The Restaurant Technology Guys Podcast brought to you by Custom Business Solutions
The Restaurant Technology Guys Podcast brought to you by Custom Business Solutions
Transforming Restaurant Success with InKind: Tech-Driven Strategies and Innovative Financing
In this episode, the discussion centers around InKind's innovative, tech-driven approach to scaling and supporting restaurants. InKind's CEO shares insights on leveraging Silicon Valley strategies, deploying large-scale data analytics and AI, and the significance of personalized support for independent restaurants. The episode covers the dual role of InKind as a financial service provider and a consumer marketplace, detailing creative financing solutions and marketing experiments that enhance profitability and customer experience. Listeners also learn about the platform's benefits for business travelers, including earning credits for personal dining through data-driven recommendations. The episode emphasizes practical advice for restaurant owners, market insights from owning restaurants, InKind’s funding model, and future enhancements, aiming to create a sustainable and profitable ecosystem for restaurant growth.
00:00 Introduction to the Podcast
00:55 Meet Johann Munisinghe: From Tech to Restaurants
01:55 The Birth of InKind: Solving Restaurant Finance
03:12 The Restaurant Incubator Experiment
06:41 Scaling InKind: Financing and Marketplace
11:31 Challenges and Solutions for Restaurant Operators
17:01 InKind's Unique Value Proposition
19:56 Challenges in Restaurant Tech
20:39 Uses of Capital in Restaurants
21:07 Sponsor Messages
22:07 Growth and Financing Strategies
23:21 Consumer Experience with InKind
25:15 Leveraging Data for Recommendations
28:25 Engaging with InKind for Expansion
35:40 Future Vision and Expansion Plans
36:41 Conclusion and Farewell
This is the Restaurant Technology Guys podcast. Helping you run your restaurant better.
Jeremy:In today's episode, we're joined by Johann, who is the founder of in kind, but. You need to listen to the entire episode because he talks about going from a tech entrepreneur who may hate, a fantastic product and did really well in the market. To starting his own restaurants and then realizing that restaurant finance was really a challenge. And what could he do to solve that? His and my my conversation was fascinating. I love going down the rabbit holes of why he loves restaurants and why he loves food service and why he decided to start in kind. If you don't know me, my name is Jeremy Julian. I'm the chief revenue officer for custom business solutions. We sell the north star point of sell product that is designed for multiunit restaurants now to the episode. Welcome back to the restaurant technology guys podcast. I think everyone out there for joining us today is going to be a fun episode because I've got a restaurant tour and a restaurant finance guy, former tech guy. And so I am going to let him introduce himself. you want to give us a little insight as to, Johan, is it Johan?
Johann Moonesinghe:AbsolUtely. Johan Munisinghe.
Jeremy:Yeah. I'm glad I didn't try and say that last name. cause I probably would have screwed it up and I was like, Oh, it's gotta be Johan. I think he said that earlier. So talk to me a little bit about your history, cause you and I were talking pre show and, pretty blown away with the different experiences you have. And then we can dig into what in kind is and where it came from and such. Cause I think it'll be fun for our listeners to hear.
Johann Moonesinghe:Yeah, absolutely. Thanks, Jeremy, for having me. appreciate the podcast and, what you're doing to help the industry.
Jeremy:Thank you very much.
Johann Moonesinghe:you asked me, I think, pre show, why do you do this? does it make any sense? Restaurants are terrible investments. And I totally agree. but, but you and I both love restaurants and we love food and, We love the communities that are created around restaurants. And so it was, worth figuring this out, and the hardship, but my background is in tech. and then I had a tech company that, Actually failed and then I went through a tech incubator called Techstars and they helped me I sold that second company and then I'm an early investor in a bunch of tech companies And that allowed me to do whatever I wanted and I love restaurants so I started investing in restaurants and I invested in about 17 restaurants and Realized that this is a horrible asset class. I'm gonna give away all my
Jeremy:huh.
Johann Moonesinghe:You know, I was at a very famous restaurant. I took my mom for dinner and she's Johan, this is the best investment you've ever made. And I was like, this is a 50, 000 dinner because they have never
Jeremy:Yeah, exactly. you were you and I were teasing about it. I've been in restaurants for 30 years and everybody's Oh, why don't you open up a restaurant? I'm like, because it's hard. It's hard to it's hard to run a restaurant. It's hard to be relevant. It's hard to reinvent yourself all the time. And, you get that, 1 in 100, That's that flagship restaurant that just kills it. But everybody goes through their seasons and we see it. You talked back to history. What is in kind and why investment in restaurants? Cause I'm, I am super intrigued because I don't think that there's a whole lot of people, actually, I know there's not a whole lot of people that are doing what you guys are doing, which is part of why I'm excited to get the word out about what it is that you guys have out there to help people out.
