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Daily news and analysis about the food tech revolution

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Week in Restaurants: WeWork Shuts Down Spacious, Just Eat Rejects Another Takeover Bid

Have I got news for you: Today is the last day you can get a free burrito from Chipotle by entering a code into Instagram. Snack on that while you also chew on a few final bits of news that happened this week in the restaurant world.

WeWork Shuts Down Spacious
Just four months after acquiring it, WeWork is shutting down Spacious, a startup that turns high-end restaurant space into coworking locations for members. The shutdown is one of many cost-cutting moves the much-maligned WeWork is making to offload businesses it has acquired over the last few years. Spacious’s whole staff — 50 employees total — have been laid off. Current Spacious customers will be given prorated refunds and discounts on some WeWork memberships, according to a statement from WeWork.

Delivery Service Just Eat Rejects a Takeover Bid — Again
Naspers-owned tech investor Prosus has once again made a hostile bid for food delivery company Just Eat. Once again, Just Eat has rejected the bid, saying its board “continues to believe that the Prosus Offer fails to reflect appropriately the quality of Just Eat and its attractive assets and prospects.” This is the third bid Prosus has made for the company in the last few months as it tries to win Just Eat away from Takeaway.com, who announced plans to acquire Just Eat in July. Prosus’ latest counter bid was for £5 billion (~$6.6 billion USD). 

Jimmy John’s Expands Loyalty Program Nationwide
Following a six-month test, sandwich chain Jimmy John’s this week did a nationwide expansion of its Freaky Fast Rewards program, which lets members build up rewards points, track them, and pay for food via the Jimmy John’s mobile app. One-tap technology in the app enables users to make in-store payments via Google Pay and Apple Pay. According to a press release, more than 1.8 million people have signed up for the program since it launched in March of 2019.

Also This Week:

  • Charlotte, NC-based chain Clean Juice has teamed up with multiple third-party delivery services to widen its off-premises reach.
  • Restaurant management platform Waitbusters integrated its online order feature with Google Search and Maps.
  • Swag alert: My friends at Nation’s Restaurant News have the definitive list of QSR-branded merchandise available this holiday season.

WeWork to Acquire Restaurant Coworking Business Spacious

WeWork announced this week it will acquire NYC-based Spacious, a company that helps high-end restaurants turn their dining rooms into coworking spaces for parts of the workday. Terms of the deal were not disclosed. Spacious has raised $9.1 million to date.

Founded in 2016, Spacious is one a growing number of companies working with restaurants to turn under-utilized dining room real estate into daytime coworking space. Typically, Spacious and other companies team up with high-end establishments that only operate at certain times of the day — for example, from 5 p.m. to 10 p.m. for dinner — and offer coworking space during hours the business would normally be closed to the public. Spacious manages all logistics around membership, sign-up, and sign-in, and communicates via the Spacious app or website about any changes to the restaurant’s schedule, like it being temporarily closed for a private event.

Restaurants themselves only have to provide the space and limited amenities (e.g., coffee). As I wrote last year, teaming up with Spacious is a smart move for restaurants:

The match makes sense. According to one study, an estimated 5.1 million people worldwide will be using a coworking space by 2022. But not all of them can or want to pay $300 and up for a place like WeWork or Galvanize (more on that in a minute). At the same time, restaurant profit margins are thinner than the blade of a Wüsthof paring knife, and partnering with coworking companies is an opportunity for those businesses to make extra revenue.

The acquisition by WeWork, now officially rebranded as the We Company, is another match that makes sense. Despite labels like “$20 billion house of cards” and much doubt over its impending IPO WeWork has undeniable influence the coworking world. In 2019, the company ventured into the food world by launching WeWork Food Labs, a cross between a physical workspace and startup accelerator for food businesses. Given WeWork’s reach in the coworking arena, the acquisition of Spacious could give more restaurants the opportunity to put under-utilized space to work during off-hours and improve some of those aforementioned razor-thin restaurant margins.

Back in 2018, there was much talk, from The Spoon and others, of restaurant coworking spaces offering more affordable, flexible alternatives to larger coworking entities, and that companies like Spacious could soon be gobbling up WeWork’s customer base. With this week’s news, it seems the opposite is now true.

