Restaurants by night, office space by day
Unique startup lets eateries become haven to nomadic workforce during normal business hours
Marben general manager Zoran White is usually the only one tapping away at a computer in the King West restaurant while it’s closed during the day. He spends most afternoons emailing clients, purveyors and staff, surrounded by empty plush booths and bar stools, until service begins at 5 p.m.
But lately White has had more company — Marben has joined a small group of other Toronto restaurants in offering their bar and dining tables to the nomadic workforce: startups, freelancers and remote entrepreneurs in need of desk space.
Marben, nearby SpiritHouse and Liberty Village restaurant Locus144 have partnered with Flexday, a new Toronto startup by Justin Raymond, the man behind the now defunct taxi hailing app Hailo, to allow its members use of their spaces — idle during the day — as a co-working office.
Last month, Raymond says more than 450 people came to work at Marben and SpiritHouse during an open house to promote the startup.
And Flexday is in talks to partner with more restaurants, including spots in the downtown core, Leslieville, the Ossington Ave. and College St. areas, and in Hamilton.
Though White wouldn’t say the exact amount, he says Marben’s compensation is relatively small.
“Whenever there’s an opportunity to utilize space, vehicles or homes — anything that is sitting idle — it’s very intriguing to me.”
JUSTIN RAYMOND
FLEXDAY FOUNDER
But, for increasingly strapped restaurateurs, Flexday is another avenue to improve the bottom line while getting people in the door, even if it’s not to eat food or sip cocktails.
“I love the hell out of it. I didn’t see any downsides,” says White, on the decision to join, noting it is “zero cost” to the restaurant. Flexday staff open the space early in the morning, brewing unlimited coffee before Flexday clients arrive to work at the restaurant tables. “We don’t have to staff it — that’s the best part,” White says.
White says Marben may hire a barista down the line and provide snacks to enhance the Flexday experience. “Sandwiches, muffins. What you would get at a coffee shop, but a little bit more elevated and less expensive,” he says.
Flexday is among the latest in sharing economy startups, but not the first to look at empty restaurant space. New York-based Spacious offers $95 monthly or $999 US annual memberships for access to more than a dozen restaurants across Manhattan, Brooklyn and Jersey City. Austin-based Switch Cowork offers a $49 monthly membership for space at select bars and restaurants. Australian startup TwoSpace takes over restaurants in Sydney and Melbourne for a $169 AUD monthly rate.
Flexday founder Raymond says its memberships, now offered at an early bird rate of $70 per month, will go for $95 per month.
This is Raymond’s second entry into the sharing economy — in 2012, he launched Hailo, the global Uberstyle taxi hailing app, which he discontinued in 2014 due to stiff competition in the market.
“Whenever there’s an opportunity to utilize space, vehicles or homes — anything that is sitting idle — it’s very intriguing to me,” he says. “I think that the real-estate industry is a great example of new opportunities that exist from idle space.”
And for restaurants, he says, there’s nothing to lose in the partnership. “It’s a great win-win relationship,” he says. “A lot of people are first-timers that have never walked into the space, so they get to experience the decor, the ambience, the atmosphere and get exposed to a new menu for dinner or cocktails.”
That’s the key to the partnership for Len Fragomeni, general manager at King West’s SpiritHouse.
“It’s an opportunity to get more people in the door,” Fragomeni says. “It’s not a be-all-end-all for us. But it’s great to have a little bit of additional revenue for a space that’s not being used all the time.”
Food trends expert and trained chef Dana McCauley understands the im- pulse to have an open-door policy in the difficult restaurant industry.
“The way rents are in Toronto and Vancouver, you really can’t afford to close between lunch and dinner the way restaurants used to,” says McCauley, executive director of industry incubator FoodStarter. “The whole restaurant model is really broken. You’ve got increasingly expensive ingredients, increasingly expensive staff.”
Flexday is coming into an industry struggling on a variety of fronts. Labour costs are rising due to the Ontario government increasing the mini- mum wage to $14 from $11.40 an hour next year, and to $15 in 2019, while food prices have been on a continual rise year to year.
Since there is no rent control on commercial real estate, storefronts on some of the city’s trendiest streets are closing up shop as the surging real-estate market leads to higher rents.
According to the Queen Street West BIA, some 130 businesses closed their doors over the last three years. And some commercial tenancies across Toronto are facing property tax hikes as high as 500 per cent.
McCauley says the industry has also had to evolve with consumer habits, pointing to fast food spots such as Subway offering breakfast and more restaurants signing up for delivery apps such as Uber Eats and Foodora.
“Everything about going to a restaurant is not quite right these days,” she says.
“Restaurateurs have to do what they can to try and find some margin anywhere. If opening the doors to people who want to use the space when you’re just in the kitchen or not there at all helps, more power to them.”