Johann Moonesinghe:Yeah, so essentially what happened was I made these 17 restaurant investments and then, I got married and my husband, he's a lawyer from England, he moved to DC and he, and his idea was, Johan, you went through that tech incubator and helped you a lot. What if we open a restaurant incubator? And we did. So we opened an 18, 000 square foot restaurant incubator in Washington, DC, and we brought chefs and entrepreneurs into the space with the idea of we could teach them, how to better run a business, how to raise capital, find them lease space, and then they would move out and we would invest in them. And we ran it for five years. So we were there until two in the morning running this, Restaurant Incubator, which is basically a series of pop ups where we bring in chefs in and it's extremely complicated And we were learning about restaurants, restaurant finance, restaurant operations we were there all the time You know in every position in the restaurant and really learning and out of that We discovered one that restaurant finance was broken. The biggest problem like banks don't really want to lend They will The rates are not great generally, there's a lot of covenants because the bank, it doesn't want to take risk. And so it's hard though, then if you're a restaurant and you want to operate, do you want a way to operate? You don't really want to, follow the bank covenants. you want to run the business where you want to run it. and then I think investors in restaurants are actually. phenomenal people, they want to help a restaurant, they want to help their friends, they want to help a chef open a spot in their neighborhood. The fundamental problem is that if you and I want to go open a restaurant, Jeremy, we would basically go and raise five million dollars from our friends and family and people in the neighborhood. And we'd say, okay, we're going to pay you. All of our profits, so you get paid back and then maybe we'll get 50 percent and you guys get 50 percent as investors. And three, four years in, you and I are still haven't paid the investors back and don't see a path towards returning that full 5 million out of our profits. Cause as we know, press phones don't make that much profit and they cost much to build out, and so much to open. And so after three to five years, we're like, this is, doesn't make any sense. we get out of the, we hand the keys back to the landlord and We go get jobs where we can actually make money. And so it's not financially sustainable, but what we realized from owning our restaurant is if you came in, I'd give you, I comp you a meal, right? Because you're my friend and you're like, Oh wow, I got a 200 meal. And in my head, I'm like, it actually cost me 50 bucks. Cause that's what the cost is. And it's taken us 10 years, but we've basically developed the, I think one of the largest restaurant finance companies today out of that model. So we give a restaurant money. We basically buy food and beverage credit in that restaurant. and then we have 2 million users on an app. That we send into the restaurant and they go and they eat and they have a great experience and we only add great restaurants to the app. So every user that uses the app knows if they open up in kind and, they're go to Dallas, close to where you are. they can go and eat at Carbone or they can eat at Yardbird or they can eat at some of the best restaurants, that they discovered through InKind. and then we give them some additional values. So usually it's 15 to 20 percent back that they get to use on the network, right? So your customer, you go and spend 500 at Yardbird, Dallas, you get 100 back. You can go use that at Carbone or you can get coffee or whatever else with it. And so that's the whole model.
Jeremy:that's pretty amazing. and again, I know we were talking about it a little bit pre show. I'm going to take a step back and just ask why restaurant incubator? Because you know what? It probably would have been easier just to open up quite honestly, even 17 brick and mortar stores to figure it out, or just one brick and mortar store. why the incubator? Because I, I think it. It really informs what it is that you got, your history between the tech side, then the operations and ownership really informed some of those decisions. But why the incubator? Why 17? most have a hard time running one. You said it was really complex when you were going through it. Help me understand where that came from.
Johann Moonesinghe:Yeah, I think that the incubator idea really came from my experience going through a tech incubator, going through that Techstars incubator, and really being connected with mentors and advisors and people that could teach me how to run a tech company. And we thought, what if we do the same thing in the restaurant space? The reality is, yeah, we probably bit off way more than we should have. like the first year, I think I probably lost 600, 000, running this thing. And, it's, so it's, Not great. and then my husband was also like, Whoa, I didn't commit to working a hundred hours a week.
Jeremy:Yeah,
Johann Moonesinghe:I married you, but I was marrying a rich tech guy,
Jeremy:that's funny. That's really funny. He's Oh, I didn't sign up for this.
