1. FOODITOR RADIO IS ALL DRESSED UP AND HAS NO PLACE TO GO

You’ve heard Nick Kindelsperger saluted on my podcast for his forays into farflung Indian or Korean dining. Now I talk to the Chicago Tribune writer (furloughed when we chatted) himself, about what we’re cooking for our families at home, exploring Chicago’s suburbs for the good stuff, covering food in African-American neighborhoods and more. Listen here or here:

2. THE CLICK OF THE TOCK

Tock has been the one bit of Silicon Valley, VC-money excitement-hype on our restaurant scene—reinventing the restaurant reservation business with a level of paradigm-shifting innovation that the dinosaurs (like Open Table, wedded to an older platform) couldn’t match. At least that’s the spin—owner Nick Kokonas has projected the total self-confidence of a tech CEO, with a slick answer for every objection. The service was built originally to solve the fairly rare problems of Alinea and Next, which routinely sold out but (like most expensive restaurants) saw what they felt were high no-show rates. By selling tickets, as for a concert or a play, in advance, Tock both inhibited cancellations (by shifting the pain of not showing up to diners) and allowed restaurants to collect the money for luxe ingredients and high staffing up front. But Tock eventually created the flexibility to serve restaurants at all levels including, most recently, becoming a convenient to-go platform.

But hold that thought about allowing restaurants to collect the money up front.

I started hearing last week that restaurants were discovering the hard way that Tock had changed its terms—that the money they had collected for reservations wasn’t being paid out as they were used to. In fact, a Milwaukee bar owner was already asking Kokonas publicly on Facebook about this, and when I asked the latter about it, he downplayed the shift:

It hasn’t changed in a while. Some older, legacy customers were on a plan where they received payments and deposits, or a portion thereof, prior to guests dining. For those customers we updated them to the most recent ToS in light of Covid.

Just a little change in the terms of service—except it’s not so little if you’re used to booking tables out 30 or 60 days. If someone booked a $300 dinner for August 1 today, you used to get the money around July 1. Now you get it August 3rd at best. Multiply that by 60 seats a night, five or six nights a week, and pretty soon we’re talking a lot of money being held in the Bank of Tock. But no biggie, everyone understands this, says Kokonas:

…all restaurants on boarded in the past 12 months or so (not sure exactly the last ToS change) were already on this… this isn’t new, it’s just that when things are operating normally money is flowing on a rolling basis after each service.

Everybody knew about it—except everybody didn’t. “All we heard was 48 hours, 48 hours, 48 hours,” one restaurateur told me—about the pitch Tock gave them well within the last 12 months. Well, it’s 48 hours still, but it’s 48 hours after dinner is served now, not after booking. (Actually, restaurant owners tell me it’s more like 5 to 7 business days.) And if you’re a new restaurant (there will be those again, someday), money won’t be “flowing on a rolling basis” until you’ve been operating for a while.

Some restaurateurs I contacted had no idea that the payment schedule has changed until I told them about it. One independent owner said, “I found out the hard way, because we were doing to-go and takeout. If you’re a restaurant trying to-go and takeout because cash flow is your biggest crisis point, and expecting you’re going to be getting some income right away, you’re going to be caught by surprise. If we hadn’t had the cash on hand, we could have been wiped out.”

So whose money is it, and when? Kokonas explained to me:

As I stated in the FB thread the funds remain the customers’ until a service is rendered. Tock is not Kickstarter… This is all standard for booking systems like Tock. The only systems that pay out ahead charge far more than Tock in order to pay for the defaults. So you either have to charge 2x to 4x of Tock, or you have to segregate the funds and pay out to restaurants after the diner’s dine in order to protect the patrons.

The funds “remain the customers'” in theory, but until recently, they went straight into the hands of the restaurants and were commonly spent on ongoing operations. The real issue here is that the world changed, and Tock was in the squeeze position of that change, without the kind of protection that banks have for depositors’ funds from the FDIC.

When restaurants went into lockdown in March, that left Tock liable for making refunds to diners on future reservations. Tock in turn went to the restaurants to get the money back—and many likely did not have it, or were choosing carefully which of their obligations (rent, healthcare for employees, gearing up for pivoting to takeout, etc.) to spend the cash they had in hand on. So Tock held the bag on late March and April reservations all over town, even as they expanded into the takeout realm. In May they announced that they had raised $10 million to fund an expansion into takeout—right when they could have faced a liquidity crisis as reservations fell and refunds soared.

And Kokonas himself pointed to another risk Tock faced—the fact that, under the existing system, they would have been easy to defraud, intentionally or not:

As well, we had a number of restaurants / pop-ups that wanted to sell ‘experiences’ far into the future, but use the funds now to pay expenses. Should they be unable to deliver those experiences — a greater likelihood in today’s unfortunate climate — Tock would be responsible for refunding those customers.

