Forward Looking Floriditas
“What’s not fair is the lack of transparency… meaningful dialogue… and in 95% of all other business relationships you can sit down and discuss price… in payments, you are simply paying for convenience and branding” — James Pederson, Owner
Floriditas on Cuba Street is a timeless master piece with marble benchtops, wooden oak counters and high ceilings. Started 14 years ago by Marc, Julie and James Pedersen. Without modelling on Milan or Paris, this Cafe is an exemplar on how to remaining current and relevant without chasing fashion.
“The vision for Floriditas was to create a timeless cafe and restaurant that had always been there and always will be”
James sees a Cafe of the 21st century “becoming that of a kitchen for the community as opposed to individuals cooking at home. Not only is this better for supply chains, energy efficiency but is also more sociable”.
Timeless and relevant, James envisions a world of local supply chains of produce and goods. “Sourcing ingredients that are closer to the source is essential. When they are picked fresh, they simply taste better”. James and the team bring together local suppliers, sourcing salad greens from the Hawkes Bay and Asparagus from levin as a few examples, seasonality is all part of it.
Control of the supply chain , staff and direct costs — James has done some digging over the years on his fixed costs. Ball park figures from James’ experience indicate the average profit per restaurant is around 4% and a very well performing restaurant will clear 10% on NET PROFIT. Significantly investigating the payment space. At Floriditas alone, they are charged $30–35k per year in Credit Card transaction fees. Lets break it down;
- $30–35k per year in electronic card transaction fees
- 2.1% fixed fee on credit card or debit card transactions
- Do not have paywave — this would be +1% on top of 2.1% fee
From James’ research he estimates that 85–90% of the 2.1% transaction fee goes to Visa or Mastercard. Floriditas is part of the Restaurant Association of New Zealand where as a co-operative they have an agreed fixed fee of 2.1% across the industry. This enables the little guy to band together and get a better deal with the big guys. “What’s not fair is the lack of transparency, communication and meaningful dialogue, between provider and user. 95% of providers in the realm of business are more than happy to sit down and discuss price, quality and service — when it comes to utilities such as payments, you are simply paying for convenience and branding”. These rates are often very opaque even though they have to disclose them online. Take a second to try and making sense for yourself as to what value they truely provide HERE.
These fees directly impact the bottom line of small business’ with a large percentage of their profit being taken straight offshore. Discussions in recent weeks at Floriditas have been centred around what do they do about Paywave fees and how, if possible to avoid them. James and the team are currently faced with the moral dillema of wether or not to pass these fees on to consumers in the goods they purchase from Floriditas. There is no apparent alternative.
So we pitched it to James — how excited would you be if we could reduce your transaction fee and 50% of that goes towards a Charity of the consumers Choice? “That would be a really exciting proposition” as he lit up with a big smile. The team here at Choice believe there is a better way to transact. Not to mention keeping these fees from going offshore. We look forward to working with James and the team at Floriditas to bring a purposeful payments ecosystem to life over the coming months.
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Kia kaha
Alex & The Choice Team