Johann Moonesinghe:not at all. No. And he's, yeah, not at all. And he's really cute. And he's definitely didn't marry you for your looks. Y'all on, so I'm not really sure what's going on here.
Jeremy:that's hilarious. in similar to your kind of tech startup world, so few make it big time. you were privileged enough to be in, quite a few that you were early investor, involved in some that really hit it big time and were, what Silicon Valley calls unicorns. Same thing, same kind of thing happens for restaurants, I'm assuming. So talk me through even what your evaluation process is. One, when you guys were in that incubator phase, when did you launch them? When did you get them out of the space to launch on their own? Because again, I think it's going to inform some of the conversations about how and when do you get involved with, other brands when you're giving them capital to, to grow kind of thing.
Johann Moonesinghe:is a lot different. we're at such a big scale, but, really ultimately all that we care about is the hospitality and the food of a restaurant. because we want a user on the app, when they go to a restaurant, we want them, we want to make sure that it's going to be a great experience for them. I used to go and eat at every restaurant before we funded them. And I'd have I still have sometimes three dinners a night, but even now we're adding. I think I just heard a stat today. So in the first nine years of in kind, we've basically financed a thousand restaurants and then that was the beginning of this year. In the first nine months, I've signed over 2, 200
Jeremy:Oh my goodness. That's insane. Yeah.
Johann Moonesinghe:I think this week we're probably going to fund 20 million to restaurants. Like it's really at a different scale, then. And it's ever been, but the core thing that we look for is quality of experience, hospitality, food, do people love this restaurant? So we look at online reviews. We look at, as much as we can, we eat at the restaurants or we send people from our team to eat at the restaurants. And that's the number one thing that I'm underwriting against because that's what I'm doing. I'm buying food and beverage credit in a restaurant. I want to make sure that people are going to love going to that restaurant. And then at our scale now, I do everything that I can to help that restaurant. So I'll help them with their marketing, their social media, et cetera. As part of what we do because the brand of the restaurant, the higher the brand, the easier it is for me to sell credit to send people in. so we work with a lot of restaurants on those types of things. And, you're right. Like at the end of the day, if you're strictly making investments in restaurants, you want to, and you want to maximize your return. Invest in fast casual, invest in cava or sweet green or whoever else, right? that's the most scalable, most profitable highest market value, right? I think though, for us, we love going to independent restaurants. We love going to places that, the chef's cooking and cares a lot. And, it's a husband and wife team running the restaurant and
Jeremy:They've got a vested interest in making sure it's successful and that the guests are coming back cause you're inviting them into their own personal kitchen.
Johann Moonesinghe:exactly. And that's who we want to build. And that's what we want in our communities. And so that's who we focus on it in kind is, those. Those independent restaurants that, the traditional funding for just doesn't make sense because there's so little profit is, Jeremy made in restaurants, and it's a low profit business, profit margin business. So if you're paying your profits to someone else, it means that you don't have money
Jeremy:Yeah. Yeah. You're buying yourself a job to, to work a hundred hours a week and get paid, which you probably could get. make a whole lot more money. and similar to, your experience on the tech side. I know as our organization, we've got advisors. I love that you guys will also advise on some of the other components. What are some of the things that you find that new restaurant operators or, or operators that are looking to get beyond kind of their, Original property are struggling with. Is it primarily the marketing and the branding as you talked about? Is it operations? Is it, you said most people don't even understand restaurant finance having been in the business for 30 years, they don't get what it actually takes to build the restaurant, nor does it, do they get what it takes to even, manage cash flows, manage payroll, so many things that go into these items. And then they got caught with their pants down without the ability to You know, make payroll tax or whatever those things are. So help me understand, because again, on the tech side, I'm sure nobody gets there alone. And when they do, they've got people that are helping them in that. Are there specific thing, areas of focus where you guys think you guys can really move the needle for these people after you decide this is something worthwhile?
