January 4th, 2010

Some restaurateurs are innovating new ways to find capital.

If you’ve been to a Cheesecake Factory, you probably noticed that the menus were filled with advertising.  I first noticed this fact myself when running marketing for a luxury resort and placed an ad to promote our spa services.  It was expensive!  Around $9,000 for six (6) months, at the time.  As a chain, Cheesecake Factory – which also happens to have a $10.9m average unit volume – pulls in millions selling ad space in their menus.  Suffice to say, it more than covers the cost of the printing.

With a $10.9m average unit volume, this restaurant chain could more than afford to print their own menus.

Even back in my small home town in north Florida, I found that my favorite oyster bar (hole in the wall) sold space on just about everything they could think to put an ad on.  Their menus and now even their tables have advertising.  You can bet the value of the advertising paid for the furniture and then some.  In fact, the little oyster forks they brought out were plastic Nathan’s Hot Dog forks (not sure how they ended up in this here).

So, the question: Is it a good idea to sell space in your restaurant to raise capital or does it damage the brand?

My opinion is that Cheesecake Factory should run the numbers again and come to the conclusion I did – you can make more money and better reinforce your brand by putting your own ads in the menu, not a local car dealer.  In the case of the quirky oyster bar, I think it adds to the charm.  The decision really is situation-specific.  In general it’s risky.  In some cases, it may actually pay off and furnish your restaurant at a profit.

Aaron D. Allen