Deciding whether or not to offer a food menu can be a make-or-break operations decision for bars and nightlife establishments. Do they invest in a kitchen to widen their appeal, or do they risk alienating a hungry happy-hour crowd?
The food technology startup 2ndKitchen hopes to establish itself as the culinary compromise for kitchen-less businesses, including bars, nightclubs, coffee shops, hospitals, and co-working spaces. The company offers in-house kiosks, through which customers can order from nearby restaurants for delivery.
Here’s how it works: 2ndKitchen will send participating businesses everything they need to install the food-delivery platform free of charge.
After that, 2ndKitchen allows up to a week to match the bar with nearby restaurants. Bars can work with their new partners to use their full menus or create limited/custom menus for a more streamlined experience.
Customers can place their food orders with the nearby partner restaurants through the 2ndKitchen kiosk and put a table tag where they are seated or standing for easy delivery. Businesses are limited to partnering with one restaurant per meal, but they can have different options for different meal times like brunch, happy hour and late-night eats.
Technically, 2ndKitchen is not an essential service. Bar customers can — and already do — order food delivery directly to a bar through third-party apps. But 2ndKitchen aims to be the middleman that makes the process seamless.
“Business owners are realizing that bars that don’t have their own kitchens are losing customers,” said 2ndKitchen co-founder Nick Anastasiades. “However, some businesses who do have kitchens are forced to continue serving food even if they are losing money on it from operations costs.
“If you’re a bar, it’s all the perks of operating your own kitchen but without the hassle,” he added. “The benefit for you is that you have customers staying longer and spending more money on items that actually make you money, like alcohol. We did an informal study [of our customers] and found that guests stay an average of 40 to 45 minutes more when they have food options — that’s about one drink per person.”
Although 2ndKitchen services are free for bars to use, the technology platform does charge customers a convenience fee in the single digits, though there is no delivery fee.
On the restaurant side, participating kitchens can receive orders from nearby businesses through a tablet or 2ndKitchen’s point-of-sale system. Restaurants are paid for the orders they receive through 2ndKitchen on a commission-based arrangement, while the platform takes a “small cut” from the restaurants they partner with.
Anastasiades declined to divulge their customer convenience fee or commission costs for partner businesses — both of which vary from city to city — but said “the restaurant will be delivering at a fraction of the cost of what other delivery companies charge.”
He explained that 2ndKitchen is able to keep fees to a minimum because they keep the delivery radius very small: the restaurant and local business should ideally be within walking distance of each other, or at least less than a mile apart. Therefore, Anastasiades said, it’s easy for restaurants to use their own team members to “walk over” restaurant orders without needing to pay courier or delivery services.
In February, the B2B company announced a fundraising round of $1.35 million from investors led by Hyde Park Venture Partners, which will allow 2ndKitchen to bring its platform nationwide from its roots in Chicago.
Before their most recent round of fundraising, 2ndKitchen was only available to businesses in the Midwest, but now they have the capability of setting up services anywhere across the country.
In the future, Anastasiades hopes to publicize their services on restaurant websites or on Yelp pages so customers can know about food options when researching for a happy hour spot online.
“We are a value-added service,” he explained. “Our service makes everything easier. Think of us like ordering an Uber versus hailing a taxi outside. We’re creating an intuitive system of partnerships that’s significantly different from other delivery platforms out there.”
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