Johann Moonesinghe:think that the most important thing that we do for all of our restaurants is we send in great customers and we have a ton of data because we spent a lot of money on understanding what the customers are buying, right? Making recommendations. We use machine learning and AI and all these things. that an individual restaurant would never, ever be able to do. And I have 160 people, probably 70 to 80 are in product and developers, like we have massive budgets to solve problems that our restaurant doesn't have the budget to solve or the know how, but we use all of those learnings and technology to help the restaurants. But more specifically, it really depends on the group. or independent restaurants. we've, we work with major groups, major food group, noble 33 Jose Andres, Danny Meyer, Michael Mina, right? Like they need, they have different needs than the independent restaurateur that this is their first or second restaurant and they're running. and so we try to fit whatever that need is. So I tell people we're like truly your partner, And I own restaurants and partially I own restaurants cause I want to continue to feel the pain so that I'd never forget, how hard this is. and we then build products around my own restaurants. We test things. I have a restaurant here in Austin that I've gone through five different point of sales in 18 months,
Jeremy:yeah. The staff's ready to kill you. I'm sure
Johann Moonesinghe:Oh yeah, absolutely. But it's important because then we can, we understand the point of sales. We understand the integrations that we're building. We also can make recommendations to people like, okay, you're this size group. Maybe this point of sale makes sense to you. you're this size. This probably makes sense. Here's the additional software we recommend you use, you don't have to use it, but we
Jeremy:these are things that we've found to be successful, similar to the tech side. You know what I mean? That's the, it's amazing. I, a couple of years ago I got the first, my first opportunity to spend any significant time in Silicon Valley and I was like, this is like no place I've ever been in my life because just, there's so many people that you're walking through the coffee shop and it's Oh, that's the guy that was, early stage at, Facebook or meta or, whatever. And it's Oh, this is pretty cool. But you get, you almost, it almost falls off. No different than some of the tech, some of the restaurant incubators, when you spend time around successful restaurateurs, they're doing a lot of the same things. They may not be exactly using the same tools, but they're doing the same. they're buying food in certain ways. They're producing food in certain ways. They're hiring in certain ways. They're doing a lot of the right stuff.
Johann Moonesinghe:absolutely. I think that's the, that's one of the biggest advantages that I have. as CEO of in kind is I get to spend so much time with CEOs of restaurant groups, individual owners of restaurants, I just see. So much like across big groups to individual owners that with their learnings and how should we think about ghost kitchens all the way to, delivery to how do we buy product better, right? Like technology that we use other ways to finance, right? And I think that's the advantage that we have. And then I also own my own restaurants, which makes sure that I'm like always cutting edge, right? So we're testing the best social media marketing, right? We're testing all of these things that are restaurants that we can then create learnings and share back with other restaurants, right? Or even alcohol manufacturers. Like we did a experiment where we gave a free glass of Krug one day to a bunch of people coming into the restaurant. It turned out. That was actually a profitable giveaway because our psalm would go in for the Krug, which, and then the person would be more likely to buy a higher price bottle of wine because they weren't intimidated because they were already having a conversation with the psalm and the psalm could steer them towards a bottle of wine that was a little more expensive. So we did a lot more wine sales that day, even though the cost of the Krug, was quite high. was expensive, but it's still made up for it. But the additional wine sales. So I wrote a white paper on that or the team did and we send it back to LVMH, so as a way to try to get LVMH to sponsor Krug in some of our other restaurant partners, right? Cause that's like a triple win, right? It's a win for them. so things like that. It's just like having our own restaurants allow us to try those things. And we don't, obviously, if somebody else's restaurant, we can't take risk on their restaurant, so we take the risk on ours, see what happens. So a lot of ideas don't work. a lot of, I put a point of sale in that is, very, it's great if you have 500 locations, if you have one location, it's very
Jeremy:it's very challenging. and it's funny that you bring that up because, I love entrepreneurs that scratch their own itch. And so it's always fun to have, to have entrepreneurs that not only are building solutions, but they live those solutions. They, that, that old adage, you eat your own dog food, you're using the tech that you guys are, you're using the platform that you're building. Let's dive deeper into that. Cause, I didn't get confused, but I think I could hear my listeners going, is he a tech company? Is he an investment company? Is he a restaurant company? And the answer is yes. And, I'd love to walk through what that, walk through again, what is in kinds, I know what their purpose is to help restaurants continue to scale by helping offer finance, but talk to me about how it's so different than what. All of the traditional formats are that are out there because I think, it's just a very unique value proposition and then adding kind of your experience on the tech side really helps, accelerated,
Johann Moonesinghe:yeah, definitely. So there's two separate businesses as the in kind and then there's my restaurants that I own and the investors, as like in kind, which is this tech company don't want us to own restaurants. They're like we're not investing in restaurants for investing in a restaurant tech company.
Jeremy:Yeah. Valuations are very different. The way you measure sales are very different. Yep.
