A year ago, club party, a subscription-based service aimed at disrupting the food delivery industry, sprang from stealth with $3.5 million in seed capital and the backing of prominent investors including General Catalyst and Pika Capital. Co-founders Atallah Atallah, Ghazi Atallah and Chris Miao claimed that by working with hundreds of restaurants to create low-cost meals, they were able to offer delivery that cost as little as $5.99 per dish plus a $2 delivery fee (and $1 for single dishes). – meal orders).
The company seemed to be going strong, even hiring staff travel bloggers for promotion spots on TikTok. But earlier this year, subscribers started seeing higher tabs and fees. Over the past few months, Club Feast has completely ditched its consumer offerings in favor of corporate catering, leaving its original customers with meal credits they say they can’t use.
“The advertised price didn’t last long and by the time I stopped using the service, the prices were the same as Seamless and Uber Eats,” a former Club Feast user told businesskinda.com via Twitter. “I would literally be in the [mobile] app and the price was different. Then they tried to say it was because of rising ingredient prices, etc. [but] the problem for me was the lack of transparency and accountability.”
Cheap food delivery
At launch, Club Feast allowed diners to sign up for a weekly meal plan and reserve lunch or dinner orders several hours in advance. Subscribers were given a certain number of meal credits, which could be topped up, paused or spent at any time. Club Feast’s restaurant partners offered four or five meals to choose from, which amounted to between $8.50 and $9 with the cost included—or less for customers who subscribed to a $7 “Feast Pass” subscription, 99 per month which took away the delivery charges.
The idea was to give restaurants an estimate of purchase volume so they could plan ahead and cook economically — and pass the savings on to diners. While operators accepted lower profit margins on Club Feast meals, they did so expecting higher order volumes to offset this. Club Feast’s bike delivery drivers were also more predictable than on-demand ordering platforms, in that routes were chosen for “efficiency” and meals were delivered on a regular schedule.
In an interview with businesskinda.com in January 2021, Atallah Atallah said that – while Club Feast may eventually introduce more expensive meals for enthusiasts – the base price would remain intact. “We want to make sure this doesn’t affect the $5.99 concept,” he said.
There was reason to believe that Club Feast would keep its promise. Atallah Atallah is also a co-founder of restaurant rewards company Seated, which claims to have raised tens of millions of dollars in revenue for its restaurant partners. And Club Feast had been expanding for a year, adding New York City and the greater Bay Area to its delivery zones after conducting pilots in San Francisco and San Mateo.
But the calculus changed at some point. Meal prices were in mid-2021 increased up to $6.99. Then Club Feast started with an 18% service charge and modified the delivery model: customers could opt for faster deliveries in exchange for variable costs ($0.49 to $3).
Club Feast’s website from August 3. Image Credits: club party
Companies are constantly adjusting their prices, especially in a tough market where subscriber growth is critical. That’s not unusual. Last month, DoorDash increased the minimum order size for free delivery. But where Club Feast went wrong was that it was not proactive in informing about price changes, according to the customers who spoke to businesskinda.com.
One customer said they saw the price of an entree rise to $8.50 in February; an item at another restaurant had risen to $9.99 in early March. A second customer said they repeatedly had to pay higher delivery charges, even if they opted for a wider delivery window.
It’s around this time that some delivery guys for Club Feast complained on social media that they were not paid in a timely manner for additional deliveries on top of their planned routes. One said Club Feast promised to send a log but never did. Others complained the lack of payment history, estimates of wages by shift and visibility of tips in the app.
Club Feast — perhaps looking for alternative industries — began promoting large-format group and family orders. A few months after 2022, customers discovered they couldn’t use their credit to place dinner or weekend orders. Soon they could no longer place orders at all.
A shift in the business model
Several customers tell businesskinda.com that the app and website mysteriously stopped working in June. Those who purchased meal credits could not use the credits. Some received full or partial refunds, but others are still being charged for their weekly subscriptions and have been unable to close their accounts.
“I tried to make contact” [to customer service]and was told my subscription has been canceled and the refund has been processed… I have not received my refund,” a customer told businesskinda.com via email. “I contacted again and was again told that my refund has been processed and that I have to be patient… If the goal is to make it difficult to get money back so that people walk away, it has worked.”
This reporter repeatedly tried – and failed – to sign up for a new Club Feast account. The companies FAQ reflects the old business model, but the Club Feast homepage has been rebranded with ads for new (starting July) corporate catering services: $60 per month per employee for one meal per week to $300 per month per employee for five meals per week.
Meanwhile, subscribers say the customer service chat feature in Club Feast’s app has stopped working.
In a recent interview Speaking to Food on Demand News, Ghazi Atallah said the plan was to scale Club Feast into new markets in 2022 and in 2023. It’s unclear if that’s still in the cards, pivot or no.
Function messages for catering deliverers at Club Feast remain open on several boards, and the company’s LinkedIn page lists more than 100 employees. Club Feast also secured capital somewhat recently, raising $10.25 million last May from General Catalyst, Grishin Robotics, Modern Venture Partners, Eric Feldman and Pika Capital in a “seed II” round to bring the total amount to $13. .75 million.
When Atallah Atallah was asked for comment via LinkedIn, he claimed that Club Feast has made an effort to refund every customer who has made a request and said anyone who didn’t feel like getting their money back can email him personally. .
“[Refunds] took a few days for Stripe processing…the delay [also] could be from their bank processing, which caused some confusion,” he said. the indispensable benefit for return to the office.Our price range makes it accessible for every business to offer great delicious meals to their team members while supporting local restaurants.We have expanded the business-to-business business over the past six months with more than 600 % to let grow.”
Club Feast’s messy change of course comes at a turbulent time for the wider food delivery industry. This week was Just Eat Takeaway forced to write off GrubHub’s worth by billions just a year after the group’s purchase. A promising hospitality concept, Butler, abruptly shut down earlier this year. And in early July, ChowNow laid off about 100 employees in what the CEO called a response to deteriorating capital conditions.
Janice has been with businesskinda for 5 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider businesskinda team, Janice seeks to understand an audience before creating memorable, persuasive copy.