By Joshua Maloni
What happens after you place an order for pickup or delivery at your favorite restaurant? The answer might surprise you.
Now, it’s not the food preparation or mode of transport that’s astonishing, but rather the distribution of funds.
So says Steve Ambrose and Bob Heil, two Western New York entrepreneurs who have decades of experience with the food and beverage industries.
“The average consumer doesn't understand or doesn't really know what goes on behind the scenes when an order is placed on a platform. They think, ‘I’m spending $50; the restaurant is getting my order and my business; my $50 is helping.’ ” Ambrose of YUMedia said.
Heil, of SLA Solutions, explained up to 30% of that order is often going to a third-party restaurant app.
Ambrose said, “Because we have been in the industry and know it, the margins in the hospitality business are already razor-thin: labor, food costs, all that variable. When you add in a commission, and other fees – marketing fees – you really don't make a whole lot of money.”
With many of their favorite eateries struggling – even more so in the first months of the coronavirus pandemic – “We realized that the restaurant industry was in dire straits,” Heil said. “And as we're watching our clients prepare to close and starting to close, we saw an opportunity. Actually, Steve came up with the idea to develop a delivery system that was not as invasive.”
Ambrose explained, “We looked at it and said, ‘There's got to be a way for them (to collect and fulfill orders), but also retain more of the money; increase their margins; and make real money from it.’
“At the beginning, I wanted to create a platform that they could manage everything all in one. So, it was going to be table reservations, takeout, delivery, in-house dining. And then, due to the shutdown, we focused our research and development more on the takeout and delivery.”
appétit was created to tip the scales back in favor of local restaurant owners.
Heil said, “Those other (food-ordering) platforms – and us – have delivery fees. They're charging 20%, 30% off the top of the cost of the food. That comes right off the top. The restaurant now gets 70% of that income. So, that platform keeps 20% or 30%. Then there's a delivery fee that the consumer pays. We also have a delivery fee that the consumer pays. We're equally competitive to their charges, because delivery is delivery. Our major difference is that we don't take anything off the top of the restaurant. We charge the restaurant a very budget-able flat fee number – $99 – versus becoming a partner, if you would, with the restaurant, and taking a major chunk of the profits.”
He added, “Our tagline is ‘Local app for local eats. We're very relational with our clients. That's what's built our business. The fact that we're hands-on with them, and we look out for their best interests rather than just sign up and let's look at the numbers. … That’s not what we do at all.”
Ambrose said, “Where we really succeed in what we're starting to do more of is that hands-on service. We go and meet with our merchants every month. We'll take some pictures. We do promotions. ‘Hey, saw your orders were down this week, what can we run? What specials are you running?’ ”
appétit was built to benefit eateries, but Ambrose said the customer also benefits.
“They go on orderappetit.com. They can search what they're craving – you know, a specific restaurant, an area – and choose from any of those restaurants,” he said. “Another big advantage to us is that we don't put limitations on delivery. So, for example, if I live in Amherst or Kenmore and I want Brickyard (in Lewiston), we'll do that; we'll deliver that.
“During the pandemic, we started and focused downtown (Buffalo) because, if you look at it, downtown – if you’re down on Ellicott and you’re at Tappo, your average customer, or a majority of your customers, don't live within three miles. There's only office buildings. So, they were taking a hit just delivering, because there's really not that many people within that radius.
“We're really trying to give the restaurant the ability to reach anybody that wants it. So, they go on, they search, they build their cart; it's pretty similar to any of the other platforms, but our focus is only on local. We don't do national chains. We don't do McDonald's. We don't do any of those. It's all local, independent.”
Right now, appétit is a web app.
“We did this without any investment, all self-funded,” Ambrose said. “The main goal of this was to just help our clients, and the people in the industry, get through that – whatever that timeframe (with COVID-19 would be). Back then, we had no idea if it was a month, five months.”
He said, “We just finished designing our mobile app and hope to release it by October/November.”
Down the road, “We would eventually like to get back to that all-in-one hub – a place for owners who have so much going on, to really manage their revenue streams in one place,” Ambrose said.
For restaurants looking for more information, call 716-500-EATS (3287) or email [email protected]. Drivers who are interested or looking for more information can email [email protected] or apply here.