Restaurant-Owned Delivery Co-Operatives
Mission: To create a sustainablesolution for restaurant’s third-partydelivery and catering needs.
Vision: To enable restaurants to control the entire process of delivering their products to their customers.
We recognized the predatory nature of the Silicon Valley VC-funded delivery companies that:
● charge unsustainable prices
● steal customer information
● provide substandard service.
We started CHOMP (Iowa City) and NoCo Nosh (Ft. Collins) as cooperatives owned by the restaurants themselves, who then benefit by paying much lower commissions, providing far better customer service, securing their customer data and potentially receiving a return on their investment.
● Consistent methods of operation
● Policies and procedures that ensure high quality customer service
● Initial hands-on training at its Iowa headquarters
● Local on-site training and support during each franchisee’s initial start-up
● Ongoing training and support to ensure the quality of its franchise units
● Coordinated marketing support
● IT and back office support
● The only delivery service that follows a cooperative model, giving restaurants equity opportunities and a share of profits
● Co-op commissions are roughly half those paid by restaurants to national delivery services
● Significantly improved service levels by treating delivery as an extension of the restaurant
● Regain restaurant control of customer data
● Co-op LLCs are structured to prevent acquisition
● Proven successful model in two markets and ready to scale
CHOMP brought the IOWA City Market sensible commission structures, local customer service by people I know personally, great technical support with building a menu, control of customer data, marketing and – the best – profit distribution to shareholders.
When the Covid-19 pandemic hit the Iowa City market and all restaurants moved to pickup/delivery, CHOMP came to the rescue and was helping to prevent a total collapse of the local industry. We got a share of delivery profits, and these went up to the point that distributions were done every couple of weeks. An investment of $2.5K brought in distributions of more than $10K.” – Naftaly Stramer
CHOMP Iowa City shareholder
Co-owner, Oasis Falafel
● Utilize local bank, payroll, and accounting services
● Utilize local employees
● In Iowa City, CHOMP has kept $400K in the community through reduced costs. Omaha is projected to save $2M and Atlanta roughly $13M.
● The co-op would actively promote local independent brands versus the national folks that push their national partners at the local level.
● Far more attention to customer service due to local customer service staff
● More versatile approach to service recovery. National brands cancel/refund orders without informing restaurant. CHOMP will do reorders which is normally preferable to the customer.
There are significant international franchise development opportunities in selected overseas markets where delivery dynamics are similar to the USA model.
We have completed due diligence in Asia Pacific and Latin America and are confident the delivery co-op model will be well accepted in Japan, Singapore, Australia, Canada & Mexico to start.
We are working with a group of experienced former international executives from YUM and McDonald’s who have extensive relationships with potential local partners in these markets.
● $2 million raise for 20% equity
● $8 million pre-money valuation
● $10 million post-money valuation
LOCO FRANCHISEE INVESTMENT SUMMARY
Franchise Fee: $50,000
Initial Investment: $90,000
Working Capital: $75,000
Total Investment: $215,000
● Technology Investments – $400,000
● Management & Field Staff – $800,000
● Retire Bridge Loans – $100,000
● Working Capital – $700,000
The leadership team seeks to get LoCo to approximately $5.8M in total top line revenue and over $2.6M in EBITDA by 2023 with the current plan it has in place. The team expects to get operating leverage at the company wide level from both the management team as well as rapid growth of the franchise. The leadership team anticipates that this would put LoCo in a strong position for a purchase or recapitalization by either a financial buyer or strategic acquirer. This would be the first potential exit for early shareholders. We are open for other opportunities for exit strategies from interested investors.
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