[msandford]

I think the ingredients problem is why chain restaurants haven't completely dominated the landscape and why small restaurants can compete. No solution to the ingredients problem scales in a way that favors big entities. In fact there is a "tax" associated with being big for many ingredients that small restaurants don't pay.

If I need 1 fresh tomato a day it's tough because any one supplier might or might not have good tomatoes but I have to visit them all to see.

If I need 10 per day it's less bad for sure. The trip cost doesn't dominate quite so hard anymore.

If I need 100 per day that's probably optimal because the trip cost is minimal and it's easy to make sure that quantity are good. I can probably still get this from a single source, from whichever vendor has the best tomatoes today.

If I need 1,000 or 10,000 per day I'm screwed. I have to have relationships with multiple suppliers who aggregate tomatoes from a bunch of different sources in order to get the volume. Each of which will have different levels of quality and freshness and whatnot. So now I'm spending a lot of time trying to do what I wish my vendor would do, but which it does not.

Big chains get big by removing the fairly well paid manager/operating partner whose job it is to monitor quality and everything and replacing him/her with a food factory at a remote location. So instead of paying several people real middle class wages they pay several people to just manage the hourly staff. If they can get away with paying $40k/year instead of $80k/year times three people then that's $120k/year in profits per restaurant.

Chilis has 1500 locations and seems to do about $200mm in profits a year. 1500 * $120k = $180mm so it seems like my math isn't totally crazy.

I think what that indicates though is that if you want something that'll really scale well and reach as many people as a nationwide chain you're going to have to make the same compromises that most nationwide chains do in terms of quality or price.

My guess is that there's not some magic bullet that everyone's overlooking.

To be perfectly honest I hope I'm really wrong and that it's possible to get higher quality food for cheaper. It'd be great. That would be a billion dollar company for sure.

Best of luck!

[jmzbond]

Love the illustrative parabola thanks! I agree with so many of your points, but I do hope there's an alternative as well, and that's actually why we're in business, to explore those models. This is just the consumer facing engine that will give us (hopefully) the funds to do so. And we have a lot of ideas about things to explore =)

Feel free to keep in touch if you ever have other thoughts, I always like chatting strategy: [e-mail]