The new free lunch

Yesterday at my favorite burrito chain, Qdoba, I was musing to M about whether a completely ad-run restaurant could work. I'm paying $6 for a burrito. I don't know much about restaurant margins... they're thin I hear... but how expensive is it to make that burrito? Ingredients, hired help, rent, blah blah... what are we talking, an amortized three bucks each? Let's say $3.

This particular Qdoba is located near a bunch of expensive universities. Haverford and St. Joe's kids are in there all the time; Penn isn't too far away as the crow flies. That is juicy marketing target -- young AND moneyed.

If you could guarantee delivery of rich college eyeballs, how much would a well-targeted advertiser pay? Would they pay $3 per impression? Would five advertisers pay $.60 each?

What if you made your customer fill out a survey for their free food too? Wouldn't some marketing firm love to have that steady stream of data? They'll pay more than $3 a pop to get these peoples' opinions in other venues, right?

Then sell space on some tasteful wall posters, sell the tray liner space... as long as you don't get greedy and sell every ceiling tile, you could make this work.

The food would have to be good. You couldn't ever let food quality drop. But otherwise, this seems like it would make at least as much profit as a regular burrito joint. There must be some reason why this hasn't been tried yet, right?

Then, that very same day, I see this: Panera: Pay What You Can Afford.

“Take what you need, leave your fair share,” says a sign at the entrance of the Saint Louis Bread Company Cares Café. Patrons who can’t pay are asked to volunteer their time.

The café, which reopened Sunday as a nonprofit, has cashiers who provide receipts with suggested prices and direct customers to the store’s five donation boxes. The menu is the same, except for the day-old baked goods brought in from sister stores in the area.

“I’m trying to find out what human nature is all about,” Ron Shaich, who stepped down as Panera’s CEO last week but remains as chairman, told USA Today. “My hope is that we can eventually do this in every community where there’s a Panera.”

Not quite the same thing, but maybe one better.

John Mackey on corporations as do-gooders

Part 54 zillion in a series of musings about capitaltruism, an excerpt from a New Yorker article about John Mackey, CEO of Whole Foods:

[Mackey] "...This is a paradigm that has polarized our country and led to bad thinking. It’s holding the nation’s progress back. It’s as if there were a wall. And on one side of the wall is this belief that not-for-profits and government exist for public service, and that they’re fundamentally altruistic, that they have a deeper purpose, and they’re doing good in the world, and they have pure motives. On the other side of the wall are corporations. And they’re just selfish and greedy. They have no purpose other than to make money. They’re a bunch of psychopaths. And I’d like to tear that wall down. Human beings are obviously self-interested. We do look after ourselves, but we’re capable of love, empathy, and compassion, and I don’t see that business is any different.”

He went on, “We’re trying to do good. And we’re trying to make money. The more money we make, the more good we can do.” By this, he had in mind not the traditional philanthropic argument that more money earned equals more to give away but, rather, that a good company—that is, his company—which sells good things and treats its employees, shareholders, customers, and suppliers well, can spread goodness simply by thriving.

This was a variation on what he calls “conscious capitalism,” which some people, smelling an oxymoron, or worse, snicker at. His idea is that business should have a higher purpose—that, just as doctors heal and teachers educate, businesspeople should be after something besides money. It may be an easier argument for a grocer to make; he feeds people, and if he feeds them properly he heals and educates them, too. But it borders on humbug when you apply it to, say, Wall Street. Consciousness, as it relates to capitalism, is in the eyes not so much of the beholder as of the capitalist.

via Kottke.
Read the whole article at your leisure.