NY Launch Pod: Welcome to the New York Launch Pod, the New York Press Club, award-winning podcast highlighting the most interesting new startups, businesses and openings in the New York City area. I’m your host and New York attorney Hal Coopersmith, and in this episode, we are speaking all about offices and how office workers are eating. Our guest Tximista Lizarazu, the founder of Fraîche though about bringing fresh, quality food directly to the office in a way that benefits restaurants, employers and employees. Listen to the episode to find out how Fraîche is delivering delicious meals to its offices, engaging employees and a whole lot more. But before we go to the episode, we have a sponsor RezCue, New York State’s premier residential rental compliance platform for landlords. Rental laws in New York City are difficult to manage and, Rezcue helps you follow the law. If you are a landlord who wants to keep up with inflation, you need Rezcue. For example, you may not be able to increase the rent by the amount you thought you could, Rezcue helps solve that problem and a whole lot more. Go to Rezcueme.com and enter in some simple information and Rezcue will take care of the rest. That’s Rezcueme.com, and with that let’s go to the interview.
Tximista Lizarazu: Thank you.
NY Launch Pod: So what is Fraîche?
Tximista Lizarazu: Basically Fraîche is a new generation of cafeteria. We are trying to bring good quality food to offices, using smart rich technology that we built internally and the idea is that we are delivering fresh food every day to offices placing those products that are coming from some of the best restaurants in the city, in those fridges and so people have 24/7 access to this product. They can download the Fraîche app on the app store to be able to unlock the cage so they can see in real time what there is in this fridge, the full transparency of all the brands, the products, the different meals that are inside.
NY Launch Pod: When did you have the idea for your company?
Tximista Lizarazu: I had the idea now in a bit more than four years ago. We launched with my business partner, Bernier, in 2019. We launched our first five locations, just before the summer 2019. So six months before COVID, good sense of timing for us, but before that I was working with the founder of Le Pain Quotidien, LPQ the bakery chain and I came to New York to work with this guy and it was kind of my mentor and I’ve been working with him for more than a year and I was in the street food industry, before that I was trying to revolutionize with the industry of food carts. So bringing also good quality food to people in a more convenient way and it gave me the idea of Fraîche and, uh, that’s why I started Fraîche.
NY Launch Pod: So you mentioned that starting the company and being in your first location six months before COVID, wasn’t great timing. There’s been a lot of talk about offices and office occupancy. Why do you think that the world needs to revolutionize its office cafeteria?
Tximista Lizarazu: I mean, there were a lot of different stages, as you can imagine, for the last three years, for one year on the app, we built the entire technology. So the smart fridge, mobile app, a dashboard where we can see what’s happening in the entire platform, what people are consuming, all those things and we wanted to be ready for the post COVID world, basically and now the thing is all the leaders are trying to bring back their team at the office, so all the leaders need to find new ways to make the office, more exciting and Fraîche is part of those options. Food is maybe the most, most important perk you can get for your employees at the office and the thing is, when you have only 50, 60, 70% of the people at the office, a cafeteria like it existed for the last three years, doesn’t really make sense anymore because the infrastructures are, big. You need to have a cook, you need to have a kitchen. You need potentially to have a full floor just for the cafeteria and when you don’t have enough people, the economics don’t make sense. And what we do with Fraîche is that instead of having a full kitchen with cooks, we just have a few fridges for the employees to have access and the products instead of being made directly inside the building it’s made. We are supporting the local economy, working with all those amazing restaurants in the city, and distributing these products so people can have 24/7 basically.
NY Launch Pod: And so how do you partner with restaurants?
Tximista Lizarazu: We have very high standards in terms of quality, sustainability, and we are, listing the different concepts that are cool enough only local concepts and then we’re going to study those different concepts and decide if they could be part of our platform if they are ticking the boxes in terms of our standards. And then we are just reaching out to them and, giving them the opportunity to be in our platform and to have access to all the clients that we have basically in the city, that’s the way it works.
NY Launch Pod: And what restaurants have you partnered with now?
Tximista Lizarazu: So the main partner that we have is Le Botaniste. It’s an amazing plant base organic concept. We have four or five locations in the city. They were the first ones to trust us actually. We’re working also with Mille Nonne. It’s a very cool Italian concept. We are working with Hungry House also, it’s a lot of different bowls and the idea is to, we don’t want have thousands of brands in the portfolio, we just want some of the best food concepts of New York, and we want to have the best for every types of cuisines, so there is enough diversity, basically for the employees to be excited to come to the Fraîche fridge every single day. We have options for any moments of the day. So we have lunch options, dinner options also, if you want to stay late at the office and you need something to eat, and then we have a couple of snacks and beverages, and again, provide certain needs for any moments of the day.