Johann Moonesinghe:Yeah, so those are separate, but on in kind side, I think, what we are today is this kind of two ways to think about what we are. One way to think about us is that we have invented a better way to finance
Jeremy:yeah.
Johann Moonesinghe:So we've invented this thing, like it's like we invented the mortgage or we invented a lease, like we invented a financial instrument and it's backed by a consumer marketplace. Right? Another way to look at in kind is that we're a consumer marketplace connecting millions of consumers with thousands of great restaurants, and a lot of people have tried to build this because as we all know, there's a trillion dollars and spend just in the U. S. And restaurants. It's a massive industry. The hard part of building the marketplace is actually getting the restaurants to sign up. So if you excuse me, if you're like a seated or a group on or a a lot of these other guys that have tried this, they can't get high quality restaurants on board because the restaurant is I don't want to sign up for a buy one, get one free customer, right? That's not the, that's not where, place I want to be. The guys that have really solved this are like DoorDash. DoorDash realized that restaurants need delivery and they're not going to create their own delivery solutions. So they created a delivery solution and Thousands and 10, 000 restaurants are on DoorDash and, millions and millions of consumers are ordering delivery on DoorDash, right? And so they were able to build the marketplace because they understood what restaurants needed. We, over the last 10 years, realized that restaurants need a better way to get financing. We've spent many years inventing that better way to get financing. And that's the way that we add restaurants to our marketplace is that we basically finance them, put them on the marketplace, and then we send them customers. Who know that all the restaurants that we finance are going to be good restaurants. So if you go and find a restaurant in kind and you go in, you're going to like it, and you're getting some additional value across the whole network. So it's like a loyalty platform for all the restaurants and the restaurants love it and the consumers love it. And that's what we built. It's taken 10 years, like there was, and there was no way to do it faster. I don't think, and but that's where we are. And then, the tech multiples are good. And, I think there's a lot of restaurant tech companies that understand like selling to restaurants is really expensive. It's very fragmented, it costs a lot. And, and then also on the other side, finding consumers is really expensive. And so what we needed to do was figure out something that's so compelling to restaurants that I didn't have to go and spend two, three, 4 billion to try to find all the restaurants.
Jeremy:out knocking on doors of restaurants every day. So as a restaurant, what kind of. What kind of, you talked about banks. Typically they'll look for collateral. They want to de risk like crazy. What kind of things are people using the capital for? Is it, is it project based stuff? They need a new, they need a new venue. Is it that they need to build out a patio to increase their top line sales? Is it a marketing campaign that they're looking for capital for? help me understand what are some of the uses that some of these restaurants are even coming to you looking for capital, right? While they're in this, this, this desire to, to grow. Cause I'm assuming they're looking to do it, to solve some problem that they have internal to their business. And now a word from one of our sponsors. Every restaurant operator understands the chaos of a Restaurant kitchen during the meal rush restaurant technologies, oil, total oil management solutions, and end to end automated oil management system that delivers filters, monitors, and recycles your cooking oil, taking the dirtiest jobs out of your kitchen and letting your employees focus on more important tasks. Control the kitchen chaos with restaurant technologies and make your kitchen safer. No upfront costs to learn more, check out rti inc. com or call 888 796 4997. Growing your business can mean big time logistical questions like, how am I going to keep up with all these local deliveries? Let UberDirect offer you a helping hand. With UberDirect, you can take orders on your website, via app, or by phone. Then drivers who are part of the Uber courier network will pick them up from your store and deliver them to your customer's doorsteps. Sounds simple, right? Delivery just got better with UberDirect. Check out uberdirect. com to learn more.
Johann Moonesinghe:yeah, usually it's growth almost always they're opening. They have 10 units. They want to open an 11th. They have one They want to open their second. They have zero units or open their first like growth of units is something we love to finance It could be though that they want to build a patio because that's going to increase revenue, right? So that will financing that could be a better wine program. We can finance that We can really finance anything. We like to understand what they're using the capital for, and we love things that increase their revenue or reduce their cost. So we can use our capital to pay off like a high interest loan as an example, so that they're keeping more of their cash. we've had restaurants take our money and pay their investors with it. And that way it gets closer to the flip. So to where the owners are starting to keep money. So for us, it's all around like, how do we get the owners to make more money, to keep more money in their pockets, to send their kids to college, right? that's the goal. So we'll fund anything that eventually gets towards that goal. I think you're a very successful restaurateur and you're generating a ton of profit, but you still want in kind funding because it's better than using your own capital. You can use our money for anything. You could, I guess you could buy a Lamborghini
Jeremy:If you really want it to.
