UWink prototype clears $2m in first-year sales, adds pay-at-table features

Nation's Restaurant News,  Jan 7, 2008  by Alan J. Liddle

Tags: sales

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VAN NUYS, CALIF -- UWink Inc., the Nolan Bushnell-led company whose initial "interactive restaurant" notched first-year revenue exceeding $2.2 million, has added pay-at-table functionality to tech features that let guests place touchscreen food and bar orders and play game from tabletop consoles.

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The apparent success of the prototype uWink bistro in Woodland Hills, Calif., has helped paved the way for the publicly traded franchisor, despite net losses on startup costs, to ready its proprietary ordering-payment-entertainment software for sale to other operators.

Van Nuys-based uWink already is benefiting from its trading of consumer data extracted from the touchscreen menu system for products provided by beverage suppliers.

With several more company-operated, franchised or joint-venture uWinks in various stages of development in Florida, Texas, Canada and California, the prototype restaurant is drawing crowds with the help of a multiplayer game platform for head-to-head and team competition among guests. An eclectic, adult-oriented menu devised by a disciple of Wolfgang Puck's restaurants is another attraction.

And to help monetize its mix of free and fee-based games, uWink has deployed its "microtransaction" software to sell "credits" to garners who can redeem them on subsequent visits--one component of the proprietary software that the company intends to market to other restaurant companies.

"The early interest has been huge," said uWink chief executive Bushnell, who previously founded Atari and the Chuck E. Cheese's chain. "The monetizing of our software was not part of our original plan," he explained. "We were just going to be a restaurant company, but you have to listen to your [potential] customers," he added, referring to third-party inquiries about the uWink technology.

Bushnell said uWink's efforts to develop restaurants alone, in joint ventures or through franchising, would not be altered significantly by its new technology supply venture, which entails a co development and co-marketing agreement with Toronto-based Volante Systems.

"The only possible difference is that we will be putting some resources into the marketing of this technology," he said.

As for its restaurant developments, uWink anticipates the openings of new branches in Hollywood and Mountain View, Calif., by this year's second quarter, according to Alissa Tappan, vice president of marketing and public relations. The company previously said that other new uWinks were in various stages of planning or development in Los Angeles and Dallas, through a joint-venture partner in Canada, and from an area development agreement that's expected to yield three franchised branches in Miami.

UWink and Volante Systems last month said they would co-develop and co-market the self-order, self-pay and at-the-table digital entertainment delivery system pioneered in uWink's Woodland Hills restaurant. Their "uV Hospitality Solution" integrates uWink's touchscreen user interface software and micro-transaction game credit-redemption system with Volantd's point-of-sale system and back-office enterprise application.

When uV Hospitality comes on the market, buyers will have the option to pick and choose modules as they see fit, Bushnell said. Some buyers might select the entire package, while others might only want the entertainment delivery system and uWink's catalog of games or the pay-at-table system, he said.

Bushnell's history with Atari and Chuck E. Cheese's and his introduction of self-ordering and digital media entertainment into a casual-dining environment has made uWink a closely watched concept. His latest foodservice innovations have led some industry watchers to wonder whether uWink's influences might inspire new vitality for the recently anemic casual-dining segment and lead to service labor reductions and enhanced patron loyalties.

Several restaurant companies, including Hooters of America and Cara Operations Ltd., now are exploring or deploying some self-order, self-pay technologies to give guests more control over their dining experience and allay their fears of possible credit card fraud and identity theft.

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UWink's graphically oriented technology walks guests through the check closing process, permits them to swipe their own cards through tabletop readers and lets them sign their names on their touchscreens. The system can email transaction receipts and is fully integrated with uWink's electronic card processing and point-of-sale systems.

In a recent presentation, uWink officials said the 5,000-square-foot, 224-seat Woodland Hills restaurant generates $500 in revenue per square foot, suggesting calendar 2007 revenue of about $2.5 million. Reports filed with the U.S. Securities and Exchange Commission indicated that the operation scored sales of about $2,19 million in its first 50 weeks of business, ended Oct. 2, and had cost of sales of about 31.11 percent during that period.