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At The Aviary in Chicago, where checks average $48, orders for the prix-fixe menu tripled after the restaurant began selling tickets.

Selling Seats

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Pay to play takes on new meaning as tickets replace reservations, improving guest satisfaction and restaurant performance.

By Daniel P. Smith May 2015 New Concepts

In Chicago’s Fulton Market neighborhood, host to some of the Windy City’s prime culinary hotspots, restaurateur Nick Kokonas ascends a steep flight of some 20-plus stairs before arriving at the second-floor offices of the celebrated restaurant enterprise he’s built alongside Chef Grant Achatz.

Kokonas, a driving force behind groundbreaking concepts Alinea and Next, leans into a room where a trio of men glare at multiple computer screens. This is the nerve center of Kokonas’ latest venture, a restaurant ticketing startup called Tock.

“Anybody grabbing lunch?” Kokonas asks.

If Tock is to emerge a disruptive force in the restaurant industry—as some industry observers have suggested it can be—the company looks remarkably unassuming on this January morning. Calm and routine reign, right down to Kokonas’ lunch order of “what I had last time.”

Of course, what’s happening on those computer screens—and even in Kokonas’ own mind—is anything but standard. Kokonas, in fact, is betting that consumers will accept buying a ticket for a meal just as they would for a baseball game or concert.

If it seems like a strange, implausible idea, Kokonas understands. Years ago when he first suggested the idea of ticketing at Alinea, staff fired back with quizzical, even combative looks.

But Kokonas, a former derivatives trader not born and bred in the kitchen, has a habit of asking “Why not?” far more often than any of his industry colleagues, with Tock serving as a single, shiny example of that curious spirit.

“Our own restaurants have shown that ticketing can work and transform restaurant operations,” Kokonas says, confident that Tock, which boasts an investor list that includes famed Chef Thomas Keller and Twitter CEO Dick Costolo, can become an industry home run.

For those questioning restaurant ticketing’s viability, Kokonas bared all on the Alinea blog last June, where his intensive, detailed post on the merits of ticketing captured millions of page views and sparked deep dialogue.

Prior to implementing the ticketing system at Alinea, which ran for more than seven years using a traditional reservations system, Kokonas was spending about $140,000 per year on payroll simply to answer phones, input customer information, and manage the waitlist. The restaurant also lost more than $260,000 per year on no-shows alone. Ticketing virtually erased those bottom-line drains, Kokonas says, highlighted by a no-show rate of merely 1.5 percent.

“When someone has invested in something, they are more apt to follow through,” he reminds.

At The Aviary, a Chicago cocktail lounge Kokonas’ team opened in 2011, Kokonas cited the dramatic rise in prix-fixe menu orders. While only 8 percent of diners ordered prix-fixe menus before ticketing’s installation in November 2013, the numbers skyrocketed with ticket sales. In May 2013, for example, Aviary sold 426 three-course menus; in May 2014, with ticketing, that tally nearly doubled to 839. Five-course menus in May, meanwhile, tripled from 78 in 2013 to 256 in 2014.

“People appreciate that they can look the menu over,” Kokonas says.

Ticketing, Kokonas contends, has spurred improved planning, affording his restaurants more control over their service, labor, and purchasing. And when a restaurant runs at greater capacity with less waste, the bottom line benefits. To wit, Kokonas reported that Alinea’s “bottom line EBITDA profits [jumped] 38 percent from previous average years” thanks to ticketing.

Furthermore, Kokonas continues, ticketing delivers heightened transparency and injects greater trust into the restaurant-diner relationship, providing choice and eliminating the gatekeeper syndrome. Customers have the option of paying a bit more for a primetime table or saving a bit for an off-prime table, he says. Either way, it’s the customer’s call—and they don’t have to slip the maître d' $20 simply to land a table.

“Diners commit to showing up, but they’re not paying for access … and every dollar the customer spends goes directly to their food purchase,” Kokonas says, carefully distinguishing Tock from newfangled apps like Resy that charge diners for a reservation at in-demand establishments.

At the Lazy Bear in San Francisco, which has been employing ticketing since its opening last September, owner David Barzelay points out that limited no-shows and improved planning have allowed his operation to improve the consumer experience and deliver greater value for guests.

“Ticketing allows us to focus on the food experience and bring costs down for everyone, so the diner benefits from this shift,” Barzelay says.

Ticketing’s multi-layered benefits, particularly for the restaurateur, have ignited interest across the restaurant space, says Waldy Malouf, senior director of food and beverage operations at The Culinary Institute of America (CIA) in Hyde Park, New York.

Wanting to expose its students to the novel idea, the CIA instituted ticketing at its newest restaurant, the 44-seat Pangea pop-up eatery. The CIA built its own ticketing program in which diners pay for their prix-fixe menu and their service up front via PayPal, only purchasing beverages at the restaurant.

Meanwhile, Intro, the newest Chicago-based restaurant from Lettuce Entertain You Enterprises (LEYE), became one of Tock’s beta testers when the restaurant launched in February.

LEYE patriarch Rich Melman says “most customers have embraced the [ticketing] concept” and he sees possibilities for ticketing beyond prix-fixe restaurants. “I think as the technology improves and evolves, we will see that it could be applicable to any restaurant that takes reservations,” Melman says.

Yet, mystery remains. Can restaurant ticketing, whether led by Tock or another player perhaps, push ticketing into the mainstream and gain widespread consumer and operator acceptance? After all, only a small percentage of the nation’s estimated 300,000 full-service restaurants can claim the demand of an Alinea, Lazy Bear, or Intro.

“People think this only works for the high-end restaurant, but we dispelled that myth at The Aviary, where the check average is $48,” Kokonas says.

In fact, Kokonas believes Tock’s platform has applicability for any restaurant carrying a check average above $25.

He thinks this largely because Tock features five different ticket options: No deposit, which is essentially a reservation; a modest deposit of $5–$25 that later appears as a credit on the bill; a dynamic deposit, such as a $10 ticket that earns a $15 credit; a single-price, general-admission ticket for special events; and the prix-fixe menu ticket.

“That there are a few different flavors of this is a real advantage,” Barzelay says of Tock’s system. “Even if what works for us at the Lazy Bear or at Alinea doesn’t work for everyone else, I feel some version of this could be applicable for a whole lot of restaurants.”

Malouf, who spent 13 years as co-owner of New York City’s Beacon Restaurant, believes “100 percent” that restaurant ticketing can become mainstream, especially given ever-rising consumer comfort with online commerce.

“Not only do I think customers will easily accept ticketing, but I believe they might actually prefer it since it brings guaranteed seating and no waiting,” Malouf says.

Back in his Fulton Market office, Kokonas says he has fielded interest in Tock from hundreds of restaurants ranging from 10-seat chef counters to 350-seat steakhouses.

Currently in its final stages of testing, Tock is on pace to go live in mid-2015 with restaurants paying a flat monthly fee of $695 per location for the Web-based system.

“The platform is flexible enough to deal with everyone,” Kokonas says, adding that ease of use for the restaurant has been a principal mission.

If we need to have a user manual for Tock, then we’ve failed,” Kokonas concludes. “And we’re not in this to fail.”