Andrew Simmons founded OrangeCrate in 2015 with an eye toward supporting local restaurants and locals. The company isn’t a franchise; every OrangeCrate location is owned and operated by someone in that community. For more than six years, the company has been coordinating delivery in cities throughout Alabama, Alaska, California, Georgia, Illinois, Indiana, Kentucky, Michigan, Missouri, Nebraska, North Carolina, South Carolina, Tennessee, and Virginia. Speaking from his offices in San Diego, California, Simmons reflects on his current challenges and opportunities and how OrangeCrate stands out from the competition.
Q: Compared with other delivery companies, OrangeCrate has a unique business model. Can you talk about what differentiates it from the larger delivery entities?
Andrew Simmons: The local owners of OrangeCrate operations are licensees of the business, not franchisees. And we tend to look for people who have the drive and determination but not necessarily the money to buy a franchise or start a business. When they approach us about getting started, we do research on the city they’re in using Brizo, and then if it looks good, we will license the location to them.
Q: Is there a certain profile of operators? Do they need to have a particular background?
AS: We’ve got people from all walks of life. We have a military wife, a sheriff’s deputy and his wife who is a 911 operator. One of our operators in Texas also works for a bank. It’s a broad mix of backgrounds, but the common thread is that they’ve all got the drive. They just may not have fifty or a hundred and fifty thousand dollars to buy a franchise or start a business. But if they have the qualities we’re looking for, we will partner with them to help them. We have about a 98% retention rate, and from this method, we’ve grown to 40 cities.
Q: What kind of support or training does OrangeCrate provide to its licensees?
AS: We train them on how to talk to restaurants and how to execute our Last Mile hire program for drivers, and then we completely fund everything else they need minus the salary. Any of the start-up costs, the advertising, the payroll, the marketing. Whatever is needed to get them up and off the ground. Once they’re up and running, we do a profit share at a pretty high level. It’s gross sales minus food costs and any chargebacks and then we split it 50-50 with that person or company. And then we send them their share. From our share, we cover all those expenses that are incurred. Then, on our end, we make about eight percent and they make about 49 and a half percent of the profits.
Q: Is it that potential operators are coming to you to start up in a particular city or are you identifying delivery deserts and recruiting an operator?
AS: We’re in Brizo quite a bit, looking at different metrics. We’re looking to see where there’s competition or no competition, what the demographics are. The competition isn’t too much of a concern for us because in some way the incumbents have done a good deal of marketing for us in terms of teaching restaurants. There are easier cities for us to get into and harder cities for us to get into and sometimes we end up in a harder city.
Q: Regarding demographics, is there a sweet spot for delivery you look for in potential markets?
AS: A 24-35 years of age is our strongest demographic, so that’s what we’re looking for.
Q: What are some of the things that differentiate OrangeCrate from its competitors?
AS: Well, for starters we’re profitable. And, one of our strong points that we share with restaurants is that we utilize something called Deliver Safe, which is training for independent contractors around how to deliver food. There’s a particular type of bag used for delivering food at a Safe Serve temperature. And it’s about making sure the food is sealed before it’s delivered. Restaurants care about how food is plated, so we make sure drivers understand how to extend a restaurant’s brand. It’s not just grabbing a plastic bag, tossing it into the front seat of a car by a driver who’s got kids or a dog in the care at the same time. There’s a look and feel to all of our deliveries.
Q: You mentioned Last Mile hire. What does that involve?
AS: We don’t just hand out the app. Anyone can sign up to drive, but we’re still going to meet with you in person to hand off the bag and talk about how delivery works, what our standards are for it. And if a restaurant reports back to us that a driver has shown up without a bag or if they’re unkempt or there’s some other concern, we won’t use that driver-partner anymore.
Q: Because OrangeCrate is locally operated, does that bring a higher level of customer service for restaurants and consumers?
AS: Yes, if someone were to call us, they would reach a person at OrangeCrate right away because all our locations are essentially locally owned. The restaurants and consumers know how to reach the people right off the bat. You can’t get that with the other delivery companies. If there’s an issue on those platforms, you’re often looking at a two- to three-day response via email that goes to a help desk or some other customer service app. If there’s an issue with the food, we typically refund the customer right away and we try to keep the experience out of social media when we can to make sure that the restaurants are not dragged into it. When a refund is issued, the restaurant still gets paid, but we don’t get paid.
Q: It sounds like OrangeCrate is very hands-on in terms of supporting its licensees. What are some of the things you do to make sure they have the resources they need?
AS: We all stay in touch. And all the manager-operators help each other out. We have a Slack channel that everyone is a part of. So someone might say, “Hey, I’m trying to open a brand new market. What do you recommend?” And everybody jumps in with suggestions, like set up this type of Facebook page, use our ads, use our artwork, and so on. So, everybody helps each other out.
Q: Are there any new markets we’ll see OrangeCrate in soon?
AS: We’re actually opening up four new markets this month, including Topeka and two cities in Washington, D.C.
To learn more about OrangeCrate, visit https://www.myorangecrate.com/.
About Brizo Data, Inc.: Brizo Data helps the foodservice industry by providing the strategic data you need to win in your market. We empower restaurant vendors and restauranteurs with better data for Business Intelligence, Market Research, and Competitive Analysis. Brizo monitors the online footprint of every food serving establishment in the US and Canada – from social media presence, online reviews, menu items, market composition, and even technological choices.