Restaurants embrace apps that allow patrons to order with their phones

Like everyone, Cris Jucan has had his share of frustrating restaurant experiences. He remembers one vividly, a few years ago, when he and his friends were sitting around on a patio waiting to order drinks.

They joked that one of them should call the restaurant – on the phone – and ask that a server be sent over. That's when the veritable light bulb went off.

Mr. Jucan, with his background in IT, wasted no time in founding Tacit Innovations, a startup that would seek to improve the restaurant experience by allowing patrons to browse menus and order meals with their phones.

"That was the trigger. So many times you wait and you know there should be a better way of doing it," he says.

Mr. Jucan launched the company in 2012, with two products following. Restaurants license its Maegan platform, which they use to create menus and automated payment systems for smartphones. On the other end, patrons can use the free app for Apple, Android and BlackBerry 10 devices to browse, order and pay, with delivery options as well.

The company has found willing customers, with Toronto restaurants including Gusto 101, Fresh and Magic Oven coming on board. Food service provider Compass Group Canada and other large chains have also signed up, putting Tacit Innovations on pace for 2,500 locations in Canada by the end of the year, Mr. Jucan says.

The demand for technological solutions to restaurateurs' problems is there – startups just need to know how to address it, he adds.

"All restaurant owners want to take advantage of new technology, but they don't have the money or a way of utilizing it. It's not their core competency."

Toronto-based Tacit Innovations, now up to 15 employees, is one of a growing number of companies tapping into the increasing tech savviness of restaurant owners and their desire to improve efficiencies, profits and customer experiences.

The trend is happening in line with dining habits. Restaurant traffic is down about 1 per cent this year from 2014, according to tracking firm NPD Canada. In actual terms, people are frequenting restaurants about 10 per cent less than last year.

Consumers cut back on their spending during the economic downturn a few years ago and haven't yet bounced back because of a cultural shift that's under way. They're now demanding more from restaurants.

"This really makes it a competitive landscape," says NPD executive director Robert Carter. "There's a lot of focus on how technology can play a role in delivering that best customer experience."

Toronto-based TouchBistro is taking a similar approach to Tacit Innovations with software that enables table-side ordering on iPads. Founder and chief executive Alex Barrotti had a similar experience to Mr. Jucan, where a friend who owned a restaurant in the Caribbean was struggling to get orders from his patio to the kitchen in a timely manner.

It was right around the time that the iPad launched, in 2010, so Mr. Barrotti got to work on a technological solution.

TouchBistro allows servers to punch in and relay orders back to kitchen and bar staff so that meal and drink preparation can begin immediately. That way, staff can start serving large cohorts before everyone in the group has even finished ordering.

The company has seen similar quick growth, with a 120-per-cent increase in monthly revenue over the past year, Mr. Barrotti says. TouchBistro raised $3.5-million in seed round investment in 2013, and this past March raised $6-million more in Series A funding, which has helped it expand to 54 employees. The company opened an office in New York last year.

Mr. Barrotti says technological acceptance is happening on both the restaurateur's and consumer's end.

"If someone came up to you a few years ago with an iPad, you'd be surprised. But now it's like, 'Oh, they're just taking my order.'"

Other Canadian companies are rising to fill in the gaps between restaurant owners, their servers and customers.

Calgary-based eThor has attracted investment from Dallas Mavericks owner and Shark Tank personality Mark Cuban, among others, by creating software that connects the digital wallets consumers have on their phones with restaurants' payment processing systems.

What the company does is invisible to the average person, but it's integral to the growing number of device-based menus and apps.

Boston-based LevelUp, which powers mobile payments for 14,000 businesses, and Sweden's SeQR – the largest mobile wallet provider in Europe – are both customers. Founder and chief executive Gary Ziegler says 2,600 companies in 30 countries have signed on with eThor, although not all of them are live yet.

As with other restaurant-oriented startups, Mr. Ziegler is finding a big appetite for his software.

"Some of them look into doing it themselves, but they quickly learn that it's not really feasible," he says. "We had instant demand."