Olo Restaurant Rumors
Article on the rumors Olo is looking for buyer. Reforming Retail delivers remarkable analysis of situation. Meanwhile the market seems to slowing. First the cautions coming from McDonalds and Wendy’s that sales are slowing significantly. McDonald’s reported a 3% decrease in revenue and a 3.6% drop in U.S. same-store sales for the first quarter of 2025, marking the second consecutive quarter of decline-worse than analysts expected.
Summary of “Olo Review – Should Toast Snap Them Up?”
The article provides a critical review of Olo, a restaurant technology company, and evaluates whether Toast-a major competitor-should consider acquiring them. Here are the key points:
Olo’s Market Position and Customer Base
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Olo primarily serves large, multi-location restaurant chains, with limited penetration among independents and smaller brands.
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Their customer base is segmented into quick-service brands, full-service chains, enterprise groups, multi-location brands, and a small number of independents.
Strategic Review and Board Criticism
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Olo is reportedly under strategic review, possibly exploring a sale due to ongoing losses, shareholder dissatisfaction, and pending litigation.
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The article criticizes Olo’s board for being insular and loyal to the CEO, Noah Glass, leading to alleged mismanagement and a lack of accountability.
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The board is accused of prioritizing personal relationships and maintaining control rather than maximizing shareholder value.
Financial Performance and Management Issues
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Olo is said to have underperformed compared to its public peers since its IPO, with management accused of overstating market potential and using misleading financial metrics.
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The company’s growth projections are described as unrealistic, especially as digital ordering penetration has plateaued post-pandemic.
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Olo’s revenue growth is inflated by commingling payment processing revenues (Olo Pay) with SaaS revenues, obscuring the true performance of its core business.
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The company is criticized for excessive spending on R&D, sales and marketing, and general administration, far above industry benchmarks, without corresponding growth.
Failed Acquisitions and Strategic Missteps
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Olo’s acquisition of Wisely, a marketing automation company, is highlighted as a costly misstep that failed to deliver value or meaningful integration.
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The departure of major clients like Subway and Wingstop, who chose to build their own solutions, is seen as evidence of Olo’s weakening competitive position.
Potential Sale and Acquisition Scenarios
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The article suggests that if Olo were put up for sale, most private equity and strategic buyers would likely bow out due to Olo’s limited total addressable market (TAM) and lack of competitive differentiation.
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Toast and DoorDash are mentioned as possible acquirers, but both have reasons to hesitate: Toast prefers building its own products and lacks enterprise features, while DoorDash may be focused elsewhere.
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A merger with PAR, another industry player, could offer the most shareholder value, but past attempts reportedly went nowhere due to leadership resistance.
Conclusion
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The article concludes that Olo’s board and management have failed shareholders, and unless there is a major shakeup, any sale or acquisition process is likely to be fraught with ego clashes and poor outcomes.
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The overall tone is highly skeptical of Olo’s leadership and future prospects, suggesting that Toast (or any buyer) would face significant challenges in extracting value from an acquisition unless fundamental changes are made.
In essence, the review argues that Olo’s problems are deeply rooted in governance and execution, making it a risky or unattractive target for Toast or other potential buyers unless there is a dramatic overhaul of leadership and strategy1.
Additional Olo Restaurant Platform links
- Restaurant Payment POS Systems – Olo – The Litigations
- Olo Restaurant News – Wisely Acquisition – Kiosk Industry
- OLO Part 3 – Failed Acquisition – Retail Systems
- Restaurant POS – Toast Hangs Back While PAR and Olo Battle
- Kiosks Adoption Rate – Restaurant Self Order – Thaeler
- Self Order Restaurant Kiosk Buyers Guide