Every now and then, a forward-thinking company comes up with a new idea in an industry that already seems saturated.
These are markets where everything has “already been done before” — that is, until an innovation transforms what was the status quo.
Such is the story of Perk Labs Inc. (CSE: PERK), a hospitality tech operation that aims to enhance the entire hospitality industry, starting with restaurants, through its ordering software and digital franchising.
There is a wealth of opportunity in the restaurant Industry, which is one of the largest Industries in Canada, with $58 billion in annual sales, according to data from Restaurants Canada, and $700 billion in annual sales in the US, according to the National Restaurant Association.
The company’s fully integrated product built for cafes, bars, pubs, restaurants, and hotels, allowing customers to pay for their food with a QR code. Perk Labs is the owner of Perk Hero, an all-in-one mobile payment and digital loyalty management platform that enables merchants to provide their customers with pre-order and pick-up capabilities, secure contactless payments, and digital rewards.
Engaged in operating as a digital franchisor in which franchisees can sell restaurant ordering software coupled with digital rewards on every purchase made the Company’s mission is to provide restaurateurs with friendly and reliable digital ordering, payment, and loyalty tools to help them survive and thrive in a difficult economic environment.
PPerk Hero’s Digital Dine-in solution was recently endorsed by the British Columbia Restaurant and Foodservices Association (BCRFA) and BC’s Alliance of Beverage Licensees (ABLE BC) to assist overworked restaurant and pub teams manage order flow and keep service levels up during and after the ongoing labour shortage.
The genesis of an idea:
It was 2021 and the COVID-19 pandemic was plaguing the globe, upending the restaurant and hospitality business around the world. It was time to change their regular methods of operation.
To adapt to this rapidly changing environment, the Perk Labs team had developed a way (based on an established platform) for customers to pay their restaurant bills through a simple QR code rather than exchanging payment methods with a server.
In an interview with Stockhouse Editorial, Perk CEO, Jonathan Hoyles explained that when the COVID 19 pandemic hit, the company saw that payments stopped in restaurants overnight once they closed operations, then they introduced a new ordering service.
“Initially you could pre-order and pickup, and then we also introduced self-managed delivery. We thought there was an opportunity there at the beginning for restaurants that were sensitive to the fees charged by Uber Eats and SkipTheDishes.
QR codes placed on restaurant tables allow customers to order and pay for their food. The adoption rate for similar technologies in other countries such as China has been impeccably high, and it made sense to grow this business in North America, especially as consumers have now become more familiar with QR Codes. From this seed of an idea, Perk Hero was born.
Instead of taking tedious minutes to order and pay for your food, customers can scan a QR code, order, and checkout in less than 15 seconds. All you have to do is scan a QR code, order, pay, and walk away – no app download required, your order and payment can be made right from your smartphone browser.
This means that restaurateurs can now focus even more on what matters most to their business, cooking food, delivering satisfying experiences, and continuing to grow their businesses.
The franchise model: SaaS – Monthly subscription package for restaurants:
The digital franchising program business model under Perk Labs is quite a unique angle. For most software companies, a franchising model isn’t something they usually choose. Part of the reason for that has to do with the way that software companies are funded; typically, through venture capital funds, and they don’t gravitate toward the franchise model as much, as they don’t want to share any of the revenue opportunities within a franchising model. As CEO Hoyles explained, those companies are more about the “centralized model”.
“With our franchising model, we grant the franchisee an exclusive territory, and then all the restaurants in that territory, essentially those opportunities belong to them. When a restaurant signs up at our standard package of $99 per month, they’re going to get 70% of that revenue. We see this as a way that allows us to scale more quickly, so we can more quickly sign-up franchisees, provide them with training, and really it’s a win-win-win business model with the restaurants, the franchisees, and for us. That’s how we plan to grow in North America.”
The business at a glance:
In mid-April 2022, Perk Labs provided an update on its commercial opportunities and expanded product offerings.
CEO Hoyles sat down with Shoran Devi to highlight the updates.
“We are seeing significant demand for both our franchise program and restaurant offering. Never before in the history of our company have we been so well positioned in terms of our product offering and market opportunity. With the recent launch of our new products and features, I believe we are poised to ride the wave of digital adoption by small-to-midsize businesses of ordering and payment services and a surge of individuals seeking a digital business that can be operated from home.”
Digital Franchise Program: At the Toronto Franchise Canada Show, Perk was one of the most popular exhibitors and the company developed 60 franchise leads.
Chain Restaurant Opportunities: As part of the company’s growth strategy the plan is to pursue small-to-midsize restaurant chains and progressively pursue larger chains. Perk has several chains in its sales pipeline interested in its Order-from-Table product offering.
Custom Branded Restaurant Mobile Apps: Perk Labs has seen significant demand from restaurants for custom branded apps and have several small-to-midsize restaurant chains interested in engaging the company to build custom-branded apps.
