Online Ordering During Quarantine Could Kill Restaurants Faster, Plus POS COVID Responses

You probably read the title and thought we’d be talking about the risk of some restaurant employee infecting a customer with COVID-19. But that’s not what we’re referring to.

Restaurants are fickle operations. They produce very little profit, and are day to day cash businesses. A good restaurant will do 5-10% profit. Usually that entails significant alcohol sales and a fine dining atmosphere. These restaurants are not going to do well with delivery – nobody wants to spend $50 on a steak to go.

To put 5-10% into perspective, if a restaurant works a full year, only two to five weeks worth of revenue are making it back into the pockets of the owners, and that’s for good restaurants. Many restaurants don’t turn a profit, and it’s why up to a quarter of the small ones go under annually.

When you’re talking about expenses a restaurant must deal with, it breaks down a bit like this:

• Labor: 40%
• Inventory: 30%
• Rent: 10%
• Ancillary expenses (things breaking, insurance, licenses, etc.): 10% – 20%

If a restaurant does a bad job predicting demand, labor and inventory costs could soar and there would be no profit to be had.

Which is how we get to our point:

Without adequate forecasting, which is basically impossible to do in today’s climate, most restaurants will lose more money by staying open.

Even Apple, a company with hundreds of billions in capital and access to the best data scientists in the world, is announcing that they’re having a very difficult time predicting earnings because they can’t predict demand.

If a restaurant were to close today, they’d have rent, utility, and insurance expenses. But they’d avoid labor and inventory costs. And, in theory, utilities would be a bit lower.

Once you open for delivery or online ordering, you need to be really confident that you know how many customers are coming through your door or you’re going to order inventory that goes bad, or have too many employees on staff and lose money. Now, off-premises-only businesses can shed labor costs – this is the theory of ghost kitchens, after all – but you still need to forecast demand or it’s all for naught.

Some restaurants that are already to-go-focused will figure out the transition well, but the vast majority of restaurants would be financially better off closing their doors for the time being. It sucks big time, but that’s just the math.

POS companies have been stepping up to help merchants, especially those that want to stay open and continue off-prem dining. Below is a curated list of programs different restaurant companies have in place. If you didn’t make this list and have something to add, reach out to us and we’ll put you in here.

Brink

• Brink POS Customers can enable QR Code ordering to turn operations into outdoor Virtual Kiosk and/or Virtual Drive-Thru with zero hardware. The offering includes:
  1. Implementation in as little as 24 hours
  2. No set up fees
  3. No monthly SaaS payment until June 1st
• Automatic suspension of SaaS billing for any store that is temporarily closed for all business. The monthly payments will not need to be re-paid at anytime.
• Customers can apply for financial relief and all requests are being reviewed by the executive leadership team daily to work out the right solutions for each customer and brand

Countrhq

Launched Obur, which lets restaurants deeplink their menu by communicating a QR code to their customers. All incoming orders are paid online and linked to a browser-friendly kitchen screen. Within the kitchen screen every order status change generates a push message (e.g.: “ready for pickup”) to the customer.

Focus

• Delivery with dispatch (track customers, orders, and dispatch drivers) free through May, after May merchants can turn it off, buy it outright, or purchase it with a SaaS model
• Online ordering API fee waived through May
• Order text (status can be texted to customers) free through May
• Focus On (pay anywhere solution) has no device cost, no monthly fee, overages if cellular service is needed are waived, and application fee waived through May
• Things may be extended based on market rebound

FranPOS

4 months of free eCommerce/online ordering, delivery management, and customer review

Heartland

Heartland / Global wouldn’t reply to outreach, but resellers have shared that Heartland is offering 3 months of free online ordering with no strings attached. POS as a Service and SaaS are being suspended for 3 months for merchants who have temporarily closed.

Linga

Free POS software and online ordering for 6 months

Oracle Micros

Are working with each of their accounts on a case by case basis. Have also worked closely with their partner community to offer a “5-point tuneup” to help merchants quickly spin up off-premises operations with reduced costs from third party partners.

Order Counter

• Providing Hosted Gift Platform at no cost
• Providing Delivery Module at no cost 
• Providing Online Ordering at no cost through June 1, 2020. Locations still impacted by closure requirements will have extensions beyond June 1.
• Providing additional Tablet Software Licensing at no cost for existing customers through June 1. Tablets added during this time will not have licensing applied to these devices.
• Waiving all new License Fees through June 1

Revel

A $1M cash fund with three opportunities for customers that are down more than 25% in sales:

• SaaS fee waived for a month
• Free online ordering / delivery for up to two months (may be extended)
• Allowing merchants to move to Revel payment at-cost, meaning Revel will make nothing on the processing

RPower

• Letting users downgrade to one-user system to lower costs
• Offering free remote data access for select stores (analytics, reporting, etc.)

Shift4

• Waiving a number of fees for at least 3 months: all SkyTab costs, online ordering costs, and gift card costs.
• Raising over $200M for the small business community: for every gift card purchased through Shift4Cares.com, Shift4 will match an additional 5% – up to $10M!

Shiji

• Up and running within 72 hours, digital ordering for restaurants
• $50 one time discount for restaurant association members who use their online ordering (from acquisition of MyCheck)
• No processing mark up for digital orders

SpotOn

• Free online ordering for any business, including SpotOn websites, for the rest of 2020 – $0 set up fees, $0 monthly fees, no contract – only pay when merchant processes a credit card.  Merchants pay $45 a month starting 1/21/2021. 
• No POS fees until April 1st
• Flat platform fee of $25/mo until a business processes $5,000
• 100 free gift cards for any SpotOn merchant
• Free SpotOn mobile card reader for entire portfolio,  no set up fee, no shipping cost
• For any new client, $0 in monthly fees until August 2020 for all products and services

Tabit

Tabit will provide at NO COST for operators through our partner network:

• Tabit Pad (Ipad device with ruggedized enclosure and MSR for payments) for order entry of call in orders as needed at no cost
• Tabit Order online ordering platform setup
• Merchant ID setup via Worldpay platform 
• Menu setup 
• Website link, Facebook/Instagram links for Tabit Order site
• Tabit Chef for owner to monitor POS reporting and KPI’s on mobile platform 
• SaaS Monthly fee for all solutions waived during period of Coronavirus Pandemic mandated closure 

Talech

Free online Talech ordering through September.

Toast

• Launched RallyforRestaurants encouraging people to buy gift cards and will donate up to $250,000 to restaurants
• Waive three months of SaaS fees for Toast Now, a digital channel tool for online ordering, mobile ordering, contactless delivery, and e-gift cards

Touchbistro

• Waiving fees for any merchant who calls
• Launching order ahead product without commissions
• Site with a number of free and discounted Touchbistro tools

Good luck out there.