Three Very Different Yet Successful Restaurant Campaigns
Opening a restaurant, like any business, is not a decision to take lightly. You have to factor in location, competition and what is going to make your restaurant a winner. Franchising a chain is one thing, but taking your own specialty dishes and/or ideas to the market requires passion, guts and an unwavering self-confidence.
And capital. You will definitely need capital, too.
Raising capital for some chefs and restaurateurs won’t be as difficult if they worked for famous chefs and have connections. As for the other 98% of chefs and restaurateurs, that $100,000 – $1,000,000 may be a little harder to come by. Enter the power of crowdfunding.
There have been many crowdfunding success stories over the years for restaurants, diners, food trucks, you name it. The key to a successful crowdfunding campaign is selling equity for something people love and have an appetite for (sorry). Most people love food and a subgroup of this culture is absolutely crazy about food. The popularity of TV shows featuring chef competitions and famous chefs visiting random restaurants has inspired a new generation of foodies. The industry is hot and many food professionals are taking advantage.
We searched the internet and found three delectable restaurant crowdfunding success stories to share with you. Feel free to pour a nice glass of wine as you read – both red and white will pair nicely with the content.
Commonwealth – Boston, MA Restaurant Crowdfunding Success Story
When Steve “Nookie” Postal had dreams of opening his restaurant-market hybrid Commonwealth in Cambridge, Massachusetts, he knew he would need a small source of supplemental capital. In August 2013 he started a crowdfunding campaign with a target of $50,000 that would be used to purchase kitchen equipment, install shelving and acquire start-up inventory.
Much to his delight, Postal surpassed his target and eventually raised $70,000 from 220 backers. The $50K was only a small portion of the $2 million he needed overall, but it allowed him to stay on course accomplish his goals. Postal is now a huge advocate of crowdfunding for restaurants and shared his thoughts with FSR Magazine:
“A lot of people want to pitch in to something they believe in or show their support, but can’t write the big checks. Crowdfunding gives them that chance and is a win-win for all involved. Restaurants are getting more expensive to open and you can only charge customers so much to make up the difference. With that, I only see crowdfunding growing.”
Prequel – Washington D.C. Restaurant Crowdfunding Success Story
Prequel, a new restaurant concept, is not just another restaurant crowdfunding success story – it is also the first ever equity crowdfunding offer in Washington D.C. In fact, Prequel raised $220,100 from 339 investors surpassing the original goal of $200,000. The grand opening is slated for April 2015.
So what is this up-and-coming restaurant concept? Prequel is a 17,000 square foot space that will feature “pop up” restaurants with cuisine from the hottest chef’s in the DC, Virginia and Maryland region. The concept is to have up to five concurrent concepts at any given time and change them accordingly. As for investors, they will receive up to 50% of returnable cash flow until the initial capital invested is repaid with 10% of returnable cash flow being returned on a prorated basis after the opening event. Investors will also enjoy perks including priority reservations and free drinks and food.
The owners of Prequel offered this statement:
“Our goal is to have up to 500 investors in Prequel because we know that those investors will frequently visit, invite their friends and become brand evangelists for Prequel. Investors will receive 50% of distributable cash flow (profits) until their initial capital is returned. After that time, they will receive 10% of the distributable cash flow. Beyond the financial return, the Prequel investment provides to you, as owner, benefits such as priority reservations, invitations to the launch party, free beverages, and the management knowing who you are every time you come in.”
Loco’l – California Restaurant Crowdfunding Success Story
At truCrowd Texas we always appreciate a creative and witty company name (we are quite proud of our own) so Loco’l certainly earns a tip of the hat. And much like any company name with pizzazz, there is some real substance to the business as well.
Chef and business partners Roy Choi and Daniel Patterson setup a crowdfunding campaign in January to fund Loco’l fast food locations in California. The Loco’l concept is to provide people in “food deserts” or underserved areas an alternative to unhealthy fast food chains. The Loco’l locations will serve fresh, delicious foods at low prices to give everyone an opportunity to eat healthy. The best news about this revolutionary and kindhearted idea? It raised $104,000 of its $100,000 goal.
Here is Chef Roy Choi on his vision for the project:
“You wouldn’t want record execs making the music, right? That’s what musicians do. But right now, cooks aren’t designing the food that most people are eating. The suits are. Let’s get back to chefs making the food and the moral choices for the people. Let’s get in and cook.”
Please visit the Loco’l campaign page for more quality information.
If there is one market you can count on being around forever, it’s food. People love to eat and actually have to eat to stay alive. Crowdfunding allows chefs and restaurateurs to make their dreams a reality and supports businesses that would have no chance otherwise. Variety is the spice of life and thanks to these crowdfunding success stories we all have a spicier menu to choose from!
Thank you for reading and please leave your questions and comments below!