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Restaurant Week Mania with GO TEXAN and The Leaning Pear on KGSR

30 September 2009 1,258 views 11 Comments

This morning, we chatted about all of the restaurant weeks going on this fall — including the GO TEXAN Resaurant Round-Up. We talked about all of the local restaurants participating including Carmelo’s, Eddie V’s, Kerbey Lane Cafe, Roaring Fork, TRIO, Meyer’s Elgin Smokehouse (Elgin), Cabernet Grill (Fredericksburg), and Royer’s Round Top (Round Top). GO TEXAN’s Round-Up runs through this Friday.

GO TEXAN and The Leaning Pear invited Bryan, Andy and I plus our significant others down to Wimberley a few weeks ago to sample their GO TEXAN menu. It was delicious and the owners — Matthew and Rachel — treated us so well. For more on The Leaning Pear and Wimberley, check out my blog post from the meal.

During the last segment, we also talked about something that has been bugging me. I love all of the restaurant weeks that are going on around town. It’s such a wonderful opportunity for us to support the local restaurants, chefs, vendors, farmers, and in some cases, non-profit organizations.

It’s really helpful when the event organizers and/or restaurants note how much of their proceeds (if any) are going to a non-profit. For example, I ate dinner at Carmelo’s last night and they note on their menu that $5 of every $35 tasting menu order goes to the food bank. Dining for Life, an annual fundraiser for AIDS Services of Austin, notes the percentage of proceeds each restaurant will donate — with a range from 10 – 20 percent. Of course, restaurants giving the higher percentages will hopefully draw the biggest crowds and the best positive buzz.

proceedsbenefitMy pet peeve? A press release that says: A portion of the proceeds will also benefit food banks. That is so vague and frustrating! Don’t we all want to know what businesses are giving back the most generously and who might be taking advantage of the good will being part of restaurant week provides?

I think this will take a grassroots effort. Consumers need to ask what percentage (or lump sum) is being given to a charity and charities or restaurant week organizers might consider posting more specific information about the donations either before or after the event.

By and large, restaurants are participating in these programs because they want to bring in more customers and also give back to the non-profit organizations and food banks in their own communities. Through incorporating more transparency in communications about restaurant week donations, we’ll reward those that are doing the right thing.

Below is audio clips from today’s radio show:

What are your thoughts about transparency in giving by restaurants and other local businesses?

  • http://flavorsofaustin.com Matt Swinney

    This is actually a perfectly reasonable question and, to be honest, I’m surprised people don’t ask it more often.

    So, I’ll provide transparency.

    Hopefully, most people reading this post have seen Launch787′s newest event “FLAVORS of Austin” (http://www.flavorsofaustin.com). Our concept is to feature one restaurant each week (Sunday through Wednesday) and a multi-course, discounted tasting menu. The hope is that people will take the opportunity to check out new restaurants or old favorites every single week and that we can answer the age-old question “Hey Honey…where do you want to go to dinner.”

    So, in our press releases, we’ve sent out the dreaded “A portion of proceeds will benefit the Sustainable Food Center of Austin.”

    I can’t speak for any other event in town, but I can speak for ours and why we market it that way (and yes, I’ll give you what we’re doing specifically).

    For us, we have three different pricing options for the restaurant that’s participating. Depending on which option the restaurant chooses, the amount we can donate to the SFC can change dramatically.

    Our agreement with the restaurant and with the SFC is that we will donate one-third of our fee (whatever that may be) to the SFC. Depending on the deal at the restaurant, that will end up being on average 5% of each meal. We’ve got some other deals in place (or that we’re working on) that could donate more depending on how those work out (for instance, it’s common to donate a portion of fees received from things like online reservations — that’s a whole different model that I don’t think it’s my place to get into — someone from Open Table or similar can comment on that).

    The reason we don’t publish that exact number is two-fold (though I’m giving it up here so I’m obviously not that worried about it). 1) Because each restaurant is different, officially it’s not set up as exactly 5% — it’s one-third of our fees — depending on our fee structure, that can change the exact percentage from each meal, so it’s complicated and incorrect to just say “5% will be donated.” And 2) most consumers think 5% doesn’t sound like much so there’s a marketing problem.

