articles I was reading than the excellent work by Branded’s portfolio companies.
With my continued focus on the consolidation in the industry and the role M&A will play in making it happen, I wanted to share an article that caught my attention (and maybe, just maybe, supports my position). 😊
I wrote above in the Top of the Fold section that delivery is a convenience and therefore needs to be expensive. Here in the Shoutout section, I’ll go a little further and state that as long as humans are needed to get the food order from point A to point B, delivery will not only be an expensive service, but with the sheer number of players competing, it’s a race to the bottom.
Consolidation is a key factoid that can at least give companies the opportunity to win (although it will remain expensive for guests).
According to this article from the Financial Times, the food delivery companies “have started serving up profits.” (looks like I’m not the only writer enjoying the occasional and intentional pun). 😊
While the article correctly points out the checkered history in the 3rd party delivery sector, the industry needs to consolidate and that’s what Branded expects will happen. The airline industry once struggled when there was an abundance of flights and airlines to chose from. Today and following a meaningful consolidation and with over 80% of the flights in the US controlled by 4 airlines, airlines are headed for record revenues in 2024 as demand for travel soars. Margins remain thin, but revenues are expected to set a high watermark at $996 billion in 2024 (up almost 10% above 2023).
The article acknowledges that small deals are of course possible, but the expectation is that it’s a big deal across borders that’s needed and will in fact get done. The FT acknowledges the financial strength of the US market and therefore gives DoorDash as having the upper hand and believes the UK’s Deliveroo is the big play that they’re expecting.
Reuters also ran with the story that Doordash and Deliveroo, which tried to come together in 2022, met, but abandoned talks over price.
And now with a little shoutout and love to our Family Table, readers of the H^2 know that Branded loves this industry and specifically the amazing people that drive it. We applaud QSR Magazine for many reasons, but this week particularly for its recognition of the ‘New(er) Talent’ that comprises QSR’s Young Leaders to Watch.
28 of the industry’s best and brightest were recognized and Branded was thrilled to see that two members of the Class of 2024 came from our newest portfolio company, Big Chicken.
Trisha Durham, Head of Training and Will Gladstone, Marketing Manager, made this year’s list b/c of how both are integral parts of Big Chicken’s success story.
Ms. Durhan is being recognized for her BIG role in maintain the high standards and smooth operations across Big Chicken’s network of restaurants. According to the article, Big Chicken wouldn’t have opened 18 new units in 2023 and another 4 so far this year.
On the marketing strategies side of Big Chicken’s house, Mr. Gladstone is credited with contributing to the brand’s growth and visibility, especially through innovative partnerships and digital initiatives. Specifically, his collaboration with Dr. Shaquille O’Neal’s sports management agency and his hands-on approach to marketing, including menu taste tests and foosball tournaments, reflect his creative and dynamic leadership style.
Collectively, Ms. Durham and Mr. Gladstone represent the dynamic and forward-thinking ethos of Big Chicken. According to the article, Mr. Gladstone’s strategic marketing initiatives complement Ms. Durham’s focus on operational excellence and employee development, creating synergy that drives the brand’s continued success in the restaurant industry.
Yes, when Branded invested into this fast-growing company, we spent a great deal of time with CEO Josh Halpern, Supply Chain Operations Director Tony Giardina, CIO Jason Mceachern, and SVP of Franchise Leadership, Sam Stanovich. We know to win in this and any business, it takes a village, and we love getting to know the depth and breadth of the team at Big Chicken and we’re proud to be working with Trisha and Will and other talented and dedicated folks at this company. Let’s grow!!!
Branded invites readers of the H^2 that are interested in learning more about our portfolio companies, and investment strategies to become part of our Access Hospitality Network.
While Branded has been incredibly active in the emerging technology & innovation sectors of the hospitality industry, there’s no question that (i) emerging brands; and (ii) brands that are taking their business to the next level, and are tech-forward thinkers, are also very much top of mind at Branded.
Branded values the opportunity we’ve been afforded to help and be part of the roadmap of two such amazing brands, LDV Hospitality and Big Chicken.
Let’s dig in!
In our world of full-service and high-end restaurant operators, members of Access Hospitality Network are aware of the specific work Branded is doing with the team at LDV Hospitality.
I’ve remained quiet as LDV's CEO, John Meadow, and his team launched its first project with a hotel, The Maidstone, where LDV envisioned, programmed, and now operates the hotel.
To be clear, this is not LDV’s first rodeo working with hotels as this operator continues to have great success in the NOMAD area of Manhattan at The Jane Hotel with Scarpetta and The Seville. This operator is also partnered with 18 hotels around the world, but this project at The Maidstone is different as LDV’s influence expands well beyond the food & beverage.
