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Delivery is carrying the weight for many restaurants.

Tech CEO: We Feel for Restaurants Right Now

COVID-19 quickly ushered in a new era for operators.

Alex Canter isn’t your average tech guru. He’s a fourth-generation restaurateur whose family has clocked more than 85 years in the business.

Canter was raised in the kitchen of LA’s renowned Canter’s Deli. And it’s there Ordermark, a platform that allows operators to manage multiple third-party vendors from a single place, gains some of its inspiration from. All orders flow through a single printer and tablet; restaurants can access a universal menu feature to manage online offerings. Essentially, it enables restaurants to grow revenue and lower costs by deploying one, uniform menu to synchronize with every aggregator marketplace. Chains like Moe’s, Papa John’s, Buffalo Wild Wings, and Dairy Queen are on Ordermark’s platform.

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READ MORE: Should Your Restaurant Add Third-Party Delivery, or Start its Own Network?

Canter, a Forbes 30 Under 30 recipient in 2019, took some time to chat with FSR about how COVID-19 is disrupting the entire restaurant landscape right now, and where operators can begin trying to turn the tide.

From the ground level, what are you seeing?

It’s been an interesting situation. I’m honestly just more sad for restaurants right now. There’s so much disruption coming from this. So many layoffs. So many restaurants that are quickly trying to adapt. I feel for them right now. It’s hard.

At Canter’s, my family’s restaurant business here in LA, we just laid off more than half our staff. People who have been with us for 20, 30 years. It’s really hard.

We have one physical location and two ghost kitchens that are just delivery only covering different areas. The delivery-only ones are actually picking up right now.

What’s it been like trying to keep the physical store going?

Every hour is a new update. The mayor of LA recommended that restaurants either significantly reduce or close their dine-in operations (latest updates here), which has forced a lot of restaurants that are brick-and-mortar businesses to quickly pivot to a solely carryout/delivery only or curbside pickup kitchen. And the reality is curbside pickup is not really taking off.

We’re hoping more people will call in orders and come and pick up, but people are not even getting in their cars right now. Delivery is carrying the big weight right now. It’s hard to sustain an entire restaurant off solely the volume of delivery, however, especially if you’ve got a huge restaurant with big square footage and all the overhead. Restaurants are going to struggle to figure this out, especially those that don’t have program already in place.

Trying to change customer behavior, so quickly, seems like a pretty scary ordeal for a lot of restaurants.

I think something that a lot of restaurants are struggling with right now is how do they notify their own customers that they’re still open for delivery business. And I think everyone is kind of panicking trying to spread awareness that they’re still open for carryout and all that. I really do feel for them right now.

Ordermark

Alex Canter's family has been in the restaurant business for more than 85 years.

From Ordermark’s perspective, what have you all been doing to help? What have you seen first-hand?

We’ve definitely seen not just delivery volume picking up right now, but restaurants trying to quickly put together their delivery programs. So sign ups are increasing. We’re trying to make the biggest impact we can for restaurants right now. Our mission is to help restaurants adapt to changes in consumer behavior and this is an extreme situation where everyone is changing their behavior quite rapidly. I’m very glad we can help restaurants. We’ve gone ahead and waived our setup fees for all new sign ups. It’s no cost for restaurants to quickly implement. And we’re looking for other ways we can educate people. We’re hosting a series of webinars and inviting restaurants to join and talk about this. It’s really about trying to help understand what their options are. Educate more restaurants or what virtual restaurants are. They can quickly add incremental orders into their kitchen, which can be a great way for restaurants to supplement that loss in volume.

Where do ghost kitchens and virtual kitchens play a role here?

So I think there’s an important distinction between a ghost restaurant and a virtual restaurant. A ghost restaurant, in our opinion, is a restaurant that’s being operated out of a delivery-only facility. A shared kitchen space. A common-area kitchen. That’s a way to expand their delivery footprint with no overhead. But a virtual restaurant is just a brand that only exists on delivery and it can actually be fulfilled out of an existing brick-and-mortar business out the back door.

We’re seeing a lot of regular, physical restaurants turning on a digital brand. You can fulfill it out of the same kitchen, same staff. It’s a great way to drive an extra 10, 20, 30 orders an day—by layering in additional brands. Our technology actually enables restaurants to do that very easily. We aggregate all the different online ordering services. We can aggregate different brands in the same device as well. And we’ve enabled almost 1,000 restaurants across the country to be able to fulfill orders for different brands as well.

When people are calling, hoping to get started, what’s been their No. 1 concern or thing they’re worried about when setting up a delivery program from scratch?

I think there is a lot of questions; a lot of education that’s part of the learning curve of implementing a successful delivery program. And right now it’s happening at hyper speed. Usually when you’re rolling out delivery you can experiment, you can test out different variations of the menu, things like pricing. But unfortunately right now, a lot of restaurants that are shutting down their dining rooms are saying I need the orders now. And that doesn’t really give them ample time to prepare from an inventory standpoint or to understand what they need to do from a packaging standpoint. It’s kind of all of sudden and I think there’s a lot of fear based on the fact that they’re doubling down on something that’s unproven and untested. They don’t know how much staff to keep at hand to service a delivery-only business—something they’ve never done before.

There are a lot of restaurants that are more sophisticated and maybe had a bigger delivery program; it’s 20–30 percent revenue, sometimes more. I think it’s a lot easier for those restaurants to make this adjustment because they’re already used to high volume and they’re interested in getting more volume. When you’re going from physical to digital for the first time, the challenge is you have to think digital. There are a lot of old-school businesses that have never had to face this before. And we’re actually getting a good chunk of our sign-ups right now from restaurants that have never done delivery.

We’re doing our best to educate and come up with best practices, really just trying act more as consultants than ever before.

What do you think the restaurant industry will look like after COVID-19?

This will undoubtedly thin out the restaurant industry. There’s going to be restaurants that do not survive this storm. Especially in areas where delivery is not as feasible. More remote areas. Restaurants that are in shopping malls or airports or places where there’s no option for delivery. This will have an impact and there will be restaurants that close their doors permanently. We’re already seeing devastating layoffs across the industry, from waiters to back-of-house staff to busboys—everything that’s not tied to take-out.

The amount of people entering the unemployment pool at once is terrifying.

Is it realistic to think employees will come back?

Many people in the industry are not able to work a few months without collecting income, unfortunately. And they’re going to have to figure out a way to supplement income. They might get part-time jobs or work elsewhere. If this clears up quickly, there might be an opportunity for people to rejoin and go back to business as usual. But the longer it lasts the less likely that’s going to happen.

Personally, how long do you see this all lasting?

It’s really hard to tell right now how it’s going to play out. And I don’t know if the U.S. is prepared to take it as seriously as China. We’re very culturally different. And trying to stop people from leaving the house is not really as feasible here. So it’s still early days in this process. I know that the number of cases is definitely underreported right now because there’s not a lot of tests available and people are carrying it who are not showing symptoms yet. Everything that we’re seeing and is being reported is an underestimate of what the reality is. And that’s a scary thought.