    I don’t think I need to explain item 1 any further but I might need to give more insight into item 2:

    5% is actually a lot. When you consider that most restaurants run on about a 15% margin, they’re also giving up about a third of their profit for 4 days straight. That’s a pretty big chunk, ESPECIALLY when the restaurant is doing a discounted menu. Also, to put 5% into perspective — if our financial projections are right, then after one year of FLAVORS, we will have donated somewhere between $35,000 and $60,000 to the SFC.

    I hope that at least starts to clear up the issue and that it helps at least a little in the transparency.

    Matt Swinney
    Owner, Launch787; FLAVORS of Austin
    matt@launch787.com

  • http://launch787.com/ Matt Swinney

    This is actually a perfectly reasonable question and, to be honest, I’m surprised people don’t ask it more often.

    So, I’ll provide transparency.

    Hopefully, most people reading this post have seen Launch787’s newest event “FLAVORS of Austin” (http://www.flavorsofaustin.com). Our concept is to feature one restaurant each week (Sunday through Wednesday) and a multi-course, discounted tasting menu. The hope is that people will take the opportunity to check out new restaurants or old favorites every single week and that we can answer the age-old question “Hey Honey…where do you want to go to dinner.”

    So, in our press releases, we’ve sent out the dreaded “A portion of proceeds will benefit the Sustainable Food Center of Austin.”

    I can’t speak for any other event in town, but I can speak for ours and why we market it that way (and yes, I’ll give you what we’re doing specifically).

    For us, we have three different pricing options for the restaurant that’s participating. Depending on which option the restaurant chooses, the amount we can donate to the SFC can change dramatically.

    Our agreement with the restaurant and with the SFC is that we will donate one-third of our fee (whatever that may be) to the SFC. Depending on the deal at the restaurant, that will end up being on average 5% of each meal. We’ve got some other deals in place (or that we’re working on) that could donate more depending on how those work out (for instance, it’s common to donate a portion of fees received from things like online reservations — that’s a whole different model that I don’t think it’s my place to get into — someone from Open Table or similar can comment on that).

    The reason we don’t publish that exact number is two-fold (though I’m giving it up here so I’m obviously not that worried about it). 1) Because each restaurant is different, officially it’s not set up as exactly 5% — it’s one-third of our fees — depending on our fee structure, that can change the exact percentage from each meal, so it’s complicated and incorrect to just say “5% will be donated.” And 2) most consumers think 5% doesn’t sound like much so there’s a marketing problem.

    I don’t think I need to explain item 1 any further but I might need to give more insight into item 2:

    5% is actually a lot. When you consider that most restaurants run on about a 15% margin, they’re also giving up about a third of their profit for 4 days straight. That’s a pretty big chunk, ESPECIALLY when the restaurant is doing a discounted menu. Also, to put 5% into perspective — if our financial projections are right, then after one year of FLAVORS, we will have donated somewhere between $35,000 and $60,000 to the SFC.

    I hope that at least starts to clear up the issue and that it helps at least a little in the transparency.

    Matt Swinney
    Owner, Launch787; FLAVORS of Austin
    matt@launch787.com

  • jodibart

    Thanks for your perspective and for sharing, Matt. I'm not sure I understand exactly how your fee structure works and I agree that 5% doesn't sound very substantial or generous to me and probably not to the average consumer.

    To me it would seem this means that the restaurants who are giving 10-20% of their proceeds during AIDS Services of Austin Dining for Life are thinking beyond a program like this as a marketing cost and want to make a real difference.

  • cakeaustin

    SFC is so grateful to have a partner like you, Matt. What we hope the community understands, in addition to that which you've thoughtfully laid out above, is that FLAVORS is a first-of-its-kind initiative in Austin – and that by featuring one restaurant a week throughout the year, you increase the potential not only for funds raised to fulfill SFC's mission, but to raise awareness and encourage diners to get involved. In addition, many of the restaurants participating in FLAVORS are already actively aligned with SFC's work – from procuring at Austin Farmers' Market to participating in our annual fundraiser, Farm to Plate at Barr Mansion.

