How can the company afford to give away 2 million meals?
"A Grand Slam breakfast retails for $5.99, so the maximum retail value of this giveaway would be around $15,457,075. Wow!
"However, the cost of the food to prepare a menu item typically runs around 25% to 30%, so the actual cost for food for this giveaway, at a generous 30%, would be more like $4,637,122.
"Now, how many of these diners do you suppose would eat a breakfast without something to drink? My guess is very few. Suppose 2,500,000 ordered coffee, juice or a soft drink. Restaurants typically make around 85% on drink orders, so on an average $2 per drink basis, the company should net around $1.70 per, or $4,250,000 in drink revenue.
"If this is the case, the entire promotion cost is now down to around $400,000. The value of the free press surrounding this promotion? Easily worth 10 times that."
3 comments:
I was thinking of heading to the one in the Gables this morning but I didn't have hours to waste for a stack of pancakes.
How can the company afford to give away 2 million meals?
"A Grand Slam breakfast retails for $5.99, so the maximum retail value of this giveaway would be around $15,457,075. Wow!
"However, the cost of the food to prepare a menu item typically runs around 25% to 30%, so the actual cost for food for this giveaway, at a generous 30%, would be more like $4,637,122.
"Now, how many of these diners do you suppose would eat a breakfast without something to drink? My guess is very few. Suppose 2,500,000 ordered coffee, juice or a soft drink. Restaurants typically make around 85% on drink orders, so on an average $2 per drink basis, the company should net around $1.70 per, or $4,250,000 in drink revenue.
"If this is the case, the entire promotion cost is now down to around $400,000. The value of the free press surrounding this promotion? Easily worth 10 times that."
I only waited about 20 minutes outside the Denny's across from UM at about 8 AM.
And many, many people were only drinking water with their free grand slam. (I paid the $1.80 for the coffee.)
I saw a table of 5 who had one carafe of orange juice ($5.49), five waters, and five Grand Slams.
I just hope people remembered to tip the waitresses. They were working really hard.
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