Hello! Who are you and what food business did you start?
My name is Darren McAdams and I started FoodJets. We are a food delivery company that offers a personalized, local alternative to the big corporate delivery companies.
We deliver to individual homes, but we also do loads of corporate catering as well. We started the company as Food To You in 1993 in a garage delivering for about 20 restaurants. Today we have over 2500 restaurant partners and provide service in over 100 cities.
When we started there was no UberEats, Doordash, Postmates, GrubHub. There were a small handful of regional companies doing more or less what we did: taking orders over the phone, calling them in manually, and then picking up the food and delivering it within a rough hour timeframe.
At the time the notion of giving someone your credit card number over the phone was sketchy.
There was no big industry-leader we could copy or point to when describing our business model. Restaurants and customers took a lot of convincing to take part. We still work with several restaurants that started with us 26 years ago.
What’s your revenue look like?
Since beginning we have done over 20,000,000 deliveries and over $700m in revenue.
What’s your backstory and how did you come up with the idea?
I played baseball at Sonoma State University and there was a small service out there which had about 10 restaurants they delivered from.
When I came back to the Sacramento area for the summer I was playing in a semi-pro league in Sacramento where I snapped my lower leg in a collision at home plate. Well, that ended my playing career.
As I was recuperating at my parents’ house in Auburn, CA I was reading Entrepreneur Magazine and noticed they had a “food delivery” startup package.
I remembered about the small service at Sonoma State and asked my mom for her credit card and ordered the packet which was $89 (yes, she made me pay her back). When my friend was released from the Angels we borrowed $24k from my parents (yes, they made me pay them back) and started Food To You in his mom’s garage in Citrus Heights, CA in 1993.
Since we were only 23 years old he lost interest in building the business and I bought him out for $500 about 3 months later.
Fast forward 20+ years we have since changed our name and have built out our own technology platform, we franchise the business, we have an exclusive delivery contract with Raley’s and have a heavy focus on business catering for meetings, events, etc.
Take us through the process of developing FoodJets.
In 1993 we had two computers, phones, fax machines and created menu books for customers. We would drop our menu catalogs on door steps, then customers would call us over the phone and place an order for delivery.
We charged $2.99 for delivery when we started. We would call in the orders or fax them to a restaurant then dispatch a driver with a 2-way radio to pick it up and deliver. Drivers would use a mapping book called a Thomas guide for delivery.
Fast forward to today and we have app and website with online ordering, with live driver tracking, and integrated tablets in all our restaurants to accept orders and get accurate prep times for the customers.
We no longer print or door drop menu books. Everything has transitioned to online and digital advertising. The trees are breathing a sigh of relief.
Describe the process of launching the business.
When we decided it was time to update our process to take advantage of modern technology, we had company. Had we launched with our current product 10 years ago when we were building it we would have been first to market ahead of all of the big corporate guys.
But because we were bootstrapping our new technology-driven business using funds from the existing business it took a little longer to get it off the ground.
In the beginning we had to build customized software for order building, customer data, order tracking, etc. Again, we were among the first food delivery services so there was no off-the-shelf software for us to buy.
I worked with a number of programmers and coders to get exactly what we needed made.
Then while we were working on that we had to sign up more restaurants, get their menus, design a menu catalog and have them door dropped in certain areas. We we were very new I was doing a lot of this myself.
As we grew I was able to hire folks so I could focus on the bigger picture. Of course we also had to hire drivers, outfit them with food delivery bags, shirts and a 2-way radio.
This was before cell phones! Naturally we had to then pay the drivers and the restaurants. And we paid for all that with the money we were earning. Every dollar went back into the business. When we built out all the current technology; the website, apps, internal software, etc., it was also done with profits from the business.
What’s worked to attract customers?
Attracting customers is the challenge, retaining them is easy. Because our franchise owners are local in every one of our delivery areas, they’re working with their friends and neighbors.
If there’s a problem with an order the business owner is there handling it. If a customer has a question or special request they can reach us on the phone, email, or in-app chat.
We keep our prices competitive and our level of customer service with our restaurant partners and customers is unmatched. Try getting help with a messed-up order from one of our behemoth competitors when they don’t even have a phone number.
We get plenty of word of mouth advertising from our loyal customers but attracting customers in new delivery locations can be a challenge because we can’t just dump millions of dollars of free food coupons into the community like our competitors can (and do).
Fortunately, a big part of our mission is giving back to the community, so customers eventually see us at the park, sponsoring the local soccer team, or at the farmer’s market handing out coupons and chatting with our neighbors.
We host fundraisers for local schools and partner with local food-banks and charities to raise money. And finally we have a digital marketing team that shares our story via Facebook, Instagram, Google ads, etc.
How are you doing today and what does the future look like?
Building our own platform to compete with some of the largest companies in the U.S. like UberEats, DoorDash and GrubHub – to name a few – was necessary to remain in business.
Not having the capital to scale nationally it was necessary for us to develop a franchise model to compete as well. We focus primarily on what the other companies don’t do very well and that is large corporate business orders.
These types of orders take a lot of hand holding and for the really big clients, face time. For our business customers we know the folks who do the ordering by first name, and they know us. We’ll stop in and bring them cookies and ask how we’re doing.
Our competitors don’t bother. We do this very well and to survive in our space we needed to differentiate FoodJets from all the others and with this model we do. The outlook is good. Most customer and companies see and appreciate the local touch. Support local business!
Through running FoodJets, have you learned anything particularly helpful or advantageous?
If you have a great idea, other people will eventually show up to compete. Sometimes they’ll bring billions of dollars in venture capital with them. It’s easy to feel like you have a knife at a gun-fight in those situations but we have the benefit of being smaller and more maneuverable.
Staying flexible has allowed us to roll with the punches and where necessary, to pivot and adapt. I’m sure there’s a baseball metaphor in there somewhere.
When all of the competitors started pouring into Sacramento we were able to double down on customer service with new initiatives and policies. We were also able to develop a delivery partnership with Raleys that provides thousands of weekly deliveries which makes it easier to staff enough drivers for the restaurant deliveries.
We’re constantly seeking out strategic partnerships, be it with Raleys, with the Sacramento Kings, with new catering customers. If you, the reader, think there might be a benefit to partnering up, give us a call!
What platform/tools do you use for your business?
Mise en place. Get your stuff in order. Nothing will put you in the weeds faster than keeping things in the wrong place or not having stuff prepped.
What have been the most influential book?
Rich Dad, Poor Dad by Robert Kiyosaki.
What advice do you have for other entrepreneurs?
Don’t do it, it’s a trap… Just kidding.
My advice is to not be undercapitalized. Cash is king and if you run out you are done. Plus, making decisions based on lack of capital is not the best way to make decisions.