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Happy Saturday, and I hope you had a great week!
I hear often that Thursdays are the new summer Fridays and how everyone leaves New York City on Thursday afternoons (or even Wednesdays after work) to get a jump on their weekend. With working remotely still being very much in vogue (unless you’re working at JPMorgan, Goldman Sachs, Citigroup, or General Motors), it seems Thursday nights in NYC are a little quieter than I remember from my more youthful days & nights (JB: is the City that never sleeps getting a little sleepy?).
Well, whether the above is true or just an observation of mine, this week on Thursday evening, our friends from FTW Ventures and Human Ventures hosted Hospitality x Tech an evening of cocktails and conversations over at Casa Komos and the event was yet another strong reminder than nothing beats being in-person when it comes to connecting with people. With that in mind, I want to thank Robt Wilder, Brian Frank, Heather Hartnett, Joe Marchese, along with Mark the bartender (who had a heavy hand) for a wonderful evening.
At the event, which was a hospitality + technology centric gathering, one comment that stood out to me was from a gentleman from the investment community that said he doesn’t invest in restaurants or ResTech b/c they’re too risky. ”90% of restaurants fail in the first year,” he said and that’s just not an asset class he can get behind.
The “90% of restaurants fail in the first year” line is an urban myth that’s been repeated so many times that it feels true, but it’s not and while the comment I’m sharing shouldn’t remotely reflect on the industry experts that gathered on Thursday night (I’m going to assume he was a guest of a guest), the comment reminded me of the false narrative around our industry and the false sense of familiarity that uniquely surrounds the business of restaurants.
First, let’s dispel this urban myth and while the US restaurant industry certainly carries its fair share of risks, the failure rate in the first year is 17%. For a little context, this failure rate is comparable to other small-business survival rates including, but not limited to fitness studios & gyms, salons & spas, retail stores (especially apparel, gift shops, and specialty goods), independent trucking & transportation, event planning & catering and small-scale manufacturing companies.
Each of the above “other” industries with comparable first year fail rates have similarities to restaurants. Each play in a domain with fierce competition, thin margins, customer acquisition pressures (loyalty can be thin) and are vulnerable to external shocks (seasonality, shifts in consumer trends, economic downturns or maybe even tariffs! Whoops, I didn’t mean to go there…or…maybe I did). 😊
My overarching point, yes, we’re a risky industry, but we’re not dissimilar to many other small-business companies and according to the National Restaurant Association, the restaurant industry could reach $1.5 TRILLION in sales in 2025 (which would exceed last year’s sales number and current high watermark).
I could hammer home the point that I don’t know another $1.5 TRILLION dollar industry that’s as antiquated and analogue as the restaurant industry and that such creates the need and opportunity for the embracement of technology, but that’s NOT the theme of this week’s H^2, so I won’t go there (but I did want to at least get that point in here).
No, my theme this week is about the false sense of familiarity that surrounds the restaurant industry, and the projecting by guests and specifically ones that have never worked in the industry, about what the industry needs or what it takes to own / operate a restaurant. There’s an overall perception that b/c the backdrop of restaurants is food and beverages, that it must be fun. Well, on that point, of course it can be fun and there are moments of great joy, but as a unique business where the manufacturing facility (back of house) and the retail component (front of house) are separated by only a wall (and sometimes, as a result of the popularity of open kitchens, not even a wall, the perception of the industry is just that and not the reality.
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For some time now, I’ve run the risk of expressing how different this industry is from others (and I recognize that there are graveyards full of tombstones with the words “it’s different this time” when it comes to investing)
There’s never guest-bashing here in the H^2 (we do that after the guests leave) but for the guest, experiencing restaurants is pure consumption and unlike other consumer-facing businesses, our guests aren’t just buying a product, they’re buying an experience. This is also uniquely an experience that happens in a shared and community-oriented physical environment. How many times have you heard (or maybe even said) this is “my table” or “my seat” in a space that doesn’t belong to you. These are NOT complaints and to the contrary, there exists a unique relationship that allows the guest to feel that the space is in fact there’s to enjoy. This is a key factoid in how restaurants compete with one another to win business and loyalty.
Meals are personal and to a certain extent, there’s intimacy that comes with a dining experience, so of course the guest wants to have the meal their way b/c food preferences are deeply personal.
If you takeaway one thing from this week’s Top of the Fold, it’s that the business of restaurants or maybe the opportunity to be successful in the restaurant industry is based on a high emotional bar. In other industries, the experience is more transactional and while all businesses can elevate their game by embracing hospitality or even unreasonable hospitality (I’m paying attention Mr. Will Guidara 😊), the expectation by customers is different than the expectations and specifically accommodations that comes from guests.
If you take away a second thing from this week’s Top of the Fold, it’s that I used the word “unique” 4 times (or 5 times if you include this sentence).
Bottom line, there are few industries that create such a powerful blend of personal connection, public visibility, and emotional investment for customers (and it’s so different, we don’t call them customers, we call them guests).
