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The Banks Are Buying & You’re Selling the Real Thing
Friends of Branded!
Happy Saturday and I hope you had a great week.
I could kick off this week’s Top of the Fold with a mention of the New York Knicks and the NBA Finals against the talented, youthful and amazing organization that is the San Antonio Spurs, but I know there are many readers of the H^2 that would not appreciate waking up to that, so I’m not going down that path (or did I just do that?). 😊
I have been asked before each of the 4 games played thus far of these Finals “where are you watching the game tonight?” and I’ve given the same answer every time, “at home with my 9-year-old daughter.” My daughter has quickly developed into a ride or die Knicks’ fan and basketball is here favorite sport to play. Thankfully, my daughter’s basketball skills take after her uncles and not those of her father.
I’m a HUGE believer in youth sports and specifically team sports. When done right, youth sports and healthy competition represent a classroom for essential life skills. In the right environment, sports create the opportunity to transform abstract concepts like grit, teamwork, and accountability into tangible, physical experiences.
Quick shoutout to Brant Lake Sports Academy for Girls, where my daughter will spend part of her summer and learn sports the right way. Play Like a Girl!
Let’s take one of the concepts above, competition, and bring it into our world of hospitality.
Operators, friends, America’s biggest banks are spending billions to win the rewards arms race, and they’ve decided that our guests are the customers they most want to own. The white-tablecloth room is where it starts and much has been written about the fierce competition for hard-to-get tables and reservations. As a result of this competition, a secondary market for restaurant reservations has emerged, as well as regulations around this market that have followed. Imagine, if you will, a discussion in a prison yard, and the question asked by one inmate of another, “what are you in for?” and the response, “trying to sell a 4-top on a Saturday night at Carbone.”
All kidding aside, the market for white-tablecloth tables represents less than 10% of our industry, but it gets a tremendous amount of time, and attention b/c fine dining sells scarcity. Respect.
But it’s the other 90% of the market that’s on my mind and particularly quick service restaurants b/c QSR sells frequency, and frequency is the bigger prize. That’s where this competition for the guest gets big, and it’s where the smartest operators turn the banks’ war into the cheapest customer acquisition in the business.
The article I read that triggered all this was about how Bank of America flipped the switch on BofA Rewards, sunsetting its Preferred Rewards and opening the doors to more than 30mm newly eligible clients. No minimum balance, no annual fee, $150 to $4,000 in annual value by tier. Tucked into the announcement, beside the cash-back deals and card bonuses, was a phrase worth circling: “curated experiences.” When Brian Moynihan talks about a “stair-step” to deeper customer relationships, this is the first step and increasingly, that step has a reservation attached to it.
I’ve banked with BofA for years and remain a loyal customer, but I’ve got to call like I see it, and BofA is late to this game. The war it just entered has been raging for two years, and it’s being fought on our turf.
American Express owns Resy and is folding Tock into a single 25,000-venue reservations fortress to out-muscle OpenTable.
Chase bought The Infatuation, wired OpenTable into its Sapphire Reserve Exclusive Tables program, stacked on a $300 dining credit, and built Sapphire Lounges plating Momofuku.
Capital One runs Capital One Dining on SevenRooms with José Andrés curating. And DoorDash paid $1.2 billion to buy SevenRooms outright.
The common denominator: the most capitalized companies in America have independently decided that the single most desirable thing they can hand a customer is not points, not cash back, not a chair at an airport lounge. It’s a hard-to-get table on a Friday night. It’s access. It’s a moment.
Operators, we make those moments. The banks don’t.
In this Act One of the competition for customers, it starts with the 10%. And that’s the inversion every operator should internalize. In the loyalty arms race, the high-end restaurant is not the vendor, it’s the scarce asset four deep-pocketed bidders are fighting to distribute. So, we need to behave like it matters (b/c it does). Here’s where the rubber meets the road, we need to price the access instead of trading prime inventory for “exposure.” We need to protect our Friday-at-eight tables. And when a bank or platform routes a guest to our dining room, we need to capture the guest (the name, the history, the email) rather than renting out our room while someone else builds the relationship. We own a scarce asset with multiple bidders, so we need to run it like one.
But here’s what the headlines miss: the white-tablecloth world is an important slice of this industry, but it’s not a big one.
Let’s dive into Act Two, and the competition that is moving to the 90% and this is where it gets big (yes, 90% > 10%). 😊
The overwhelming majority of restaurant visits, transactions, and dollars happen in casual, fast-casual, and QSR, and those operators have no hard-to-get table to dangle. What they have is something the banks may want even more. Frequency.
