With 70% Bitcoin reserves, how does Canadian fast food restaurant Tahini's compete with McDonald's?

By Juan Galt

Compiled by: TechFlow

Tahini’s, a Canadian fast food chain, boldly embraced Bitcoin in 2020 as a way to fight inflation and compete with industry giants like McDonald’s. Here’s their Bitcoin financial strategy.

Tahini Restaurants, a Canadian fast-food chain specializing in Mediterranean and Middle Eastern cuisine, has been continuously optimizing its strategy since integrating Bitcoin into its operations in 2020. Today, Bitcoin accounts for more than 70% of its reserves, a decision that played a key role in its expansion to 62 restaurants in just over a decade.

“We keep putting more and more money into Bitcoin,” Omar Hamam, CEO and co-founder of Tahini, told Bitcoin Magazine. Omar and his brother Aly Hamam opened their first restaurant in London, Ontario in 2012. Since then, Tahini has grown to 62 restaurants across the country. In 2020, they were inspired by Michael Saylor to adopt an early financial strategy in Bitcoin. This bold move provided them with a reserve of funds that allowed them to compete with the giants of the fast food industry.

“We’re competing with McDonald’s and Chipotle,” Omar said. “Those companies have a hundred times more money than Tahini does. So having this advantage — a financial strategy that makes us more financially robust and preserves wealth across time and space — is the best decision we’ve made for our business.”

During the development process, the company implemented a number of innovative strategies, including the deployment of Bitcoin ATMs in many franchise stores and a new media strategy. According to Ali, this media strategy has brought them three billion views across all social media platforms in the past five years, including a YouTube channel with more than 3.2 million subscribers. Of course, their Bitcoin financial strategy is also a highlight.

Ali's obsession with Bitcoin: From the devaluation of Egyptian currency to inspiration after the epidemic

Tahini’s Bitcoin strategy is primarily driven by Ali Hammam, who was inspired by the profound impact his family had suffered from the sharp devaluation of the Egyptian pound over the past 20 years. The ongoing hyperinflation hit his family hard, and this experience made him discover the potential of Bitcoin during the market crash in March 2020.

“I’m from Egypt, and over the past two decades, I’ve seen the Egyptian pound devalue by about 85 percent. I saw my family struggle, my parents struggled. Their savings were almost wiped out over the years in Egypt. Sometimes, in Egypt, it would happen like a flash crash. The government might devalue the currency by 50 percent in a month,” recalls Ali.

In March 2020, as the pandemic triggered market panic, the price of Bitcoin plummeted from a high of $10,000 to $4,000. "I bought a little at the time, purely because it had fallen so much, and I thought, let's just buy some and try it out. ... But as I studied more and more, I fell into the rabbit hole of Bitcoin. In the next few months, I kept buying more Bitcoin. When you first come into contact with Bitcoin for the first three months, it almost occupies every corner of your life - listening to podcasts, reading books, and constantly buying." Ali explained.

After the market crash, Bitcoin rebounded to about $10,000 and consolidated around this price for several months. At the same time, governments around the world have been injecting trillions of dollars of newly printed money into the economy in response to the epidemic. The United States has cut interest rates to zero, and Canada has begun to issue epidemic subsidies to eligible residents. Omar recalled, "The government is just printing money all the time. And it's not just the Canadian government, almost all governments are doing this. So, we know that inflation is coming." At the same time, Bitcoin's block reward halving also occurred during that time. This fundamental factor contributed to one of the most spectacular bull markets in Bitcoin history.

This was the era when Michael Saylor entered the Bitcoin industry and became the most famous Bitcoin supporter. However, Saylor's speeches and documents on how to build a corporate Bitcoin strategy and how to convince the board of directors or other business partners were just beginning to become popular in podcasts, and Bitcoin financial strategies were still in their infancy.

Once Ali was fully "in" with Bitcoin, he began promoting it to his family. "I started promoting Bitcoin to my business partner, brother, cousin, and they started buying it personally." Ali explained that buying Bitcoin personally is simple, but using the company's reserves is much more difficult. "It's not a quick process. I wanted us to put the company's funds into Bitcoin, and they were hesitant.' It was a crazy idea. 'One way or another,' we kept discussing back and forth until Michael Saylor announced the first purchase. I had all the accounts and preparations ready. So, when Saylor bought the first batch of Bitcoin, it pushed us. A week later, we put all the company's funds into Bitcoin."

Purchase price, regular investment strategy and persistence in bear markets

Tashini’s Bitcoin investment strategy differs from today’s public companies, which issue shares (and other financial instruments) to buy Bitcoin and increase their reserves. As a private company that began accumulating Bitcoin before the U.S. approved ETFs, Tashini took a simpler approach: buy as much Bitcoin as reasonably possible each month, and never stop. According to Omar, Bitcoin now accounts for more than 70% of the company’s reserves.