So, restaurant owners & operators, yes, our guests feel a sense of familiarity and yes, they often feel a sense of entitlement. That’s the double-edge sword (I had to bring that back as well as give a mention that the image comes from wife’s favorite movie - The Princess Bride). In most industries, customers engage or interact with products and services. In restaurants, guests settle into your space, eat your food, and spend time immersed in the environment you’ve created. That’s intimacy and intimacy changes everything.
When you win at the game of intimacy, your guests find a place they love, and they return again and again, and that has them transition from being guest to being a regular. Yes, this can feed the beast that is entitlement, but that is usually highly correlated with loyalty and if you’re winning the loyalty game, you’re winning.
As for the customer that wants to be treated as a regular and brings too much entitlement to the table (pun intended), as one of my favorite mentors showed me (cheers to you Mr. Rosen), the guest isn’t always right (although we try to make it right for them as best and as often as we can). Sometimes the entitled guest deserves to eat a place other than your restaurant and thankfully, we’re a well-supplied (over-supplied?) industry, and if they leave (or you ask them to do so), don’t stress, they won’t starve.
It takes a village.
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🎧 In this week’s Hospitality Hangout episode...
Jamba’s Chief Brand Officer, Nathan Louer, spills the (smoothie) secrets on staying ahead in a fast-changing industry. From digital hospitality to menu innovation, get insider tips on evolving a legacy brand while keeping it fresh, fun and competitive. A must-listen for anyone in the food biz. LISTEN NOW
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Vistify is building the operating system for digital signage in the quick service restaurant (QSR) industry—offering real-time updates, POS integration and scalable control across locations. Unlike generic signage providers, Vistify is purpose-built to meet the operational speed and marketing demands of QSRs.
The $26.76B global digital signage market is growing fast, yet few players are addressing the unique complexity of this sector. Craveworthy Brands—parent company of Big Chicken, Taim and Dirty Dough—recently rolled out Vistify across its portfolio and became an investor in the company.
Led by CEO Michael Mathieu, a veteran in media and ad tech (YuMe IPO, Set Media exit), Vistify is scaling quickly to become the category leader in QSR signage.
Interested in the deal? Reach out right here.
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American Express and Toast just announced a major, multi-year partnership aimed at delivering more personalized, connected dining experiences by integrating powerful tools from Resy, Tock and Toast across thousands of U.S. restaurants. The collaboration will combine guest insights with real-time service tech—giving operators smarter ways to drive loyalty, boost visibility and turn first-timers into regulars.
What this means for you: If you're in hospitality, expect more seamless tools to enhance guest experiences, attract high-value diners and grow repeat business.
Huge congrats to our friends Kelly Esten, Aman Narang, Pablo Rivero and Hannah Kelly on this game-changing move—click their names to congratulate them on LinkedIn.
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@sandwich.safari How often do restaurants spell you name wrong?
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MARKETING
By: Jay Ashton, Canada’s Restaurant Guy
There’s this thing I used to do in university. I’d be deep into sculpting hands in clay, totally absorbed for a few weeks and then I’d stop. I’d leave the piece, go paint for a month. No touching, no tweaking, no staring. Then I’d come back. And every single time, I’d see something I’d never seen before. Something I couldn’t see when I was buried in the work.
I didn’t know it then, but I was training my eyes to see better. That break? That pause? It created clarity. And that little principle? It works just as well in restaurants as it does in art studios.
By: Michael Atkinson, ResTech Entrepreneur, Advisor and Investor
Let’s be real: running a restaurant right now is hard. Labor is tight, as always. Costs are up, as always. You’re buried in reports, spreadsheets, and tech systems that don’t talk to each other. And somehow, you’re expected to hit food and labor targets, boost sales, and keep the team motivated, all before lunch rush.
That’s where AI can help. Not the sci-fi kind. Not a robot taking your order.
We’re talking about restaurant trained AI, built to help you run a tighter, smarter, more profitable operation.
Food For Thought
By: Melissa Hughes, Keynote Speaker, Author, Neuroscience Geek
I recently met a restaurant manager who didn’t just work the floor. He greeted us like we were old friends and treated us like VIPs. At the end of the meal, we complimented our server to him. He smiled with pride and told us that she started with little experience but huge heart for hospitality. He went on to explain that he started out the same way.
That’s passion. And you could feel it in everything he did—from how he supported his team to how he made us feel like the most important guests in the house. And that’s the kind of passion you simply can’t teach.
Beck to the Future
By: Michael Beck, CEO, Inc Tank GTM
There’s a new economic ringleader in town. Gen Z isn’t here to play by the old rules or salute the flag of loyalty programs. They treat every dollar as a meme, a protest, and sometimes a way to score a really photogenic latte. If you run a restaurant or retail shop and want a piece of that action, pay attention. This is not your father’s customer base.
That’s it for today!
See you next week, same bat-time, same bat-channel.
It takes a village!
Jimmy Frischling
Branded Hospitality Ventures
235 Park Ave South, 4th Fl | New York, NY 10003
Branded Hospitality Ventures ("Branded") is an investment and solutions platform at the intersection of foodservice, technology, innovation and capital. As experienced hospitality owners and operators, Branded brings value to its partners through investment, strategic counsel, and its deep industry expertise and connections.
Learn more about Branded here: Branded At-A-Glance
