A couple of years ago, Andrew Simmons had big plans for his restaurant subscription business.
And why not? After experimenting with a wide range of technologies in a San Diego-area pizza restaurant, Simmons had launched a pizza subscription model that helped him generate $30,000 in a single-day Black Friday sale. Confident in his approach, he figured he could replicate the model in new markets.
But as it turns out, expansion proved more difficult than expected. According to Simmons, the challenge wasn’t the technology or the concept of subscriptions; it was moving too quickly into markets where his restaurants hadn’t yet built relationships with local diners.
“We believed that the pizza subscription program would carry us through,” said Simmons. “But when you move into a brand new market where nobody knows your brand, it doesn’t really matter what you’re offering until people have a chance to try your food and try it for a while.”
The subscription idea was simple: sell a year’s worth of pizza upfront. Customers could purchase a plan, like $197 for 52 pizzas, and redeem one each week. It created recurring revenue and served as a buffer against unpredictable walk-in traffic.
While the concept didn’t translate as well in new locations, Simmons believes it could work for restaurant operators who already have a strong local following. That’s why he’s launched a new venture and website to help established restaurants offer their own subscription plans.
He says the key to a successful subscription business goes beyond the initial funding. Operators need to manage the funds wisely, track redemptions and subscriber communications, and plan inventory accordingly. His new platform is designed to handle all of that.
“This is crowdfunding meets foodservice,” Simmons said. “You raise money upfront, but you also take on the responsibility to deliver that product across 52 weeks. You have to be smart. Or you’ll crash the car.”
You can listen to my full conversation with Andrew to hear about his plans for his subscription business below or on The Spoon Podcast.
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