Their timing was excellent, starting with Bitcoin at around $10,000. However, the so-called “periodic investment strategy” (Dollar-Cost Averaging, DCA) works well at any price, even in a bear market.

For example, if you invested $1,000 every two weeks in buying Bitcoin at the peak of the 2021 bull run — when the price was close to $70,000 — each time you bought at a lower price, you would lower your average purchase price. The result is that when the bear market ends — for example, when the price exceeds $30,000 — you will be at breakeven and well positioned for the upcoming bull run. The only requirement is to have a long-term investment mindset.

"Buy every month, buy every month. It doesn't matter if it goes up or down. I know it sounds too simple, but it's actually the only way to do it. Right. You just buy, don't try to beat the system unless you're really good at it. Set aside a portion of your money every month and it will work. If you look back over the last four years, you'll see that you've doubled your investment by 2 to 30 times," Omar explained. He added, "I've had this conversation with a lot of people. Friends, family, everyone. I always tell them, listen, start somewhere. Don't invest too much and see how it goes. Let's say you invest $1,000 and watch it go. If that $1,000 becomes $1,200 or $1,500 next year. Imagine what would happen if you had $100,000 or $1 million?"

While there are no hard and fast rules about the best frequency for a regular Bitcoin investment strategy, whether for an individual or a business, Tahini opted for monthly purchases because it fits in with their accounting process. "Every month we have a profit and loss statement. Every month we see our profits and losses. We decide at the end of the month, okay, we're going to set aside this much," Omar explained.

As for the amount to invest, Omar explained that they don't invest a fixed or percentage-based amount. "It also depends on whether we are investing in the business this month? What are our expenses? Are there any large payments? Sometimes there are a lot of expenses at the end of the year. So you have monthly highs and lows and so on, but the key is to keep investing money. How much to invest each month is what you need to decide."

Bitcoin, sell or pledge? Tahini’s financial strategy and payment challenges

In terms of how to realize Bitcoin monetization, Tashini chose a simple strategy. When the time is right and the business needs are urgent, they will sell some of the Bitcoin, and then buy it back later according to the standard regular investment strategy (DCA), and integrate capital gains tax into the accounting process. Omar explained: "When you need to reinvest, you always need funds. For example, you want to do a big marketing campaign as a chain, right? You need to use these reserves. With funds, you have power. The more funds you have, the more freedom you have to make the right decisions for the company, not just do what you can afford."

Accept the challenge of integrating Bitcoin payment and POS system

As a first step towards Bitcoin integration, Tahini explored the possibility of accepting Bitcoin as payment in the restaurant. However, a host of challenges forced them to pivot. Many of these challenges still exist in businesses around the world, involving the closed source code and walled garden model of popular payment processing systems.

“A lot of these point-of-sale system companies do their own payment processing, and their systems don’t have the capability to accept Bitcoin,” Omar explained. Most of these systems are closed source, have restrictive APIs, and are difficult to integrate into the Bitcoin economy, which has been a barrier to Bitcoin payment adoption since its inception.

However, merchant adoption friction is more than just a hurdle for POS systems; the list of features merchants need to remain competitive is complex, and most Bitcoin payment systems still lag behind:

“POS systems are not just about payments. It’s also about how you build your menu in the backend. POS systems provide reports on what you sold, when you sold it, how the store is performing, which times are busy, which times are not busy, and how to request what you ordered. It’s pretty complicated, right? So payments are just the last piece of the puzzle. So when we choose a POS system, it’s not just about the payment system, it’s also about what they do and how good they are as a system.”

Additionally, POS systems that integrate Bitcoin will also need to support fiat currencies to be viable for the average merchant today, further raising the barrier to entry and competition.

So, Tashini chose the next best option: they partnered with Canadian Bitcoin ATM company Bitcoin Well to install Bitcoin ATMs in 10 restaurants, choosing to receive all profits from the machines in Bitcoin and distribute them to separate accounts for each restaurant. Although Ali reports that these ATMs only bring in about $250 in revenue per month, these "sats flows" (as some in the industry call them) have accumulated since 2021, and as the price of Bitcoin has risen, each restaurant now has a Bitcoin balance of more than $40,000, which is very significant.

Still, Omar is optimistic that these barriers will be removed, as interest in Bitcoin payments is stronger than ever. "I think Bitcoin is growing fast, a lot of companies are adopting it, people are learning more about Bitcoin, and their awareness of Bitcoin is growing. So, I think it's just a matter of time."