Johann Moonesinghe:really wanted to, but it's usually gross.
Jeremy:Got you. Okay. And then on the flip side, as a consumer, what does the experience look like? I, again, I'm a business traveler. I, I, I travel, 30 weeks a year, and I'm, all over the place. How do I get involved in the platform? again, if I'm a restaurateur out there and I want to get access to capital, you talk through a little bit of that and we'll talk a little bit more practically before we wrap up. But if I'm a consumer, why am I gonna go to an in-kind restaurant versus the latest, latest hot restaurants, Austin, type thing. If you guys aren't on that, if it's not on the in kind platform, why? Why would I want to jump into that as a consumer?
Johann Moonesinghe:Yeah, so if you're a business traveler, you're like, you're probably the one of the perfect fits for InKind. you probably, your company pays for you to stay at a Marriott hotel. And then you take all your merit points and once a year you take your family out on a great vacation, right? A lot of in kind users do the same thing So they go and their company's paying for a meal and you're taking them, clients out and it's a thousand dollar meal You basically you pay through in kind you pay the thousand dollars you expense it to your company and you get Between 150 or 200 back in credit that then you can go and take your family out for dinner, right? So there's a lot of business users that using kind to expense their meals and then use the credit to go and take their families out. I ran into a couple yesterday, and she's Oh, my gosh. You saved my boyfriend because I love eating out at expensive restaurants and he gets to save money using in kind. And so he takes me out to these great places. they're in their twenties, younger couple, and I think that's another use case, right? So we'll know that every restaurant on the in kind app is a great restaurant because that's the only ones that we had.
Jeremy:huh.
Johann Moonesinghe:And therefore they're like, okay, cool. I can discover. and as we're, as we understand how you like to eat or where you like to eat, we'll actually make recommendations to you about places we recommend that, you go to based on what you buy. So if you buy a lot of high end white burgundy and you're a user. We'll recommend restaurants to you that have a great white burgundy list, right? So we're we have granular skew data on what people are purchasing so that we make recommendations And then we can also tell our team Hey in Scottsdale go find go sign up these restaurants because our users I know based on the data of how they're spending money want to go to these types of
Jeremy:Yeah. And now it's very targeted that says you're going to find Carbone because Carbone is one of those places when you're in Dallas, if you haven't been, and I would highly recommend it. I know we talked about this pre show. amazing experience. And flipping that around, cause we've had a couple of people that have talked about CDPs and or data. I happen to have kids. I happen to have four kids. My. My expense account is very different when I'm home with the family than when I'm on the road, have you guys figured out how to manage that? Because again, when I'm home and I'm running around softball practice and I don't, all of the things that we do in life, it's always a different experience for me versus when I'm, When I'm on the road or even when I'm hosting somebody in town, cause I'll have people flying to Dallas and we'll take them out to a nice dinner or whatever else. And so very different experiences when, depending upon which side of the fence you're on during your meal experience. have you guys had to encounter that?
Johann Moonesinghe:Yeah, absolutely. and it's hard then to, to figure out, yeah, exactly, because people are eating in different ways. I think, with AI, ultimately, the moat, the barrier, the thing that matters is the data, but we're not going to build a better LLM, right? we're just not going to spend billions of dollars doing that, right? But, but we have the richest data set. And so we're able to marry great LLMs with good, rich data. We're not exactly even where I want to be. Obviously, we're continuing to invest heavily in this. Hopefully sometime next year, in kind, basically as you open up the app and you tell it, Hey, I want to have a work dinner in Dallas for four people next week, where should I go? And it tells you exactly where to go. That's great. And then, hey, I want to take my four kids out in Florida when we're there next week, for Disney World, where should we
Jeremy:Yeah. No, that, honestly for me, selfishly, I love that'cause I end up doing the hack around on Google. if it's a city, I don't know, or I ask the, the concierge at the hotel at that same area you're talking, Hey, I got a dinner next week that I gotta go do. so you call around or you do the Yelp, Google review thing in order to try and figure those things out. I love that you guys are filtering and making sure that it's gonna be a good experience for the, for those patrons. Yeah,
Johann Moonesinghe:we're not there yet. We're still building a lot of that, but we have the data set. And so that's the, that's step one. and, but that's, yeah, that's a lot of the fun of what we're doing is we have such great restaurants. We have access to reservations, priority tables, all these things. So how do you surface that correctly to the user? Yeah. All about that. Eventually what in kind should be is, Hey, I'm going to have, I'm going to go to Vegas next week for a bachelor party. what should I say? Where should I eat? What show should I see? And all of it gets booked through in kind and, you just go and you have a drink.