NY Launch Pod: And what are the economics, who pays for it? Is it the employee or the employer?
Tximista Lizarazu: So at the moment, all the clients that we have, all the companies that we’re working with are subsidizing the food for the employees, at least partially. So it doesn’t mean they’re going to pay for everything that is in the fridge, but they can give credits to the employees like a stipend basically. So they can give $5, $10, $20 a day to use at the Fraîche fridge for the employees, we call that the Fraîche credits. Every morning on your mobile app, as an employee, you are going to receive your credits. If let’s say the example is $20 a day, you don’t have 100 bucks a week, you have $20 a day, which is very different because if you don’t use it, it goes back to zero and at the end of the month, we’re going to reconcile what has been used by the employees. And we’re going to charge a company for what has been used by their employees and then there is a service fee also paid by the company to have access to the platform, to have the mobile app for all the employees, the smart fridge refilled every day with the creation of products, all those things. And if the employees are going above the credits that is given by the company, they’re going to be charged directly on their accounts.
NY Launch Pod: And in the locations, which you’re in right now, how has employee reception been? I imagine you must have some data on this.
Tximista Lizarazu: Yeah, of course. I mean we have different sorts of clients at the moment, in the financial services world, we are also in the luxury industry because they really want to take care of their employees as much as possible and in those industries also, they really want to have as much employees back at the office. So they’re working with us basically either to thank employees for coming back or just to make the office a cooler place. So they are excited to come back by themselves, but the reception has been very good in all the locations that we have so far. We have a few companies also in the tech world where people are not back every day in the locations. The first one I mentioned, it has been very exciting for all this craze, because for some locations they never had the opportunity to have food ideas before and because of the economies and because of this new business that we created, it’s possible now, because before you needed to have a cafeteria to be able to have access to food but when you have a smaller office, like an office of less than 200, 300 people, you cannot have a cafeteria. So we are giving the opportunity also to smaller offices to have a cafeteria and so people can have access to food without leaving the office.
NY Launch Pod: And so how many meals are employees consuming? How many meals are you delivering and selling?
Tximista Lizarazu: Yeah. We have 12 locations at the moment, approximately are they a bit less than one of the meals per location? So we have close to 1000 meals a day, something like that. So we’ll be five to 7,000 a week.
NY Launch Pod: That is a lot of meals. How are you stocking and delivering? Who’s responsible for all this and quality control?
Tximista Lizarazu: We are doing that internally. The quality control we are working with a partner that is coming to the hub to pick up food every morning and deliver that to all those locations. We are doing that with electric cargo bikes. We are very big into sustainability. Sustainability is really at the core of the business. We bought packaging with the food that you are seeing with the logistic, everything basically. So yeah, we have cargo bikes, electric cargo bikes, going to all the locations every morning.
NY Launch Pod: And that’s coming from the restaurants or that’s coming from a central hub?
Tximista Lizarazu: So we have a hub in the city and the restaurants are either delivering us directly at the hub or we can pick up depending on the locations. And then from the hub, we are delivering to all those locations. The logistic is very sustainable in a way that if you compare our logistic to Grughub, all those big deliver companies, the fact is we are delivering, you know, 50 to 100 people at a time, that’s with them delivering to one person at a time and, the routes are basically the same ones every day. So it’s very easy to anticipate a big economy of scale also to be done.
NY Launch Pod: And how does Fraîche make money?
Tximista Lizarazu: So we’re making money with the service fee that the companies are paying. We’re making money with the Fraîche credits that the companies are paying for their own employees. And then we’re making money with the food that is purchased directly by the employees when they go above the credits that the companies are giving them, basically. Those are the three sources of revenue.
NY Launch Pod: And what if I’m a company that says, you know what, we’re in New York City and when an employee walks out the door, they have all the options that they want. In addition to that, they have options for delivery or anything else like that. What’s the advantage for a company to have your vending and delivery system, as opposed to giving employees a stipend on their own that they’re able to use when they come into the office?
Tximista Lizarazu: First thing I will say is that it’s not really true, that there is that many options in New York, actually show me.
NY Launch Pod: It’s not true, not true at all.
