Can NFTs Really Save the Restaurant Industry?

As the COVID-19 pandemic nearly decimated the restaurant industry, leaving business owners scrambling to make money on meal delivery and employees floundering through furloughs and layoffs, certain entrepreneurs tried to think of ways to keep their favorite businesses afloat. An emerging, semi-controversial methodology has to do with crypto and the blockchain.

This week, author Maya Kosoff tweeted a screenshot of a listing for the Dame seafood restaurant in Greenwich Village that includes an interesting sidebar—reservations at the popular Dame are hard to come by, but guests have the option of purchasing a specially made, $1,000 NFT offered by the restaurant that allows priority booking through the Dame’s Affable Hospitality Club . The Daily Beast reached out to Dame for comment.

“I’ll bravely say it: NYC restaurant reservation culture has gone too far,” Kosoff commentedand many respondents to her tweet seemed to agree.

But Phil Toronto, co-founder of Front of House, the curation platform for “off-menu digital collectibles … for people who love restaurants” says the work FoH has done for Dame, Emmet’s on Grove and Hanoi House (all located in New York City) establishes fresh revenue streams for the eateries we all want to see survive.

By offering diners extra perks like quarterly tastings, priority reservation access and custom birthday cakes with the purchase of a collectible NFT, restaurants increase their chances of converting casual visitors to regulars, Toronto said.

The Daily Beast reached out to Emmet’s on Grove and Hanoi House for comment.

The NFT reservation idea comes at an interesting time for the restaurant industry. Because of inflation, says Union Square Hospitality Group founder Danny Meyer, many restaurant workers who fled the industry during the Great Layoff are being lured back to their eateries by higher tips.

Similarly, while the more expensive restaurants suffered during the peak of the pandemic, the fast-food chains are doing better than ever: in June of this year, sales of fast-casual restaurants increased by 14.4 percent, proving that in times of uncertainty, Americans are turning to comfort for Big Macs. In other words, restaurants are far from dead, but elegant metropolitan eateries may need a boost.

“My day job is in consumer venture capital, and right before the pandemic, the idea was to put together a fund for restaurants and kind of operate in a similar way that tech startups do, where we provide additional services to restaurants,” Toronto told The Daily Beast. “The idea evolved probably a year into the pandemic when NFTs and collectibles started to take off. We thought, ‘Hey, we could drive some revenue to restaurants from this crazy fake internet money.'” The underlying desire is just to make a restaurant business model more robust, and drive different revenue streams to those that don’t require seating diners.”

In addition to the benefits, of course, when diners purchase an NFT, they also add a piece of digital art to their collections.

Front of House just went live in June, so it’s a little early to tell if the NFT reservation idea has long-term potential, but Toronto is optimistic. “Our business model is that the restaurant gets 80% of all revenue and we take 20%, just for the heavy lifting of minting the NFT and organizing the arts,” Toronto said. “But the majority of the proceeds go to the restaurant itself.”

“This is such a new thing that we’re not seeing widespread adoption,” Kelly Healy, marketing and member relations for the New York State Restaurant Association, told The Daily Beast.

When reached by The Daily Beast to ask if he would consider implementing an NFT reservation program at one of his many eateries, including Balthazar, Pastis and Minetta Tavern, iconic NYC restaurateur Keith McNally had this to say: “What is an NFT?”