The article goes on to share that the ambiance of the dining room is familiar and fun, like a big dinner party with old and new friends where hotel guests and locals can dine and mingle. According to Mr. Meadow, “I like the idea of bringing together an eclectic mix of people, locals and visitors - it’s what makes a hotel interesting.”
Give the article a look if you’d like to see what the LDV team is doing at this hotel with a 150-year history that is now embarking on a new era at the property.
As I wrote last week, there are a few elite and coveted groups that have the unique ability to bring the good life (IYKYK) and offer guests a distinctively Italian touch. Branded is super excited to be partners with the LDV Hospitality team and the journey we're now on together.
In our world of quick-service and casual (and BIG FUN), members of our Access Hospitality Network have been hearing a great deal about how Big Chicken is expanding its footprint in a rather unconventional way. Specific to the territories where the company wishes to land & expand, for Big Chicken, it’s about its franchisees, the people they’re partnering with and as CEO Josh Halpern always reminds me, a maniacal focus on franchisee economics & ensuring that Big Chicken does everything it can to help its franchisees win!
That’s why it’s with great pride that I get to ask the legendary Warren Buffett to make a little room, b/c Big Chicken is coming to Omaha, Nebraska.
LeBron & Bronny James aren’t the only father-son duo making news this week, as Big Chicken is partnering with another father-son duo, Tom & Zak Davis, to bring this brand to Omaha. As a franchisee-centric company, it’s always about finding the right people to partner with for Big Chicken that rules the day.
Tom & Zak Davis will be opening two Big Chicken locations in Omaha.
Per KETV in Omaha, the senior Davis of this duo shared “our experience has provided us a perspective on Big Chicken that we feel fantastic about. We know that it is the right time to bring the quickly growing brand to Omaha. There are a lot of parallels for us with Big Chicken and its leadership team. We have a deep appreciation for running great restaurants, and Big Chicken’s team is equal to the match. We have been following the growth of Big Chicken for a while, and once we were finally able to try the menu, we decided to get serious about opening our own stores in Omaha.”
Branded loves the pace in which Big Chicken not only continues to grow, but how they’re doing it with good people. Now that’s a village I can hang with! 😊
In today’s episode of Hospitality Hangout, Michael Schatzberg, “The Restaurant Guy,” and Jimmy Frischling, “The Finance Guy,” dive into an engaging conversation with guest Greg Flynn, founder, chairman, and CEO of the Flynn Group and Flynn Properties.
Pull up a chair and grab a napkin as Greg serves a hearty helping of inspiration. Greg shares his pursuit in the hospitality industry, his insights on various market segments, and his experiences with different aspects of the business, including restaurant operations, real estate investments, and the expansion into fitness centers. From flipping burgers at McDonald's to running the show as the head honcho of the world's largest franchise operation, Greg's journey is a real-life recipe for success, highlighting the key ingredients of operational excellence, a dash of strategic diversification, and a generous portion of adapting to ever-changing market trends. So, sit back and enjoy this conversation that's sure to leave you hungry for more knowledge in the dynamic world of hospitality.
You can tune in on Spotify, Apple, Amazon, iHeart, or your favorite listening platform!
CONMEBOL Copa America Tamias Fan Zone
Get ready for the ultimate fan experience at the CONMEBOL Copa America 2024 Tamias Fan Zone
TECHNOLOGY
CMO vs. VP of Marketing: Steering Your Company's Growth with the Right Leadership
By: Seth Temko, Solutions Services Partner at Branded Hospitality Ventures
Explore whether a CMO or a VP of Marketing fits your company’s vision, with insights on strategic influence, operational focus, and aligning marketing with your business goals.
Welcome to the new IFMA
The future of food-away-from-home is evolving—and so is our membership structure.
MARKETING
The Single Best Marketing Hack to Get Higher Open Rates on Email
By: Rev Ciancio, Head of Revenue Marketing at Branded Hospitality Ventures
Struggling to get higher open rates on your emails? Are you stuck in the promotions tab? Are you just kind of looking for some optimization tactics?
ASK THE HEADLINE
🔍 Got Questions? We've Got Answers! 🌟
Satisfy your thirst for knowledge? Look no further! It's time to dive into our brand-new segment: "Ask The Headline"! 🎉
📅 We'll be answering YOUR questions every week. And here's the best part: you can choose to stay anonymous or receive a fabulous shout-out when we feature your question!
That’s it for today!
See you next week, (about the) same bat-time, same bat-channel.
It takes a village!
Jimmy Frischling
Branded Hospitality Ventures
jimmy@brandedstrategic.com
235 Park Ave South, 4th Fl | New York, NY 10003
Branded Hospitality Ventures ("Branded") is an investment and advisory platform at the intersection of food service, technology, innovation and capital. As experienced hospitality owners and operators, Branded brings value to its portfolio companies through investment, strategic counsel, and its deep industry expertise and connections.
Learn more about Branded here: Branded At-A-Glance