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Tock CEO Nick Kokonas on adapting the business during COVID-19: 'There are opportunities to be creative'

Nick Kokonas, Tock CEO and The Alinea Group co-owner, joins The Final Round's Seana Smith and Myles Udland to share the changes his companies have made during COVID-19 and how he is preparing for seated dining in the winter months.

Video Transcript

SEANA SMITH: Welcome back to "The Final Round." Well, the restaurant industry has been among the hardest hit from the coronavirus pandemic. So for more on that, we want to bring in our next guest. We have Nick Kokonas. He's a co-owner of The Alinea Group. He's also the CEO of Tock. It's an online reservation platform for high-end restaurants.

And Nick, it's great to have you on the show. I know you pivoted your business, specifically-- I guess both businesses, when you take a look at what you did with your restaurants. But first, I want to talk about what you did with Tock because it was originally a reservation-- online reservation platform and then pivoted and started helping restaurants with takeout orders. So now that we're six months into this pandemic here in the US, how is your business faring, and how is that transition going?

NICK KOKONAS: Well, it's become very important work. And you know, what we realized very quickly is that as reservations plummeted to zero in Asia and we saw that on the platform and then on the West Coast in the United States, we recognized very quickly that restaurants were going to have to become innovative. We're going to have to rely more on elevated carryout, unique experiences that they can offer, even calls like this that we're doing via Zoom with the chefs teaching people how to cook, whatever it is that they could do creatively.

Since April or so, we've added about 3,500 restaurants in the United States to the platform. We've about doubled in size. We sell about $2 million every day of food, you know, processed through the system for these restaurants. And then as-- what we've noticed is that millions and millions of diners have come back in the warm summer months to safely dine outside on the patios at a reduced capacity, depending on where you are in the country. So every day, you know, 1 million diners through the system book that as well.

Right as the northern climates are going to start getting cooler-- I'm in Chicago-- it does not take a crystal ball to realize that patios will not be a good option come November, December, and certainly not in January, February in Minneapolis, Cleveland, Chicago, and New York. So I think unfortunately, what we're going to see again is being previewed for us in London a little bit, where they announced today that there are new restrictions on pubs and restaurants. And of course, I hope that's not the case.

But we do encourage, for our own teams and my restaurants and all the restaurants that we work with, to look ahead a couple months and be innovative, be proactive, come up with some experiences around the holidays, around Thanksgiving to create some way of having that emotional bond with their clients. And that's what we're encouraging again. And you know, winter is coming, as they say.

SEANA SMITH: Yeah, winter certainly is coming. And Nick, I mean, this is such a tough thing for so many restaurant owners, I mean, because it varies just in terms of their access and what they can do at this point, how-- I guess their ability, really, to explore other options. But with your businesses specifically, with your restaurants, when you take a look at-- the weather is going to be changing very soon in Chicago. So what is your plan to operate when the weather does change?

NICK KOKONAS: Well, during the summer, for Alinea, which is a really high-end restaurant, we rented a rooftop and put a tent up so we could serve people every night very well spaced out, a lot of social distancing. So we had 80 seats in something that could hold 300. We haven't announced it yet, but I guess I will now. We found another space for the winter in a hotel that normally seats 350 to 400 that we're going to put 80 seats in for November and December, for the holidays and whatnot-- again, utilizing underused spaces that do have kitchens and whatnot. And honestly, you know, it wasn't that hard because there's a need for someone to take that space too because the hotel isn't using it either.

So I think there are opportunities to be creative. There are empty events spaces, empty hotel ballrooms, there's theater spaces where we can do this safely and very spread out. We're not talking about, like, you know, six feet. We're talking 15 feet between tables.

So-- and then we're doing a lot of carryout experiences. We're going to have an election night to-go experience, all Americana food. And you get both whiskey and champagne. So you can either toast if you're happy or drink your sorrows away if you're not or, I suppose, do both if we don't get any results whatsoever.

We also procured about 2,500 turkeys from Heritage Farm in Minneapolis-- Minnesota, sorry. And we've already begun selling that experience where you get a turkey. We're going to teach you how to cook it properly, which no one ever does. It always gets dried out and awful. And we're going to make sure that you can't screw it up, and then we're going to do all the sides for you.

So we're trying. And you know, we're open source. Like, we show all the other restaurants, hey, this is what we're doing. This is what we're going to try. We don't know if it'll work. We've sold, you know, a couple hundred of the turkeys already, and it's two and a half months out, so--

RICK NEWMAN: Hey Nick, I want to pick up on that. So when you say you're happy to share your ideas, I mean, what is obviously going to happen here is some restaurants will survive but many will not. I mean, there's just not the market for them right now. And a lot of them, they're at 1/4 capacity or 1/4 their current revenue. Is anybody creating, like, a survivors' template for restaurants that says, you know, here are some options for what you can do, here are the best ideas from the industry about how to adapt, how to get through the next 12 months, if that's what it means to be? Anything formal like that going on anywhere?

NICK KOKONAS: Well, you know, I-- with Tock, with all of our clients, we share best practices. We charge only 3% for Tock To Go, as opposed to some of those delivery apps. And we do have white papers that we share with prospective clients and enterprise clients and whoever is on the platform to try to create a community. It's not competition. I mean, you know, if someone buys carryout from my restaurant today and they buy it from yours tomorrow, it doesn't hurt me at all. It's not a zero-sum game, you know?

People are craving-- I know I am, too-- craving the community and the socialization of going out to dinner with your friends and family. And while we can't necessarily do that, we can create some shared experiences. It's not the same. It definitely is not the same. But then again, with kids back in school and what not, people are cooking less again. So we saw a huge dip in July and August--

SEANA SMITH: Yeah.

NICK KOKONAS: --in carryout, and now it's screaming back up very quickly as the weather gets a little cooler. But yeah, we're happy to always share. You can always email me at Nick@TockHQ.com, and we'll have our team share the best practices. There's so many restaurants doing cool things around the country.