Franchise brand Chick’nCone began selling NFTs on Friday under an innovative program designed to allow token holders to share royalties and fees as the chain grows.
The 24-unit fast-casual concept features a menu of fried chicken fillets with various sauces, served in waffle cones. Founded in 2014, the Fort. The Lauderdale, Florida-based chain has aggressive growth plans across the United States
Jonathan Almanzar, co-founder and CEO of Chick’nCone, said the sale of NFT brings the cryptocurrency world together with the real-world restaurant franchise in a way that benefits all parties involved.
“We couldn’t help but notice all the buzz and excitement surrounding the NFT space right now,” he said in a press release announcing the program. “A forward-thinking spirit is what has really propelled our brand so far and we were confident that if we established our own NFT program, it would successfully take off.”
In an interview with Nation’s Restaurant News, Almanzar said he was an early investor in Bitcoin, which in part helped fund the launch of Chick’nCone.
This is how the NFT program works:
The chain uses the Ethereum cryptocurrency exchange to sell tokens called Chick’nCoins – which, despite their name, are not coins like Dogecoin or ETH. It was really meant to be a play with the brand name, he said.
In this case, each coin, or token, represents ownership of a certain geographic area in the United States that the chain hopes to develop, usually a county. Token holders will receive 50% of the initial franchise fee for any new unit to open in this area. Additionally, they will also earn a 2% royalty on sales to all locations in the territory, paid monthly, for six years.
Revenue will be split equally among token holders in the region. And tokens will be limited, although more populated areas will have more Chick’nCoins issued. Regions can contain a minimum of three locations, but most can contain up to five. In areas with multiple coin holders, up to 25 Chick’nCone locations could open.
The cost of a Chick’nCoin is set at $14,500 or 5.5 ETH – buyers have the option of using US dollars or cryptocurrency. Almanzar said on Friday that 5.5 ETH is higher than the dollar amount, in part because there are US dollar conversion fees. After the company sells 100 tokens, it plans to reassess the price, given the fluid exchange rates.
But, since Chick’nCone’s franchise fee is $45,000, a coin holder could earn $22,500. If there are already open units in the territory, that coin holder could also start receiving monthly dividends immediately.
Of course, it is also possible that no units will open in the region, which means that the token holder sees no return on this NFT purchase.
As is common for NFT sales, Chick’nCone held a small private presale of 10 Chick’nCoins, and all of them sold out.
Almanzar said, however, that the sale attracted more traditional investors than crypto enthusiasts, so they ended up taking the option of investing in US dollars, wire money and send checks, and signing old-fashioned contracts.
When the coins started selling on Ethereum on Friday, 10 more had sold. Almanzar said he would be happy to see one coin sold per day for the rest of the year, which would fetch around $5 million. Coin holders can also resell their Chick’nCoins, which would generate a 10% royalty for the franchisor.
The company has created 933 Chick’nCoins in total. If all the coins sell, the company has the potential to raise close to $14 million.
“It’s basically our capital plan without giving equity,” he said.
The additional funding will help fuel the channel’s growth strategy. Almanzar said he would like to strengthen his support staff and create new formats for unit growth – including his idea of turning shipping containers into stand-alone restaurants with drive-thru, “like a business in a box”. , did he declare. “And we have other ideas to help franchisees on the job front.”
Almanzar sees other opportunities for restaurants in the crypto space. As McDonald’s, Panera Bread, and Chipotle Mexican Grill have demonstrated, there may soon be virtual restaurants in games where customers can order for delivery.
“I really want to get to the point where we accept crypto as payment,” he said. “I thought a lot about how to cross NFTs and restaurants. I thought about doing smaller things, like a token that gives you a permanent discount. Do you remember the forever stamp?”
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