Disclosure: The Spoon is a launch partner with WeWork Food Labs. Read Mike’s Publisher’s Note here to learn more about why we’ve teamed up with WeWork and the editorial standards we’ve put in place for coverage of WeWork Labs companies moving forward.

Restaurants Are the Next Big Coworking Trend and Everyone Involved Benefits

The restaurant-as-coworking-space concept isn’t exactly new. Nor is the idea of double-duty public spaces. But man, are there a lot of options these days, even compared to a couple years ago.

The match makes sense. According to one study, an estimated 5.1 million people worldwide will be using a coworking space by 2022. But not all of them can or want to pay $300 and up for a place like WeWork or Galvanize (more on that in a minute). At the same time, restaurant profit margins are thinner than the blade of a Wüsthof paring knife, and partnering with coworking companies is an opportunity for those businesses to make extra revenue.

Restaurants that do so are typically higher-end places with no lunch shift, so if you choose to park yourself at one of these spaces, you’ll most likely be surrounded by posh decor and $150 bottles of wine. Buying food is not a requirement, and some places don’t even open their kitchens up to workers. Other restaurants offer lunch specials, and my favorite place is attached to the Gotham Market food hall in Fort Greene, Brooklyn. While there is some variation, hours for these coworking spaces are typically between 8:30 a.m. and 5:30 or 6 p.m., so don’t plan on showing up super early or leaving extra late.

Of the benefits to this style of coworking, cost is probably the number one draw. Because these coworking companies don’t have to build out infrastructure (seating, utilities, etc.), they can charge considerably less for membership fees. No, you won’t get perks like around-the-clock hours and private meeting space, but for those who just need an office away from the home office, the savings are enormous.

With Spacious, for example, $129/month gets you access to all of the company’s locations, and the price goes down to $99/month if you sign on for an annual membership. Also in NYC, KettleSpace charges $99 for a month-to-month all access membership. Further south, a $150/month membership to Arlington’s CoworkCafe gets you full access and a $50 food credit. WorkEatPlay ranges from $5 for a day pass to $145 for a Premium membership with special weekend retreats. Free coffee and tea are pretty much always part of the deal.

The restaurants benefit, too, since it allows them to put their unoccupied daytime space to use and make a little money from it. Nick Jiang, cofounder of San Francisco’s Birdnest, reckons his company nets restaurants 15 percent more in revenue on average. It’s not a bad way to advertise, either, and many places offer members happy hour deals in an effort to get them to stay after working hours. Switch Cowork, in Austin, goes as far as to hold its own happy hours at the locations. Many of Sydney, Australia-based TwoSpace‘s locations do the same.

Another perk that isn’t necessarily advertised but super important is sound. If you’ve ever had to make your point by screaming at a potential client across the table at Starbucks, you know what I mean. I’ve even worked at super-fancy coworking spaces in the past that were so loud I actually left and went to Starbucks.

One of the perks of high-end restaurants is that their owners have typically sunk more money into acoustics, so they’re inherently quieter spaces than coffeeshops. Every single location I’ve visited in the last couple weeks had the same thing in terms of sound: mellow background music and acoustic features that helped mask the conversations around me (and masked mine for others). While I probably wouldn’t have a meeting here about an upcoming funding round, for most talks, the spaces feel very private despite being so open.

The tech aspect of this system ensures it’s really easy to get in and out of the spaces. You can go to the company’s website or app to see location hours, busy spots versus quiet ones, and get updates on any closures or changes to locations. If a restaurant is closing early for a private event or closed entirely because of renovations, you’re notified via your app. Emails let you know of any changes with locations. For example, I recevied an email this morning telling me one location was closed due to flooding in the space. Sure, this is a pretty standard feature with any coworking situation, but it’s worth noting these companies aren’t shortchanging you on the online component just because they charge less.

I’ve used both traditional coworking spaces as well the restaurant-space concept, and find the latter to be more than enough when it comes to having workspace away from home. Then again, I get excited that some locations offer sparkling water, so if fancy amenities are a must or you really do need things like 24/7 and private phone booths to do your job, the restaurant option probably isn’t for you. And don’t expect much when you see “free snacks” advertised; said snacks will most likely be something like candied ginger.

Now, I realize NYC probably has many more options than the average city in terms of these spaces. But given the rising popularity of this concept, I wholeheartedly predict we’re soon going to see more restaurants put their daytime space to good use across America.