One fast casual is thinking outside the box of an already ambitious movement.
As interest in digital frontiers like the metaverse and cryptocurrency accelerates, so does intrigue surrounding non-fungible tokens (NFTs). What seemed like a potential fad has fast become a buzzing topic when it comes to new-age restaurant marketing.
Companies like Papa Johns, McDonald’s, Taco Bell, and Pizza Hut have all released their own versions of NFTs with the goal of engaging younger demographics. The launches generally centered around milestones, like the McRib NFT McDonald’s released in celebration of the sandwich’s 40th anniversary. Papa Johns in March unveiled a series of NFTs as part of a Papa X Cheddar marketing campaign to promote its new “Cheddar range,” which launched in international markets.
NFTs, by definition, are unique tokens stored on a blockchain (a type of digital ledger). NFTs can be sold and traded by whoever owns them on various digital spaces that act like virtual marketplaces. NFTs are non-interchangeable units of data, which make them easily identifiable, and are generally associated with digital files like photos, videos, and audio. Owning an NFT gives the owner exclusive access and drive interest due to the limited nature of the collectible.
While many restaurants have been using NFTs to bring attention to their brands by offering perks like access to exclusive menu items or company swag, one fast casual is going in a different direction.
Chick’nCone, a Pennsylvania-based chain specializing in instagramable, portable chicken and waffle dishes, announced the release of “Chick’nCoins,” the brand’s new NFTs geared toward helping it reach royalty sufficiency while the brand continues to develop new franchise locations.
What separates Chick’nCone’s offering from other NFTs circulating the restaurant world is what owners get in return. Chick’nCoin NFT holders will be in a position to reap cash rewards through Chick’nCone in the form of royalties and franchising fees.
Chick’nCone says it will release a finite number of NFTs for anyone to purchase. The tokens represent a specific geographic region within the U.S., which will then be assigned to whoever owns that specific token. Buyers can pay 3.5 Ethereum (a form of cryptocurrency) to be randomly assigned a geographic area, or 6.5 Ethereum to select which region they will be assigned. It was a roughly $14,500 token back in February, although figures fluctuate.
After purchasing the Chick’nCoin, owners are eligible to receive 50 percent of the initial franchising fee for any new Chick’nCone stores opening in their area. Owners of the tokens will also earn monthly payments in the form of 2 percent royalty on sales at all units within the area for up to six years. Currently, the initial franchising fee is $45,000, meaning holders of the NFTs could receive $22,500 on the first sale of a new location.
“We’re a company that’s rapidly growing and I’m hoping to bring in capital without having to give up equity in our company,” Jonathan Almanzar, CEO of Chick’nCone, says. “This also provides a payoff for people down the road.”
Part of the appeal of NFTs is the ability to turn a profit by reselling them on digital marketplaces. Chick’nCoin is unique in the sense that owners don’t have to resell their tokens to recognize a profit—the potential for profit is built into ownership of the coins.
Almanzar says one of the benefits of the campaign is potential to have Chick’nCone “ambassadors” throughout the country who are invested in the company’s success. Along with generating revenue from the sale of the tokens, the campaign is essentially creating a pool of individuals across the country who have good reason to want to see a Chick’nCone franchise open in their designated geographic region. It’s like having a nationwide system of franchise recruiters.
“Instead of having people say ‘oh, this place is really great,’ and generating interest in the brand through usual channels, these people [owners of Chick’nCoins] really bought into the Chick’nCone culture,” Almanzar says.
While Chick’nCoins have the chance to be lucrative investments, Almanzar isn’t oblivious to the marketing potential the tokens provide as well. He says one of the benefits of releasing an NFT so unlike anything else on the market is the attention it’s brought the company.
“We’ve gotten a lot of press,” he says. “It’s an exciting thing that people hear about … I’m always fascinated by novelty and things that are brand new, so I think ideas like this that are novel, and it won’t be novel for long, has an attractiveness in media and marketing.”
Almanzar adds other brands would be wise to start offering NFTs with real-world utility (like the Chick’nCoin), especially older chains in need of a fresh marketing angle. Excitement around NFTs can be translated into sales and a rejuvenated customer base, he says.
“I think there’s a lot of opportunity for legacy brands to be creative,” Almanzar says. “There is ample opportunity for them to take NFTs with real utility and create a revenue building fan base. I think legacy brands should be doing it even more than young, new up and coming brands.”
As restaurant consumers become more tech savvy, Almanzar says it’s important for brands to capitalize on digital channels when it comes to marketing.
“It’s very instagramable, tweetable, and that helps,” he says. “We live in a day where we can actually measure and quantify word of mouth. We’ve never been able to do that before, but because of Twitter and Instagram we can.”
The future of NFTs is still somewhat in the air. Being relatively new, brands are going to have to educate their customers about what NFTs are and the various ways they can be used, but Almanzar thinks they are here to stay regardless, particularly since they are so connected to cryptocurrency.
“It’s becoming more and more common,” he says. “I remember eight years ago, I was talking to my dad trying to convince him to buy Bitcoin and he wouldn’t do it. Now, he’s asking me where he can get Bitcoin.”
As far as NFTs, he says they will surely play a role in the quick-service space down the line. How exactly remains to be determined, but he offers an interesting prediction related to the future of franchising; one where contracts are bought and sold on digital platforms.
“I don’t know about the near future … but I could see franchise agreements becoming NFTs,” he says.
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