Fast 50 2017 – Crain’s Chicago Business

on Jun29

27 June 2017 | 8:00 am

The Chicago entrepreneur heads River North-based Fooda, a lunch-service broker of sorts that matches office buildings full of hungry workers with restaurants seeking another revenue stream.

Since its launch in January 2011, Fooda has grown to 800 clients served by more than 1,000 participating restaurants spread across 10 U.S. markets. Its annual revenue in 2016 was $48.3 million, more than double the $23.6 million booked a year earlier and up from just $1.2 million in its first full year, 2011, making it Chicagos sixth fastest-growing company.

Were a 6 1/2-year overnight success, Buzza, 45, says. Weve been very deliberate with what weve done, and weve made a lot of investment in making it right.

To fund its expansion, Buzza has taken on $23 million in outside investment from about 20 investors, the biggest rounds from Valor Equity Partners, Lightbank and KGC Capital. With that funding in hand, Buzza has no intention of slowing down. Our goal is to be in each of the top 50 metro areas within the next three to five years, he says.

The idea for Fooda hatched out of Buzzas previous business, River North-based logistics provider Echo Global Logistics, which he exited in 2010, a year after taking the company public.

At Echo, Buzzas commission-driven employees didnt like leaving their desks for long to grab lunch. On top of that, they didnt have many options; the building housing their firm didnt have any on-site options, and the neighborhood lacked a stable of affordable and quick takeout spots.

After constantly fielding complaints from his workers, Buzza allowed one to recruit a rotating list of restaurants that would set up pop-up cafes inside the office during lunchtime. Echos lunches became such a hit that the buildings other corporate residents routinely began filtering into its offices to get a taste of the action. Demand for the service was enough to convince Buzza and a few of his comrades to go all-in on the lunch brokerage.

Fooda typically contracts with companies and building owners with more than 500 employees in dense urban areas. Some lunch counters are like permanent storefronts; others are literally pop-upsfolding tables and extension cords that must be erected and broken down each day. Fooda then brings in a rotating slate of restaurant partners that agree to sell an abbreviated menu of food that travels well, with prices at or below what they charge inside their restaurants.

Restaurant staff operate the booths, and customers pay restaurants directly, with Fooda taking a percentage of each sale. Building owners and companies typically provide the space for free in exchange for offering its tenants or employees a perceived amenity. Restaurants, meanwhile, are able to add a five-day-a-week revenue stream while exposing their brand and their food to a tranche of consumers they may not otherwise reach.

Along with its original location inside Echo, Fooda hosts daily pop-ups inside the Chicago offices of companies such as Groupon, Coyote Logistics, General Growth Properties and Leo Burnett. Its restaurant partners are largely independent one-offs and small chains, such as Burrito Beach, SummerHouse Santa Monica, Orsos, Mercadito and Wow Bao.

Its a great way for us to get our product out to more people to help grow our business and our brand name, says Geoff Alexander, managing partner of Lettuce Entertain You Enterprises Wow Bao franchise, which has been selling at Fooda pop-ups for several years. Wow Bao preps at one of its downtown restaurants and heats food on-site using portable steamers and butane burners. On average, it serves 85 to 100 customers per day in its Fooda pop-ups, which require just two employees a combined eight hours to operate.

Obviously, its profitable or we wouldnt still be doing it, Alexander says. But for us, the biggest thing is getting our brand out there, especially into high-rises. Fooda offered us a way to get in the door.

While Buzza acknowledges his investors eventually want to see a return, he has no immediate plans to sell or go public. Were in full growth mode right now, he says. We ended last year in only seven cities. Were just adding our third this year. Theres a lot of heavy lifting to be done before we think about an exit.

Previous postGroup Sues Uber Over Lack of Wheelchair Access Next postCity Colleges wants to sell downtown headquarters

Chicago Financial Times

Copyright © 2021 Chicago Financial Times

Updates via RSS
or Email