Downloadable Merchant App: Perk Hero’s new downloadable merchant app is available in the Apple App andGoogle Play Stores, allowing for scalable growth and fast customer acquisition.
Digital loyalty management platform
The company’s Perk Hero platform enables merchants to provide their customers with digital rewards and a more engaging and convenient customer experience.
The loyalty point system works so that every time someone makes a purchase or payment, they are earning points. The company also introduced perks, its own loyalty reward cryptocurrency, where users can convert their points into the company’s cryptocurrency. One of the company’s plans for perks is the ability to buy NFTs, which is still in the development stages.
Canada Digital Adoption Program:
The Government of Canada recently deployed its $4 billion Canada Digital Adoption Program (CDAP) to help Canadian small and medium-sized businesses (SMEs), including restaurants, grow their online presence and upgrade or adopt digital technologies.
Funding under the CDAP consists of $1.4 billion in grants and advisory services to SMEs and up to $2.6 billion in loans from the Business Development Bank of Canada (BDC) to help cover the cost of implementing digital transformation plans.
CEO Hoyles noted in the release on this news that while many industries were affected by the COVID-19 pandemic, the effects on the restaurant and hospitality industries were particularly devastating.
“Now the restaurant industry faces new challenges: food price increases, increased labour costs and labour shortages […] We believe that the future of dining is digital and it is encouraging to see the Government provide support as restaurants are struggling to bounce back from the pandemic.”
Perk is planning to reach out to Canadian restaurants, coinciding with the launch of CDAP, to inform them of its benefits and adoption of digital tools such as Perk’s new QR code web order-from-table tool that helps restaurants streamline their business and save costs.
From new franchises and restaurants, point of sale (POS) updates, the second half of 2022 looks to be as busy as the first half for Perk Labs’ team. CEO Hoyles explained that as they work on integrations with POS systems, they work with restaurants on this integration, providing them a with a tablet. Much the same as how Uber Eats (NYSE: UBER) or SkipTheDishes (XAMS: TKWY) operates in that, when an order comes in, it comes in through the tablet.
“Basically, every order that comes in for a restaurant, a staff member also needs to input it into their point of sale. ’Once we have the POS integrations completed, there will be no requirements for the double entry. Essentially when the order comes in, and if it’s integrated with the POS, it will just automatically be entered into the POS integrating both the ordering and the payment. Then everything flows through. That should open up a world of opportunities for us, because that is often an obstacle for a restaurant, that they’ll say they would love to have this, but they can’t do it unless it’s integrated with their own POS.”
The company recently closed a non-brokered private placement, where subscribers purchased 7,672,138 Units for aggregate gross proceeds of $322,230.72.. Proceeds will be used for marketing and awareness campaigns and for general working capital purposes.
Meet the team:
Although he studied business and computer science in his undergraduate studies, CEO Hoyles began his professional journey as a lawyer, mostly advising on mergers and acquisitions, as well as finance, both for public companies and for private equity. After working at two of the biggest law firms in Canada, he migrated to a family office who owned Speedy Auto Glass, and Novus Glass, as well as being significant shareholders of a public company Glentel, the company that owned Wireless Wave and has since been acquired by Rogers Communications Inc. (TSX: RCI).
He continued that from there, as the company he worked with started making more investments into technology companies, and during that time, he finished his executive MBA at Queens University in Ottawa and became more involved in the operations and turnaround of the glass business, which was also a franchisor. This was where he gained his experience in franchising, with roughly 250 glass franchisees in the United States, and international franchise operations in close to 20 countries on top of that.
“Even though my background was in securities, M&A, and private equity, I really got to learn how a franchising system works from working there. That has also been part of the inspiration for us to go with the digital franchising model. I saw how powerful franchising is in terms of being able to scale it up and grow and be able to license it out internationally. From there, we started making investments in other companies, including FinTech companies. I also personally became more and more interested and invested in cryptocurrency. That was what led me to join the company as inhouse legal counsel initially at Glance Technologies, which became Perk Labs. The plan was to be the first public company doing an initial coin offering in 2017.”
This is a story that illustrates the fact that discipline, consistency, and determination are critical if a company wants to enact true change and innovate in their space.
Perk Hero has now taken off in the hospitality industry. Ordering and paying for your food, which used to be a tedious process, has been simplified and condensed into a process that only takes a few seconds.
The big opportunity for this company is that it has developed the means to solve a serious problem for restaurants. There is a government grant that will cover the costs. That serves as a major driver for this company’s success, and success for its shareholders.
Overall, this is a story of innovation coming from a difficult and seemingly impossible situation. The founders adapted, discovered a solution, and then built a service that businesses all over the world could use to speed up their payment process.
For the latest updates on the company, visit perklabs.io.
FULL DISCLOSURE: This is a paid article produced by The Market Herald.