"Radiohead makes most of its income by touring, so even if they lose money on the album, but get more popular, they can just go on tour. A restaurant has no oth

"Radiohead makes most of its income by touring, so even if they lose money on the album, but get more popular, they can just go on tour. A restaurant has no other way to get that money back." This is the crucial point. The Radiohead model is not applicable because for them the albums is a publicity machine that feeds into their real business: concerts, memorabilia, etc. Think Google, every free service/tool/platform they offer funnels into their main search business. I think for big chain restaurants, like Panera, this may make sense. The loss they suffer from 2-3 stores is more than offset by the huge publicity they gain, but they cannot do it widely. For small unknowns it doesn't make sense to do it continuously but they make try it for short periods of time. Similar to how small businesses tolerate Groupon's huge 50% commission. Doing this as a short (e.g. 2-3 month) experiment also gives you an excellent indicator of the perceived value of your service.