E La Carte Announces Partnership with Applebee’s

by Adam on December 2, 2013

Earlier today, E La Carte announced that it had entered into a long-term partnership with the popular Applebee’s restaurant chain to provide 100K tablets for a national roll-out by the end of 2014. You can read full details of the announcement here:

http://techcrunch.com/2013/12/02/e-la-carte-scores-deal-with-applebees-bringing-100000-tableside-tablets-to-all-u-s-locations-by-year-end-2014/

The news is ground-breaking insofar as it represents the first major inroad into the valuable, but largely untapped marketplace for digital restaurant services. There are a number of startup companies out there vying for a key position as the go-to provider for these services, and inking an agreement with the largest restaurant chain in the country gives E La Carte a huge advantage.

But, this deal also highlights a potential vulnerability in the startup opportunity in the restaurant space. By and large, the dollars (and revenue opportunity) lie mostly in the unglamorous and largely middle-American “mass market.” This deal with Applebee’s is indicative of that, and there are a few reasons for it:

  • While most startups will contend that the cost to get started with new services is relatively minimal, it takes effort, time and money to get started, both for the client and the provider. The national mass market restaurant chains have the size and scale to warrant that investment, and the opportunity to roll-out in a large number of locations quickly is worth the effort.
  • In the same vein, while we may hate to admit it, the mass market brands are often the ones with the most consumer visibility, largely because they reach such an enormous swath of the market, and also because their consumer base is not limited to any specific demographic or region. It’s that visibility that will help new service providers find adopters for technology solutions at the dining table.
  •  And while restaurant entrepreneurs may not want to admit it, the idea of a digital device that helps you do everything from order to pay your bill, while entertaining you in-between is likely not targeted to the Per Se crowd. Tablet-based ordered and entertainment systems are a natural fit establishments like Applebee’s, which have a very down-home ambiance (and also benefit from both a need and expectation that consumers will be moved through the dining experience quickly). While upscale establishments may see the benefit of tablet-based systems, I doubt they will move away from high-touch interactions anytime soon because it’s counterintuitive to the experience that consumers pay for.

All of the above puts a more specific scope on the opportunity for digital ordering and payment, but it also means that the potential in this arena is not limitless. In fact, if one provider could lock-in 3-5 different chains quickly, that would go a long way to establishing a strong and highly-defensible foothold in this portion of the marketplace, one that would be very difficult to unseat once in place.

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