    We thank our amazing local bloggers for asking to “pop the hood” on restaurant partnerships in general, and look forward to seeing you out enjoying FLAVORS throughout its inaugural year! Anyone up for Satay, by the way, Oct. 11-14?

    Susan Leibrock
    Community Relations Director, SFC

  • Matt Swinney

    Susan, thank you for the kind words. You guys are incredibly great to work with.

    Jodi,

    While I don't blame you, your comment about “5% doesn't sound very substantial” is exactly why event promoters don't lift up the hood publicly. In reality, you're damned if you do, damned if you don't.

    I'm not arguing that the Dining for Life event isn't a great model for them. That's great that restaurants are willing to give up that kind of donation and more power to them and to AIDS Services of Austin.

    Having said that, that's the abnormal model. The part that's not clear here is that AIDS Services of Austin does all the work themselves (I'm assuming). They use up incredibly valuable man-hours and that's essentially their “job” for the lead up and during Dining For Life.

    We're not a non-profit. We don't claim to be. We support a non-profit and there has to be a clear delineation there. WE use up the man-hours, SFC isn't asked to do that. WE secure the restaurants, WE manage the marketing, WE pay for it if there's a loss. In our model, the SFC (or any non-profit) is simply benefitting from us trying to create a profitable venture. Do we get something out of it? Sure. We get the ability to say “we're supporting the SFC” and we get the warm-fuzzy out of seeing what our donations can do.

    I don't want to get into what our financial model is, but suffice it to say that it's a win all the way around: consumers get a great deal at a fun restaurant, the restaurant gets great bang for their marketing buck and pulls in some traffic when they desperately need it, the SFC gets a nice donation without having to put significant time, effort or money into it and, yes, we turn a little profit. I will say one thing: the FLAVORS of Austin model puts risk on exactly one of those 4 groups: US. That's it. We have hard cost and no one else really does.

    One other thing I'd like to point out is that most restaurants statistically run at a 15% – 20% margin. So, for them to give up 15% – 20% of their gross sales during a time period is asking them to break-even. For some restaurants, even that's not a realistic option. I love Dining for Life and I'll continually support it (FLAVORS is not meant to compete with it at all), but it's taken them years to gain enough traction to ensure they can get enough restaurants involved to generate buzz and enough money to make it worth it.

    We can provide that almost instantly to take a lot of that risk away. Media partners, bloggers like yourself, others in the community for whatever reason listen to what we have to say, so it means that restaurants feel more comfortable about what they're giving up and the SFC knows it's not going to get hurt financially. When a non-profit goes out and does it themselves, they take a high level of risk. Yes, the reward is better in the long-term, but they may not have the ability to take that up-front hit. We're doing that for the SFC.

    Finally, (I don't want this to sound like spilled milk or anything) it's tough as an event promoter to get called out on “portion of proceeds.” At the end of the day, we don't HAVE to do anything for a non-profit. We choose to. In my case, we choose to with every single event we do. Sometimes we do it without even telling the public. The original comments made in your first post are valid questions, BUT what I caution you against is this: if the SFC (or any other non-profit) felt like they were getting “used” so someone else could make money and it wasn't a good deal for them, they wouldn't do it. I can't attach their name and logo to anything without their permission legally, so you can rest-assured that they're ok with the deal we've offered them.

    I do think there's this misconception that the only people that make money during an event are the producers or promoters. It's simply untrue. You can look at my bank account to prove it! Yes, a lot of money can be made during an event. A lot. A lot of money can also be lost during an event by forces you can't control. A lot. The trick it to mitigate that risk by putting great partners around you that in turn help ensure success. I'll gladly share the wealth of a successful event if it means I have a great partner like the SFC involved. They help me mitigate that risk and the by-product is that we can provide a better product for the end consumer. Everyone wins.

  • Matt Swinney

    Matt — These are ALL good points. Thank you so much for responding and giving your feedback and it all makes a lot of sense. I understand the delicate balance you are trying to keep. While as a consumer and a very curious person, I'd be interested to know how much is generated for SFC by each restaurant during each week but can see why that is also something that you wouldn't want to do so as not to alienate any of your restaurant partners. I'm glad that you are bringing another unique restaurant week to town and think it's a really nice promotional opportunity for restaurants.

