Membership Feast quietly pivoted to catering and left its shopper prospects in a lurch – TechCrunch

A yr in the past, Club Feast, a subscription-based service aiming to disrupt the meals supply trade, emerged from stealth with $3.5 million in seed funding and the backing of outstanding traders, together with Common Catalyst and Pika Capital. Co-founders Atallah Atallah, Ghazi Atallah and Chris Miao claimed that, by working with lots of of eating places to create low-priced meals, they may supply supply that solely price $5.99 per dish plus a $2 supply price (and a $1 price for single-meal orders).

The enterprise gave the impression to be going robust, even hiring travel bloggers for promotional spots on TikTok. However earlier this yr, subscribers began seeing increased tabs and charges. Then, inside the previous couple of months, Membership Feast ditched its shopper providing utterly in favor of company catering, leaving its authentic prospects with meal credit that they are saying they will’t use.

“The marketed worth didn’t final lengthy, and by the point I finished utilizing the service, the costs have been the identical as Seamless and Uber Eats,” one former Membership Feast consumer informed TechCrunch through Twitter. “I’d actually look within the [mobile] app and the worth was completely different. Then they tried to say it was due to rising costs of elements, and so forth., [but] the difficulty for me was lack of transparency and accountability.”

Low-cost meals supply

At launch, Membership Feast had diners join a weekly meal plan and reserve lunch or dinner orders a number of hours forward of time. Subscribers bought a set variety of meal credit, which might be topped up, paused or spent at any time. Membership Feast’s restaurant companions provided 4 or 5 meals to select from, which got here to between $8.50 and $9 with the charges factored in — or much less for patrons enrolled in a $7.99-per-month “Feast Move” plan that did away with supply charges.

The concept was to provide eating places an estimate of buy quantity so they may plan forward and cook dinner economically — passing the financial savings on to diners. Whereas operators accepted decrease revenue margins on Membership Feast meals, they did so with the expectation that increased order volumes would make up for it. Membership Feast’s bike-riding supply drivers, too, had extra predictability than with on-demand ordering platforms within the sense that routes have been chosen for “effectivity” and meals have been dropped off on a daily schedule.

In a January 2021 interview with TechCrunch, Atallah Atallah stated that — whereas Membership Feast would possibly finally introduce higher-priced fancier meals — the bottom worth level would stay intact. “We need to make it possible for doesn’t have an effect on the $5.99 idea,” he stated.

There was cause to consider Membership Feast would preserve its promise. Atallah Atallah can be a co-founder of restaurant rewards firm Seated, which claims to have introduced in tens of hundreds of thousands of {dollars} in income for its restaurant companions. And Membership Feast was on an enlargement tear for a yr, including New York Metropolis and the bigger Bay Space to its supply zones after operating pilots in San Francisco and San Mateo.

However the calculus modified sooner or later. By mid-2021, meal costs had increased to $6.99. Then Membership Feast began tacking on an 18% service price and tweaked its supply mannequin: Clients may go for quicker deliveries in change for variable charges ($0.49 to $3).

Companies regulate pricing on a regular basis — particularly in a difficult market the place subscriber progress is essential. That’s common. Simply final month, DoorDash increased the minimal order measurement totally free supply. However the place Membership Feast went fallacious was its failure to be proactive about informing of pricing adjustments, in keeping with the purchasers who spoke with TechCrunch.

One buyer stated that they noticed the worth of an entree enhance to $8.50 in February; an merchandise at one other restaurant had risen to $9.99 by early March. A second buyer stated that they have been repeatedly charged a better supply price even once they opted for a wider supply window.

It’s round this time that some supply folks for Membership Feast complained on social media that they weren’t being paid in a well timed method for additional deliveries on high of their scheduled routes. One stated that Membership Feast promised to ship a log sheet, however by no means did. Others lamented the dearth of fee historical past, estimates of wages per shift and tip visibility within the app.

Membership Feast — maybe on the hunt for various traces of enterprise — started selling large-format group and household orders. A couple of months into 2022, prospects discovered they couldn’t use their credit to put dinner or weekend orders. Quickly, they couldn’t place any orders in any respect.

A shift in enterprise mannequin

A number of prospects inform TechCrunch that the app and web site mysteriously stopped working in June. Those that’d bought meal credit couldn’t use the credit. Some acquired full or partial refunds, however others proceed to be charged for his or her weekly subscriptions and haven’t been in a position to shut their accounts.

“I attempted to succeed in out [to customer service], and was informed my subscription has been cancelled and refund processed … I didn’t get my refund,” one buyer informed TechCrunch through e mail. “I reached out once more and was informed as soon as once more that my refund has been processed and I must be affected person … If the objective is to make it troublesome to get a reimbursement so folks will stroll away, it has succeeded.”

This reporter tried repeatedly — and failed — to enroll in a brand new Membership Feast account. The corporate’s FAQ displays the outdated enterprise mannequin, however Membership Feast’s homepage has been rebranded with commercials for brand new (as of July) company catering companies: $60 per 30 days per worker for one meal delivered each week as much as $300 per 30 days per worker for 5 meals every week.

In the meantime, subscribers say the customer support chat operate in Membership Feast’s app has stopped working.

In a latest interview with Meals on Demand Information, Ghazi Atallah stated that the plan was to scale Membership Feast to new markets all through 2022 and into 2023. It’s unclear whether or not that’s nonetheless within the playing cards, pivot or no.

Job postings for catering supply drivers at Membership Feast stay open on numerous boards, and the corporate’s LinkedIn web page lists greater than 100 staff. Membership Feast considerably just lately secured capital, too, final Could elevating $10.25 million from Common Catalyst, Grishin Robotics, Fashionable Enterprise Companions, Eric Feldman and Pika Capital in a “seed II” spherical to convey its whole raised to $13.75 million.

When reached for remark through LinkedIn, Atallah Atallah claimed that Membership Feast has made an effort to refund any buyer who made a request and stated that anybody who didn’t really feel they bought their a reimbursement can email him personally.

“[Refunds] took a number of days for Stripe processing … the delay [also] might need been from their financial institution processing, which created some confusion,” he stated. “As for the pivot, it’s extra of us focusing extra on our company purchasers as we have now seen large demand for meals as a profit for the should have perk for return to workplace. Our worth level makes it accessible for any firm to supply nice scrumptious meals for his or her workforce members whereas supporting native eating places. We grew the business-to-business enterprise by over 600% within the final six months.”

Membership Feast’s messy change in path comes at a turbulent interval for the broader meals supply trade. This week, Simply Eat Takeaway was forced to jot down down the worth of GrubHub by billions only a yr after shopping for the group. A promising hospitality-focused meals supply idea, Butler, abruptly shut down earlier this yr. And in early July, ChowNow laid off around 100 staff in what the CEO referred to as a response of worsening capital situations.