How to Add Revenue in Your Restaurant’s Spare Time
New York City restaurant Saxon + Parole has tried more than once in its eight years to crack weekday lunch. But the eatery’s mid-tier, refined American menu struggled to compete with the spate of affordable, fast options and prix-fixe power lunch spots dotting Lafayette Street three blocks away.
“We decided to conserve resources and only open for dinner,” says executive chef Brad Farmerie.
For the past two-plus years, however, the restaurant has had no trouble filling seats five days a week at lunch—except that no one’s eating. Saxon + Parole was one of the earliest recruits for Spacious, the three-year-old start-up that converts upscale restaurants into weekday work spaces, which now counts 20 clients in New York and six in San Francisco.
For eateries grappling with ballooning costs and frustrated by disappointing lunch traffic, the drop-in workspace represents an appealing value proposition. In exchange for little more than a set of keys, they get a slice of membership dues and increased visibility without the fuss of slinging food and drink.
“A lot of unused value goes vacant if restaurants in high-cost real estate markets like New York don’t open for lunch,” says Spacious cofounder Preston Pesek. “We offer found money where otherwise they’d just pay the fixed costs of running the restaurant.”
Spacious’ founders argue that the membership model represents the future of neighborhood brick-and-mortar spots in a society that increasingly does its buying online. With the explosion of the gig economy, drop-in workspaces are cheaper than office or coworking space and less awkward to linger in than more retail-driven coffee shops. So far, the model hasn’t raised eyebrows with city regulators, either, because the restaurant holds the primary lease, with Spacious functioning as a service provider.
The company charges users $199 by the month, $129 a month for a year, or $20 for a day pass. (By comparison, coworking spaces like WeWork charge about $25 for day passes and $300 for monthly hot desk options a few times a week.) Restaurants’ cut depends on how many people check in there each month.
Spacious’s network of upscale restaurants represents what Pesek calls some of the cities’ most interesting environments, effectively built to please—with good lighting; well-spaced, comfortable seating; and an inviting atmosphere. Hospitality factors heavily into its M.O. To wit, chief operating officer Jaclyn Pascocello was formerly a general manager at Hillstone Restaurant Group.
Each morning, hosts brew Spacious-roasted coffee and set up a self-serve beverage station, remove place settings and run extension cords and power strips beneath the tables. Spacious provides a separate boosted WiFi signal and curates ambient playlists. Hosts can also help with reservation taking and ensure users vacate certain sections of the dining room first. Each evening, they pack it all up and prepare the dining room for service.
“They make sure everything is set up the same way every time,” Farmerie says. “They become almost an extension of the restaurant.”
Spacious isn’t the only game in town. In Austin, Texas, longtime remote workers Siri Chakka and Silva Gentchev cofounded flexible workplace startup Reset last year. The company partners only with independent restaurants, in part to counter the rise of chains in Texas’ rapidly expanding capital. Reset offers day passes for $10; an hourly option at $3 per hour; 10-day passes for $80; and unlimited access for $150 per month. Membership includes discounted happy hours and access to “Supper Club” networking and other events.
Reset’s debut came at the perfect time for Nightcap owner Christin Rowan. The city’s onerous parking regulations had dissuaded Rowan from opening for lunch, leading her to scope out other ways to make money during the day. Nightcap is one of a handful of Reset recruits—the other being Mediterranean spot Tillery Kitchen & Bar and Wright Bros. Brew & Brew in east Austin. (As of publishing, Reset has stopped operating work spaces out of Nightcap.)
Reset satisfies Rowan’s goal of providing a middle ground between the coffee shop and really expensive options like WeWork for her close-knit community of creatives. Members often linger for happy hour, making connections with fellow freelancers and entrepreneurs. A few local businesses have signed on for corporate membership, one of which is planning a networking dinner with Reset at the restaurant.
“I’m not really in it for the money, to be honest,” she says. “I think the founders are special.”
She admits to feeling a bit unnerved by having people invade her “home” when she’s not there. There have been a few communication slipups—one, involving an unannounced late start by Reset, resulted in the loss of a prep cook who’d been waiting for someone to unlock the door.
Farmerie finds little downside to the model, except having to plan restaurant maintenance in advance. Interestingly, what’s proved most head-scratching for Saxon + Parole is converting Spacious users into guests once the workday ends.
“We offered members discounted drinks for the first hour and a half after Spacious closes down, but it’s extremely rare that anyone takes us up on that,” Farmerie says. He even tested a pared-down lunch menu, but few ordered it, opting instead for a change of scenery and a cheaper meal at nearby Whole Foods or Sweetgreen. Now he’s learning to sit back and let the space do the work.
“It brings the space to life, but we don’t have to staff it,” he says. “There are a lot of people coming through that wouldn’t normally see the restaurant. Every little bit helps.”