Tximista Lizarazu: It’s not true. It’s your Midtown. In Midtown, you have like terrible options, the only good options are in, street grains, but you have a lot of like delis and street food, but it depends on the area. So for some of the clients that we have, they don’t have that many options around. Then regarding the delivery the, the main difference is that with Fraîche is it’s 24/7 access and it’s instantly, you don’t have to wait 45 minutes to be delivered, potentially you have a problem with the delivery guide. So we are just making it 200 times more convenient. You don’t have to pay for delivery. You don’t have to leave the office and wait in line and it’s a way also for employees to regroup. They lost that during COVID, so it’s an opportunity to spend some time together, it’s good for the culture. We really want all those employees to spend time together instead of leaving the office by themselves, waiting in line for 15 minutes and coming back, and eating, basically you are winning this time that you were losing in the past. And then we are creating some of the best concepts of New York. So we only have healthy, good food from good brands accessible 24/7.
NY Launch Pod: That all sounds wonderful. How were you able to get more clients and tenants to use Fraîche?
Tximista Lizarazu: There are a lot of different strategies, for now the thing is we’re still a young startup and we need as much visibility as possible. So, we’re doing a lot of events, meeting as many people as possible, and we’re linking up. Everyone is trying to support the initiative because we’re trying to do something good for the employees with good, healthy food and in a very sustainable way. So just trying to be in touch with as much leaders as possible, as much HR as possible. The leaders are doing that for the employees and on one side, they want to take out their employees even more than before because of the pandemic and everything that happened in the last two, three years. And on top of that, they need to make their offices a very exciting place to utilize their offices, that they are paying big rent for. So I think an empty office doesn’t really make sense. So if you have an office in New York, if you are paying rent, and you are going to continue to pay rent for the next five years, you need to make sure it’s just as much as possible. So you need to give something to your employees, to make them again, very excited to come back and food is very, very important.
NY Launch Pod: Well, it’s certainly a hot topic with bringing employees back into the office. And one of the things that we talk about is the opportunity and challenges of doing business in New York and for your business, certainly where it’s been impacted by COVID and office occupancy. Could you talk about the opportunities and challenges for your business, particularly around the pandemic.
Tximista Lizarazu: When we started the business before the pandemic, we thought we had a great idea and we wanted to revolutionize, again, this industry of cafeteria while the technology was the most important piece, and as all those giants didn’t really invest in technology and we wanted again to make that more flexible, more convenient, but the thing is now after the pandemic, it makes even more sense because as I was telling you at the beginning, all those companies need more flexibility in general because the occupancy is different. So they need more flexibility with the services. So they don’t want to have a 5 year commitment, they want to make sure the food service is flexible. For us, the, the market is insanely big because we can work with any offices of more than 40, 50 people, basically whereas a cafeteria needs at least, 300, 400 people. So the market is way bigger. So we can go to all those big offices as well, and potentially work with cafeterias or at one point, we also contract against cafeteria but we can, especially at the moment, work with smaller offices to give them the opportunity to have a cafeteria which was not possible before. So New York market is very big. It’s 10 billion dollars just for lunch in New York. There are so many opportunities for us.
NY Launch Pod: And what’s the cost of one of your meals?
Tximista Lizarazu: It’s going to fluctuate between $12 up to $16 depending on the concept.
NY Launch Pod: And what’s the cost to an employer for all their fees.
Tximista Lizarazu: It’s 1.5 K up to 2.5 K, depending on size basically, but close to that monthly.
NY Launch Pod: Monthly. Talk about the food in New York, because you said that there weren’t that many options, but I always thought that New York had the best food.
Tximista Lizarazu: And New York has amazing restaurants. Of course, the food scene is incredible in New York but I was more talking about what is accessible for lunch in Midtown. So many new clients that we’re talking with more are saying that there is nothing good around them. There are options, but not great options. So we are trying to bring the best of New York directly in those offices and we’re trying to do it in a very transparent way because a lot of concepts are good but they don’t talk about where the food is coming from about, where the ingredients are coming from. So we’re trying to be very transparent. We’re trying to be very local also, and this way have as much impact as possible in the food space.
NY Launch Pod: Well, that is a wonderful note to end things on. Tximista Lizarazu thank you for stepping onto the New York Launch Pod and sharing your time with us. How do people find out more about you and Fraîche?
Tximista Lizarazu
Thank you so much, Hal. We have our website. It’s Fraîche.io and we are pretty accessible on Instagram and LinkedIn as well on Instagram it is just @fraichekiosk, you can find us there and LinkedIn’s going to be Fraîche as well.
NY Launch Pod: And if you want to learn more about the New York Launch Pod, you can follow us on social media @nylaunchpod. And for transcripts of every episode, including this one, you can visit nylaunchpod.com. And if you’re a super fan of the show, Tximista are you a super fan of the New York Launch Pod?
Tximista Lizarazu: I am for sure.
NY Launch Pod: If you’re a super fan, like Tximista, please leave a review on Apple Podcast. It is greatly appreciated and does help people discover the show.
Tximista Lizarazu: Thank you so much.
