Wanna flip burgers instead of coins this crypto winter? FriesDAO certainly does.
The crypto group plans to start a fast-food franchise following ConstitutionDAO’s “let’s buy (and govern) a real-world asset with crowdfunded tokens” playbook.
On Saturday, the self-proclaimed decentralized autonomous organization (DAO) will start a $9.7 million fundraising drive. In return for Ethereum-based USDC, benefactors will receive tokenized voting rights over which chain restaurant FriesDAO buys.
“You are going to have voting rights that influence decision making on the acquisition of a fast-food restaurant,” Bill Lee, a project adviser, told CoinDesk.
One thing token holders won’t get is ownership rights to FriesDAO’s franchise, a stake in its profits or final say in its business – at least not at first.
It’s simply an Ethereum-based membership coin – with a side of influence.
Such are the realities of U.S. securities laws, project leads say.
“It would be beautiful and wonderful for us to be able to sit down and say this token represents a direct ownership in a Subway, in a Wendy’s,” key project contributor Brett Beller, who co-founded the booze delivery startup Drizly, said. “You cannot do that because of the way the SEC (Securities and Exchange Commission) has actually laid things out.”
FriesDAO – which hasn’t yet decentralized, and isn’t yet autonomous – cannot treat its token-holding denizens as business partners with an ownership stake. Doing so would be like starting a grease fire in the SEC’s cafeteria, and Gary Gensler, the agency’s chairman, doesn’t like grease fires.
Bridging to business
FriesDAO is also pragmatic about pitching a “DAO” to brands. Showing up at McDonald’s headquarters with 10,000 internet friends’ crowdfunded coins won’t likely work. “DAOs are still too ‘exotic’ to serve as a bona fide business partner,” Lee said.
“We’re going to need some sort of external organization or contracted organization to actually acquire the fast-food stores for us, and so to make that a legally binding thing,” he said.
When asked why FriesDAO wants to buy a franchise, instead of spining up a fresh restaurant, Beller cited the omnipresent clout of mega-brands. “You’re kinda being handed the business in a box,” he said, adding that franchises are the “easiest possible situation” to showcase crypto governance.
FriesDAO might be best understood as an early stage, if slightly watered-down, proof of concept for what DAO maximalists seek: making on-chain governance a meatspace reality. It’s a normalization force in a world waking up to the powers and perils of crypto.
“We believe that when a company starts a business, they should sit down, and they should be able to look at a set of tools, a B Corp., a C Corp., an LLC, a DAO,” and choose the one that fits their needs. He cited “individual creators” as one group particularly well-positioned to make use of DAOism.
Within this model, the membership tokens serve as a kind of social currency. By bringing together contributors under a common idea (but not an enterprise, and certainly not one with the expectation of future profits), FriesDAO can find the “right personnel very quickly,“ Lee said.
FriesDAO’s Discord channel sported 4,425 “crew members” as of late Thursday, and among them were three “general managers,” two “assistant managers” and seven “shift supervisors.” Participants posted the occasional Golden Arches meme and volunteered their services on an “I-want-to-help” channel.
“Letittie (🍟,🍟),” one member of the Discord channel who said he planned to donate, told CoinDesk in a chat that he was enthralled by the “innovative” way FriesDAO sought to blend “decentralized governance” with business management. “It will have to prove itself of course,” he said.
Other users said FriesDAO’s transparent leadership – Lee and Beller have thrown their real-world identities behind the project – had the expertise to deliver on the project’s goals. (Indeed, Beller, who said he’s already begun talks with possible partners, acknowledged his industry experience helps open doors.)
A handful cited the potential for crispy token riches, memes (“we like the fries,” one said), mainstreaming crypto and moon missions, as well as strong leadership.
“I don’t think these guys would run off with our liquidity,” Beansthe3rd told CoinDesk, “but just the idea of a token revolved around owning fast-food franchises is pretty hilarious.”