Jeremy:that sounds amazing. that's a pretty cool vision. So if I'm here, I'm Perry steakhouse. I think they're based down, down in Houston or maybe down by you guys in Austin, I'm Perry's and I got 15 restaurants and, high end business dinners, and I want to be on any kind, what does that look like? How do I get involved? How do I, I'm looking to open up a new store. I'm opening up my new. Mexican concept. And I want some capital, going to the bank or using my own capital just doesn't make sense. What does that look like? How do they engage with you guys? How do they figure out what that looks like to, to do that? It's a menu expansion. It's a wine expansion. All of the different things that you talked about, what would that engagement look like if I was the CFO of that brand or the owner of that brand?
Johann Moonesinghe:Yeah. if it's Perry, you would just give me a call. Cause he has my cell phone number. most groups, I think, their CFOs either know of us or have. No, another CFO that uses in kind to usually what happens is somebody calls another CFO and says, Hey, what's your experience with in kind like, And then they make a referral to our team. So we don't, there's a lot of inbounds. We have a website in kind capital. com. people can go there and apply, but if it's a bigger group like that, usually, the community is not that big, right? There aren't many Perry's type restaurant groups in the country. so they usually, they know how to get ahold
Jeremy:selfishly, I like to use that one because anytime there's a Paris in town and I got an expense account to go eat dinner, they do a fantastic job. and, they do just an amazing job. I think I've been to, I don't know, 12 or 13 of their restaurants of how many ever they have. I don't even know how many they have, but, but it's always a, I have not been to their new Mexican concept that they opened in Austin. Is it any good? Have you been,
Johann Moonesinghe:I have been, yeah. Perry's, steakhouse is right by our office, across the street. I had been to the. to the New Mexicans. Very good. It's very good. Austin is a little tricky because we have such good Tex Mex and Mexican, we have And so it's it's there's so many great barbecue and Tex Mex places in Austin and so it's hard. I think that's a hard category to be the best at, but Paris does a great job but we have Suerte,
Jeremy:Yeah. Oh, no. I, anytime I get down there, it's either barbecue or Tex Mex for sure. so you talked about it. so getting on the website, is that kind of where you want people to go if they're at a place where, you know, where they're like, Hey, this sounded really interesting. I, I just heard this podcast. What do you want them to do next? How do they get engaged? How do they figure out if this makes sense for them and for you guys for that matter?
Johann Moonesinghe:Yeah. Yeah. If you, if you're a great restaurant, we, and you're expanding or you want capital to grow, in kind capitals is a great website to go to. It'll get filtered to the right person. if you're thinking of opening a restaurant, you could, it's probably better to reach out to us earlier. not that it really matters, but we can help, we like to help in any way that we can. Sometimes I think people sign leases and they don't really make sense and
Jeremy:They pick locations that don't make sense. They don't understand parking. They don't understand triple net leases. They don't, this is one of the things that I love about what you guys are doing is not only have you personally done it, but you've now been on the front lines of, 3000 restaurants. At this point, it sounds your team has, so you guys are at a place where you guys, and there's very few people that have gotten that much access to that many different brands doing different things.
Johann Moonesinghe:Yeah, exactly. And that means I've seen 3, 000 leases, there's a lot of data that we just have access to that we, that we can help other people make better decisions. Hopefully that's the goal, right? The goal is if the only way that I lose money is if I give a restaurant money and I buy food and beverage credit and the restaurant closes. If the firm closes, then I can't sell the credit, obviously it's
Jeremy:Yeah, you don't do a whole lot with them,
Johann Moonesinghe:yeah, but our loss rates are less than 1%.
