Freebies, support, on menu at Restaurantpro.com

SAN FRANCISCO -- There may be no such thing as a free lunch, as popular wisdom holds, but e-business services provider Restaurantpro.com has an intriguing offer related to all the technological tools and support needed to try online procurement.

Based in San Francisco, Restaurantpro.com in July launched an online business-to-business marketplace targeting independent, full-service restaurants and distributors. The company's basic business is to connect restaurants and their suppliers online via a secure extranet, but it believes it can boost revenues in the future by supplying operators with additional Internet-delivered management software or services.

"We are in the trenches, delivering the goods," said Christopher R. Hemmeter, founder, chairman and chief executive of Restaurantpro.com. "We are up in the Bay Area with about 50 customers -- restaurants and suppliers -- and we are servicing over 180 relationships."

As of mid-August, Restaurantpro.com had enrolled 200 restaurants and more than 100 distributors, and it was working to get all online, sources there said. The company actively is marketing its service in San Francisco, Chicago, New York and Phoenix.

Restaurantpro.com's unique approach to streamlining procurement begins with an offer to provide free of charge to each customer a computer, technical support and high-speed Digital Subscriber Line network connection that includes training. The catch is that Restaurantpro.com users must agree to use BA Merchant services as their credit-card-processor in order to take advantage of the free offer. Restaurants who opt not to switch can still use the service, but must provide their own equipment.

A subsidiary of Bank of America, BA Merchant Services has agreed to share transaction fees with Restaurantpro.com. Hemmeter vowed that restaurants switching to BA Merchant Services would not suffer a rate hike, and he noted that no new credit-card-processing equipment is required to make the transition.

Tangible benefits are related to the Restaurantpro.com-BA Merchant Services partnership, Hemmeter suggested, one of which is that "we have developed some technologies for doing payment processing that greatly accelerate authorization speeds.

"But we have also figured out a way to collect and display customer data to restaurants that gives them a sense of their loyalty figures and a real-time measure of what's happening in counts and check sizes," Hemmeter said. The process, he added, "also allows them [restaurateurs] to look at that information from different levels, whether it's psycho-graphic or demographic or zip-code mapping."

Azie, a popular French-Asian fusion restaurant and lounge in San Francisco, has helped Restaurantpro.com with development work. Managing partner Jody Denton praised the Restaurantpro.com team as "a pretty sharp bunch of folks trying to pioneer something for restaurants that really works.

"Right now we're using it to buy some of our produce, some of our meats and some of our fish," Denton said. "They've got a ways to go to get it [the system] to be the way it should be, but they are listening to comments by users and making changes."

Denton added that he believes the time he and other Restaurantpro.com charter users spend helping the startup refine its systems will prove to be "well spent." Looking at the big picture, he said, "This [effort] could be good for the whole industry."

Other area restau rants enrolled with Restaurantpro.com or online with the Internet company include Boulevard, The Waterfront and Twenty-Four, all in San Francisco; Ondine, Sausalito, Calif.; La Toque, Rutherford, Calif.; The General's Daughter, Sonoma, Calif.; and multiple branches of the Piatti group.

Hemmeter gained his insights into the restaurant business as co-owner of high-volume E&O Trading Co. restaurants in San Francisco and San Jose, Calif., and from previous employment. He once was vice president of Hemmeter Investment, a family-owned business that he said participated in the start-up of more than 100 restaurants and five destination resorts.

Restaurantpro.com chief information officer Ike Schneider previously served as vice president of information technology and services at Alliant Foodservice. The company's vice president of sales, Michael L. Moon, formerly was director of sales for the National Restaurant Association.

Though restaurants using Restaurantpro.com today still must use dial-up connections to seek credit-card authorization, the Internet company said it might introduce its proprietary systems for accelerated credit-card processing via DSL as soon as the end of next month.

By using credit-card processing fees to subsidize computers, technical support and DSL connections for its customers, Restaurantpro.com is removing what it considers to be a sizable roadblock for would-be technology services providers.

"We think fundamentally that there is an infrastructure issue in the restaurant industry," Hemmeter explained. "The [supplied] computer and broadband connectivity of DSL positions us to deliver a whole suite of applications that add value to restaurants."

Restaurantpro.com teamed up with e-commerce systems vendor Commerce One to develop its Web-technology-based procurement process.

Along with automating many facets of the purchasing process and supporting online ordering, the Restaurantpro.com system provides operators with a centralized communication platform for their restaurants, the Internet company said. It explained that distributor users benefit from online storefronts, account management tools and direct marketing channels to operators.

Unlike some e-marketplaces that give operators the tools and encouragement to seek low bids from several suppliers, Restaurantpro.com follows the "existing relationship" model that helps established trading partners move their dealings online.

"For the Internet to come in and suggest that it can play a role in driving efficiency in the industry, it has to service both dance partners," Hemmeter declared. "Why would foodservice distributors want to play with a platform that is all about driving their margins to zero? If they don't want to play, what choice is there for the restaurant operator? And if the marketplace doesn't offer choice, it is of no use."

On-line procurement and payment processing are just the first of many planned products and service offerings from Restaurant pro.com.

"In many ways it is like cable television. There is basic cable, and there is pay per view, and there are movie channels," Hemmeter said of Restaurantpro.com. "For us basic cable is the bundled payment processing, PC and DSL and procurement. The movie channels are all the other applications that we can deliver on a subscription basis."

Citing an example of a non-procurement product from Restaurantpro.com, he said, "If someone wanted to subscribe to an application that would help them with human resources, the software to enable that application is burned into the hard drive of the machine before we ship it. All we have to do is enable it over the Web. and they are up and running."

In order for Restaurantpro.com to enhance its value to restaurateurs, it has entered into partnerships with other technology and foodservice companies, including chefstore.com and online reservation and customer database systems supplier Opentable.com.

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