Restauranteurs are squawking about the change, but I think in fact Tock has done the only thing they could do (though not, it seems, communicated it as well as they should have to their restaurant customers). When a boom busts—and this is clearly the bust many feared, though no one expected it in quite this form—then, as Kokonas said, Tock has to protect itself, either by self-insuring (hiking its fees on everybody to cover the defaults it forecasts), or by making sure that it only has to pay restaurants for meals that are already eaten. The latter probably is the better course, but it’s going to feel like hitting the brakes at 60 for restaurants when it happens.

And so Tock, and the entire restaurant industry, leaves the giddy boom years when you could promise the sky like a dot com in 1999, and adapts to a new world of tighter belts and more cautious accounting. Tock has, indeed, had to accept the “standard for booking systems” (Open Table also pays out at two days after the customer dines), which has to be a hard pill to swallow for a service that was touting its innovation and superiority over the dinosaurs when times were good. Few things seem more symbolic of how the restaurant world has changed in the last few months than that.

And yet—this is the good news for Tock—several of the restaurateurs I’ve talked to had evaluated the alternatives, and so far none have decided to abandon Tock. I asked one owner if he’d considered going to a deposit system—so Tock would get less of his money up front to sit on—and he said, “The problem is, people don’t tip on the deposit, so it screws the servers.” He also thinks that in the present situation, he benefits from choices (number of courses, wine pairings, etc.) being made on Tock before people get to the restaurant—”With our capacity limited now, we have to turn tables to make it,” he says. “If people are going through the wine options with the servers and so on, they’re going to take longer. And then people are going to be standing around waiting for that table, and we just can’t do that right now.” He has other complaints about Tock, but in the end he says, “It’s still the best choice.”

*  *  *

Nick Kokonas responds:

There are a few corrections I’d like to make in your article… and a few conclusions you draw that are not correct:

1)  The money Tock raised last month was for funding growth and quite literally zero dollars went to pay for any sort of liquidity crisis. In fact, because we worked with restaurants to do mass rebookings, reschedulings, and timely refunds the total defaults to consumers that Tock made good on (ie we paid the diner instead of the defunct restaurant) amounted to just over $8,000.  Pretty remarkable, but precisely because most restaurants were already being paid out *after* diners were served and we put precautions in place last year, thankfully.

2)  OpenTable does NOT pay out 48 hours after dining… simply because OT does NOT do any events, prepayment, or deposits.  There is no concept of them taking in money to reduce no shows.  One of the massive problems with the system.  Resy does a minimal number of prepaid dinners but sets up a site for each event or dinner rather than each restaurant.  Again, not a meaningful number.

3)  EventBrite, on the other hand, was so big they used to do ‘scheduled payouts’ ahead of events.  No longer:  https://www.eventbrite.com/blog/advanced-payouts-changes-related-to-covid-19/ Kickstarter is the only service I know of that conceivably could be used for an event where you’d get paid ahead as the name suggests, but obviously that’s not what it’s intended for and I doubt they’d allow it.

4)  As I’ve stated many times Gift Certificates are an absolutely terrible way to fund a struggling business during this crisis. My point to you was that selling ‘fake’ experiences or dinners for 2021 but spending the money now actually sits as a liability on their books… it’s a potential disaster.

The thing is — we’ve communicated consistently about all of this but most restaurant owners, bluntly, did not pay attention until all reservations ceased to exist.  Tock was hyper-aware of the clearing operations we had built and will continue to message to new and old customers why these policies are in place.  That said, this is not the sea change you wrote about… this is normal clearing operations for any booking company that takes payment before services are rendered.

3. MORE MR. NICE GUY

Michael Nagrant has a long piece summing up the world right now, which he calls “a prayer for the future of restaurants, and people in general.” There’s restaurants, and Black Lives Matter, and Mario’s Italian ice, and all kinds of things in it, and I don’t want to cherrypick it and give you a pale excerpted version of the real thing, so just go read it. Okay, I am going to excerpt one thing from Nagrant’s litany of ways to make it a better world:

What I can do, and what you can do is stop normalizing and demanding sub $20 entrees from chefs who buy locally from the very best farmers and pay their employees a living wage.

There’s one thing I want to argue with, though:

One personal action that I have decided to take toward supporting the industry is to no longer negatively review restaurants. I have long believed that as a critic you should call it like you see it, because if people are to trust you, then they need to see what you are against. If there is no history or reference for a spectrum of decisions, how do people know you are not a shill or that you are actually providing a service? I have always felt my loyalty was to readers and their pocketbooks first, but, also I have responsibility to be fair to restaurants as well… Going forward, I will only highlight what I truly love. I will still be constructive in my criticism in positive reviews, but if a place on balance is awful, it will not be written about.

This is actually becoming a pretty common declaration—hell, even Jay Rayner, a London critic (which is like saying, a Great White Shark) has made his pledge of The New Niceness. I can totally see that right now, when restaurants are all on a knife’s edge financially. (Though at the moment there are, perhaps, more dire threats, ahem, to restaurants online than mere reviewers.) And who am I to argue with Nagrant’s position when it is overwhelmingly my own—I ignore restaurants I find inferior, my one major effort at criticism, The Fooditor 99, was constructed to simply leave out the places that I thought kind of blew, and so on.