A coveted (hot) table gets visited twice a year. A coffee gets bought two hundred times a year. What a bank ultimately chases is primacy and having its card sitting top-of-wallet as the default swipe. And nothing builds a daily habit like a daily one. Look again at who BofA Rewards is built for: no minimum, 30 million-plus customers, a $150 floor. That’s a mass-market program, and a Michelin room is irrelevant to it. The everyday coffee and the weekly burger are the entire point.
The premium table justifies the annual fee on a $795 card; the daily transaction wins the 30 million. In aggregate, frequency is the bigger prize.
The mechanism is different, too. The high end runs on premium-card perks. The 90% runs on card-linked offers (“CLO”). A brand funds a cash-back offer that lives inside the bank’s app and is applied automatically the instant the guest pays with the linked card. No coupon, no code, no check-in. This isn’t couponing, it’s performance marketing with a closed loop: the bank sees who redeemed, whether they were new, lapsed, or buying the place across the street, and exactly what they spent. And the category is exploding. By industry estimates, ad spend through financial institutions is growing nearly 3x, financial media networks are expanding roughly 6x faster than all other U.S. ad spend, and card-linked offer marketing is on track to nearly triple by 2027.
Now the numbers that should stop every operator cold. Restaurant customer acquisition has gotten structurally expensive: paid customer acquisition cost (“CAC”) now runs from roughly $27 for fast food to about $125 for casual dining, and as high as $180 in dense, competitive markets. Card-linked offers collapse that math into single digits, and I’ll use but will also provide attribution to Branded’s friends at LuckyDiem as I borrow their benchmarks to make my point.
This is where the strategy stops being about the banks and starts being about your balance sheet.
Broad discounting, the coupon, the app blast, the 20%-off weekend, is a structural liability. It gives margin away to loyal regulars who’d have come anyway, it conditions guests to wait for the next deal, and franchisees eat the hit while corporate admires the top-line bump.
Growth that requires margin erosion isn’t growth; it’s revenue substitution. Card-linked offers flip the model. You deliver a targeted cashback privately, inside the financial ecosystem, to the guest you actually want. And here’s the money shot, you pay only on a verified transaction. You never broadcast a discount to your whole base, which means you preserve pricing power even as AI-driven comparison-shopping pushes everyone else toward the race to the bottom. Lower effective CAC, protected contribution margin, intact menu pricing. That’s not a marketing tactic. It’s a balance-sheet decision and, increasingly, an enterprise-value one.
There’s a structural move hiding in that math. While Amex, Chase, Capital One, and BofA spend billions fighting one another for the guest, the operators who win don’t need to pick a side. They’ll plug into a single pipeline that reaches the guest across every one of those ecosystems at once, and pay only when someone actually walks in and spends. One company is turning exactly that into a category (and I admit to channeling my inner Milton Friedman by making them the subject of this issue’s Shoutout, below).
The 10% side of this competition is sexy, but here’s here the playbook for the 90% (and contact me if you’d like to dive deeper into this playbook):
Treat CLO as acquisition, not couponing.
Trade your frequency for primacy.
Run it through one pipeline, not one bank at a time.
Protect the menu, reward in private.
Measure like a CFO.
Fine dining sells aspiration to the top card tier. Casual and QSR sell frequency, reach, and data to the mass program (and that’s the far larger pool of bank dollars). The coveted table justifies the annual fee; the daily coffee wins top-of-wallet; and card-linked offers are the rail that carries the 90% into the same economy the headlines reserved for the 10% and they do so at sub-$5 CAC, on verified transactions, with your margins and your pricing intact.
The banks have decided our guests are worth billions. The operators who win won’t pick which bank to root for. They’ll ride the pipeline that spans all of them, and make the banks pay for the privilege all the way from the chef’s counter to the drive-thru. These are our guests, and we should never forget that.
It takes a village.
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The Insiders
That’s it for today!
See you next week, same bat-time, same bat-channel.
It takes a village!
Jimmy Frischling
Branded Hospitality
235 Park Ave South, 4th Fl | New York, NY 10003
Branded Hospitality is a foodservice growth platform with three integrated business lines—Ventures, Solutions, and Media. We invest in innovative tech and emerging brands, provide expert advisory and capital strategies, and amplify visibility through podcasts, newsletters, social, and events—creating a powerful flywheel that drives growth, brand strength, and lasting success.
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