  • jodibart

    Matt — These are ALL good points. Thank you so much for responding and giving your feedback and it all makes a lot of sense. I understand the delicate balance you are trying to keep. While as a consumer and a very curious person, I'd be interested to know how much is generated for SFC by each restaurant during each week but can see why that is also something that you wouldn't want to do so as not to alienate any of your restaurant partners. I'm glad that you are bringing another unique restaurant week to town and think it's a really nice promotional opportunity for restaurants.

  • Matt Swinney

    Susan, thank you for the kind words. You guys are incredibly great to work with.

    Jodi,

    While I don't blame you, your comment about “5% doesn't sound very substantial” is exactly why event promoters don't lift up the hood publicly. In reality, you're damned if you do, damned if you don't.

    I'm not arguing that the Dining for Life event isn't a great model for them. That's great that restaurants are willing to give up that kind of donation and more power to them and to AIDS Services of Austin.

    Having said that, that's the abnormal model. The part that's not clear here is that AIDS Services of Austin does all the work themselves (I'm assuming). They use up incredibly valuable man-hours and that's essentially their “job” for the lead up and during Dining For Life.

    We're not a non-profit. We don't claim to be. We support a non-profit and there has to be a clear delineation there. WE use up the man-hours, SFC isn't asked to do that. WE secure the restaurants, WE manage the marketing, WE pay for it if there's a loss. In our model, the SFC (or any non-profit) is simply benefitting from us trying to create a profitable venture. Do we get something out of it? Sure. We get the ability to say “we're supporting the SFC” and we get the warm-fuzzy out of seeing what our donations can do.

    I don't want to get into what our financial model is, but suffice it to say that it's a win all the way around: consumers get a great deal at a fun restaurant, the restaurant gets great bang for their marketing buck and pulls in some traffic when they desperately need it, the SFC gets a nice donation without having to put significant time, effort or money into it and, yes, we turn a little profit. I will say one thing: the FLAVORS of Austin model puts risk on exactly one of those 4 groups: US. That's it. We have hard cost and no one else really does.

    One other thing I'd like to point out is that most restaurants statistically run at a 15% – 20% margin. So, for them to give up 15% – 20% of their gross sales during a time period is asking them to break-even. For some restaurants, even that's not a realistic option. I love Dining for Life and I'll continually support it (FLAVORS is not meant to compete with it at all), but it's taken them years to gain enough traction to ensure they can get enough restaurants involved to generate buzz and enough money to make it worth it.

    We can provide that almost instantly to take a lot of that risk away. Media partners, bloggers like yourself, others in the community for whatever reason listen to what we have to say, so it means that restaurants feel more comfortable about what they're giving up and the SFC knows it's not going to get hurt financially. When a non-profit goes out and does it themselves, they take a high level of risk. Yes, the reward is better in the long-term, but they may not have the ability to take that up-front hit. We're doing that for the SFC.

    Finally, (I don't want this to sound like spilled milk or anything) it's tough as an event promoter to get called out on “portion of proceeds.” At the end of the day, we don't HAVE to do anything for a non-profit. We choose to. In my case, we choose to with every single event we do. Sometimes we do it without even telling the public. The original comments made in your first post are valid questions, BUT what I caution you against is this: if the SFC (or any other non-profit) felt like they were getting “used” so someone else could make money and it wasn't a good deal for them, they wouldn't do it. I can't attach their name and logo to anything without their permission legally, so you can rest-assured that they're ok with the deal we've offered them.

    I do think there's this misconception that the only people that make money during an event are the producers or promoters. It's simply untrue. You can look at my bank account to prove it! Yes, a lot of money can be made during an event. A lot. A lot of money can also be lost during an event by forces you can't control. A lot. The trick it to mitigate that risk by putting great partners around you that in turn help ensure success. I'll gladly share the wealth of a successful event if it means I have a great partner like the SFC involved. They help me mitigate that risk and the by-product is that we can provide a better product for the end consumer. Everyone wins.

  • jodibart

    Matt — These are ALL good points. Thank you so much for responding and giving your feedback and it all makes a lot of sense. I understand the delicate balance you are trying to keep. While as a consumer and a very curious person, I'd be interested to know how much is generated for SFC by each restaurant during each week but can see why that is also something that you wouldn't want to do so as not to alienate any of your restaurant partners. I'm glad that you are bringing another unique restaurant week to town and think it's a really nice promotional opportunity for restaurants.