All the same, I strenuously object to the implication that bad reviews are, by their nature, attacks on restaurants. That it’s kind of dirty pool to write a hostile or dismissive review. Having standards and expressing them is essential to the quality of our scene; if we have great restaurants it’s in part because people have said, this is great, and meanwhile this is not, for this, this and this reason. Farm to table is great because off the industrial food truck is not good. Precise cooking is great because sloppy cooking is lame. And so on.

Nagrant maybe feels a little shellshocked because of a few tough reviews he’s written of late, and because a few chefs of note have responded to them hostilely, and all that happened right as the restaurant industry went into a hundred-year storm. Nevertheless, my fondest hope is that we emerge from that storm, and plenty of places are still around at the end, and new ones open—and there are still reviewers who are willing to piss off chefs by telling the truth, so that they influence at least a sliver of the dining public to spend their money not where the buzz is, the crowd is, the influencers are, but where the best food is. That is a noble service, however thankless, not a crime.

4. THINGS CHANGE

Are we back to the normal of capsule review roundups of “where to eat now”? The Tribune apparently thinks so—19 recommendations from Phil Vettel and Nick Kindelsperger.

A pop-up selling Japanese style sandwiches (very white bread, very soft fillings) at Moon Palace in Chinatown.

Check out these homemade Sicilian/Detroit style pizzas—which you can only get through a raffle benefiting Assata’s Daughters, a South Side social service organization. (Time Out)

Much-beloved Thattu has left Politan Row and is doing popups until they find a permanent home. Good news that upscale Mexican bakery Masa Madre is moving into Politan Row, though.

Sorry to hear that Mariya Russell—Banchet and Michelin winner at Kumiko—is taking off to relax and recharge in Hawaii. Which puts Michelin back at zero black women chefs.

Speaking of Kumiko, Steve Dolinsky has more on to-go cocktails, the result of an effort spearheaded by Kumiko’s Julia Momose.

Overserved talks to Cliff Rome, of Peaches restaurant on the South Side—you might recognize the name from here.

$350 PB&J is so wrong for the moment it hurts.

5. I FRATELLI

I wrote about Adam Weisell’s pizza place a while back. Now David Hammond tells you about his brother Adrian Weisell’s Oak Park wine shop: “Like his brother, Weisell aims to introduce his customers to Italian comestibles that are little-known to many Americans. We all know that Italian wine is much more than Chianti, but the range of Italian wines is jaw-dropping.”

6. OLD SEEDS

Mike Sula has an interesting piece on unusual varieties of seeds from the Balkans that Vera Videnovich, a former figure at local farmers’ markets (and a sometimes Reader employee), is growing to keep the genetics going: “She, like her father, is a seed saver. The beans remained on a shelf in a cardboard box, even as she befriended a monk from a monastery in Grayslake who gifted her a supply of seeds that produce the bundevara, a sweet, white-fleshed pumpkin typically made into a strudel across the Balkans. ‘He brought all these seeds in pill bottles,’ she says. ‘He had melons, squash, peppers, tomatoes, pepper, flowers, onions. This other priest saw us chatting and he’s like, ‘You’re selling drugs.'”

7. MADRE-IN-LAW

Peter Engler introduced us all to South Side Chicago’s Mother-In-Law. Now he’s found a Mexican version—probably no relation, but a similar motivation (maximum flavor at minimum pricing). The cremeria he mentions, by the way, is the same one that has a branch at the Tianguis in West Dundee.

8. BOCA AND BERSERKER

Kinda forgot to check in on Sandwich Tribunal for a while and… oh my. The Viking sandwich is berserk(er). The Spanish ones look more refined.

WHAT MIKE ATE

I hadn’t ordered from a high end restaurant in nearly a month, but for Father’s Day last weekend, my wife picked a meal kit from Avec for dinner, and the kids followed the instructions and cooked the Slagel chicken on the grill. And it was great! Better chicken than I would have made alone, a bunch of mezzes and housemade pitas which we noshed on the next day or two. A very pleasant break for me.

I think I cooked every other night this week, but I picked up sandwiches at J.T.’s Genuine Sandwich Shop, which now has the Italian pork sandwich on the menu, and Son #1 and shlepped out to Des Plaines for Chicago Ramen, the new ramen shop which according to Mike Sula is distinguished by its White Ma Po Tofu ramen. It is my curse that I must try new things, so I ordered that; frankly it’s kind of like dumping a ma po tofu dish from a Chinese restaurant in your ramen, and I don’t think either half of the combination is improved by doing so. That said, I thought the red miso ramen that Son #1 ordered was very good, and I felt for the two people alone in their restaurant set up for busy ramen diners. Someday I’ll go back and eat at the counter and shoot the breeze with the chef and experience the restaurant they thought they were opening some months ago.