Jeremy:which is
Johann Moonesinghe:So
Jeremy:Yeah. none of your friends in Silicon Valley have a less than 1 percent loss rate. That's for sure. I got a bunch of unicorns that made a whole bunch of money and they're 98 percent loss rate on certain things, in certain categories, but the one or 2 percent that just hit it big are there. that's a very, that's a very compelling argument that I would say as restauranteurs that people should consider. Cause it's, There's nothing else like that out there. do you guys have any competitors, before we wrap up? Is there, are there a lot of, I know there's other restaurant investment firms. I know there's kind of incubators that you can come to. I know the guys up here in Dallas have the food hall concept where you can, put a brand inside of a food hall and see if it's going to launch and they might help you find a property or two, but nothing at the scale it feels like that you guys are doing that I've heard of, but maybe there's a bunch out there. I don't know. Yeah, that's
Johann Moonesinghe:really isn't. I don't think anyone was crazy enough to spend 10 years trying to solve this problem. but I think we partner with a lot of like restaurant private equity guys because, we help fund the growth of their groups, so we partner with a lot of people don't have any competitors. there's banks that say, Hey, look, we're not really doing loans right now to restaurants, but hey, go talk to the in kind guys. I'm sure that they can help. And so. we actually purposely tried to not compete with anyone. We just partner with everyone. and that's, yeah, that's a good way. Cause, and ultimately, usually we can't, unless you're a big group, it's hard for us to fund the full expansion of another restaurant, right? If you get 5 million from us, we don't, you and you have one restaurant. It's hard for us to fund 5 million because that means that we're buying it. So much, we're sending in so many guests in order to sell the credit that we buy that it'll hurt your cash flow, right? We don't want to, we don't want to fill your seats with in kind customers, right?
Jeremy:It needs to be a smaller percentage of the total overall, overall penetration because they wouldn't be able to make payroll, if it was all in kind of customers got you. That makes sense.
Johann Moonesinghe:Yeah, exactly. So we'll, on off hours, on a Wednesday or Tuesday, we can send in more people because you have more empty tables, but on Friday or Saturday, when you don't have as many empty tables, we don't want to send in more than two tables, those kinds, that kind of a thing. So we do that balance because ultimately, like I said, if the restaurant closes, we lose money. So we do everything we can to make sure that the restaurant stays open and helps them. and then that's why, yeah, that's why our loss rates are so low is because we're really careful. We're not. most people that are financing restaurants, they think about, okay, how do I get my money back? The most important
Jeremy:Whereas you guys are trying to figure out how to get the restaurant to be successful, which is a very different paradigm. And you guys are trying to help coach them, whether it's on the lease or on the operational model or on the location or menu selection or driving some of those things, which is a very different model. and then the other piece that I love that you guys do and you said it early on is you find restaurants that you want to go to, you find restaurants that the community wants to go to, you're not funding some harebrained idea that somebody got, a death benefit from grandma that decided they wanted to be in the restaurant business and have no clue what they're doing. They really get, they really get it, is what it seems like.
Johann Moonesinghe:Absolutely. And the first thing I usually tell people who want to open their first restaurant is don't do
Jeremy:Yeah,
Johann Moonesinghe:idea.
Jeremy:huh.
Johann Moonesinghe:It seems glamorous, that's actually what was the best part of having the incubator is I, they would come in and for three months, it'd be like, this is horrible. I'm not going to open a restaurant. And that's way better to learn. In a no risk environment, actually opening a restaurant and signing a 10 year lease and three months in being like, this is
Jeremy:This is a lot of work. Yeah. and, there, that's the reason why there's, restaurant impossible and, bar rescue and all of these different shows on TV because people get stuck in that same, that same world. I love the fact that we got connected cause I'm excited to, to hear about the continued success for those guys. for you guys as a brand, really the tech behind it. I guess the last piece I would just say to you is what's next. Is it getting into different verticals? Is it just growing into different, different geos help me understand what's next for in kind, where are you guys going and what do you see three years from now, five years from now, 10 years ago, you guys started this thing. What, what does the future look like?
Johann Moonesinghe:I think that, we're super laser focused on restaurants right now. There it's such a big market. and it's just adding more and more great restaurants and, scaling our infrastructure to be able to do that. you can imagine I'm raising a lot of capital because I have to fund a lot of capital to restaurants. And My time has been doing that, but I think eventually with the future is there's, hotels, there's restaurants, there's nail salons, there's, there's all types of businesses on the in kind platform and the consumer, we know what they like. We can drive them into places that we know they're going to like, that's the, I think. we eventually replace Google Maps, right? That's the way to discover what you want to do and obtain a place. I think that's the future. And, right now we're just focused on restaurants because it's just such a, it's a big market.
Jeremy:Yeah, no, I love it. And, I'm glad that, glad we have you on the show and you can share some of this stuff. thank you for your time, to our listeners, guys. We know that you guys got lots of choices. So thank you guys for spending time today. Please go check out Inkind Capital, see if it makes sense for you guys and, have a great day.