  • Matt Swinney

    Susan, thank you for the kind words. You guys are incredibly great to work with.

    Jodi,

    While I don't blame you, your comment about “5% doesn't sound very substantial” is exactly why event promoters don't lift up the hood publicly. In reality, you're damned if you do, damned if you don't.

    I'm not arguing that the Dining for Life event isn't a great model for them. That's great that restaurants are willing to give up that kind of donation and more power to them and to AIDS Services of Austin.

    Having said that, that's the abnormal model. The part that's not clear here is that AIDS Services of Austin does all the work themselves (I'm assuming). They use up incredibly valuable man-hours and that's essentially their “job” for the lead up and during Dining For Life.

    We're not a non-profit. We don't claim to be. We support a non-profit and there has to be a clear delineation there. WE use up the man-hours, SFC isn't asked to do that. WE secure the restaurants, WE manage the marketing, WE pay for it if there's a loss. In our model, the SFC (or any non-profit) is simply benefitting from us trying to create a profitable venture. Do we get something out of it? Sure. We get the ability to say “we're supporting the SFC” and we get the warm-fuzzy out of seeing what our donations can do.

    I don't want to get into what our financial model is, but suffice it to say that it's a win all the way around: consumers get a great deal at a fun restaurant, the restaurant gets great bang for their marketing buck and pulls in some traffic when they desperately need it, the SFC gets a nice donation without having to put significant time, effort or money into it and, yes, we turn a little profit. I will say one thing: the FLAVORS of Austin model puts risk on exactly one of those 4 groups: US. That's it. We have hard cost and no one else really does.

    One other thing I'd like to point out is that most restaurants statistically run at a 15% – 20% margin. So, for them to give up 15% – 20% of their gross sales during a time period is asking them to break-even. For some restaurants, even that's not a realistic option. I love Dining for Life and I'll continually support it (FLAVORS is not meant to compete with it at all), but it's taken them years to gain enough traction to ensure they can get enough restaurants involved to generate buzz and enough money to make it worth it.

    We can provide that almost instantly to take a lot of that risk away. Media partners, bloggers like yourself, others in the community for whatever reason listen to what we have to say, so it means that restaurants feel more comfortable about what they're giving up and the SFC knows it's not going to get hurt financially. When a non-profit goes out and does it themselves, they take a high level of risk. Yes, the reward is better in the long-term, but they may not have the ability to take that up-front hit. We're doing that for the SFC.

    Finally, (I don't want this to sound like spilled milk or anything) it's tough as an event promoter to get called out on “portion of proceeds.” At the end of the day, we don't HAVE to do anything for a non-profit. We choose to. In my case, we choose to with every single event we do. Sometimes we do it without even telling the public. The original comments made in your first post are valid questions, BUT what I caution you against is this: if the SFC (or any other non-profit) felt like they were getting “used” so someone else could make money and it wasn't a good deal for them, they wouldn't do it. I can't attach their name and logo to anything without their permission legally, so you can rest-assured that they're ok with the deal we've offered them.

    I do think there's this misconception that the only people that make money during an event are the producers or promoters. It's simply untrue. You can look at my bank account to prove it! Yes, a lot of money can be made during an event. A lot. A lot of money can also be lost during an event by forces you can't control. A lot. The trick it to mitigate that risk by putting great partners around you that in turn help ensure success. I'll gladly share the wealth of a successful event if it means I have a great partner like the SFC involved. They help me mitigate that risk and the by-product is that we can provide a better product for the end consumer. Everyone wins.

  • jodibart

    Matt — These are ALL good points. Thank you so much for responding and giving your feedback and it all makes a lot of sense. I understand the delicate balance you are trying to keep. While as a consumer and a very curious person, I'd be interested to know how much is generated for SFC by each restaurant during each week but can see why that is also something that you wouldn't want to do so as not to alienate any of your restaurant partners. I'm glad that you are bringing another unique restaurant week to town and think it's a really nice promotional opportunity for restaurants.