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Key Takeaways
- A restaurant owner combined his passion for technology and food to address invoicing issues.
- Today, more than 12,000 restaurants utilize his software to track inventory and profits more accurately.
- His primary goal is to empower business owners with the confidence to understand their operations day to day.
A lawyer, a banker and a tech entrepreneur walk into a restaurant.
It sounds like the setup for a bad joke. For Bo Davis, it became the start of MarginEdge.
After selling a software company, Davis was living in London when he and two friends began talking about what to do next. The lawyer convinced the group to open a restaurant, so they hired the executive chef from a favorite restaurant, moved to Washington, D.C., and launched their first Wasabi location.
But that partnership didn’t last long.
“The lawyer lasted 60 days,” Davis says. “The banker lasted a year. I like to tell people I was clearly the least intelligent of the three, because 20 years later I’m still in the restaurant business.”
Over the next decade, Davis became an owner-operator, opening roughly a dozen restaurants under the Wasabi brand across the country. Along the way, he discovered firsthand how difficult it was to assess a restaurant’s financial health.
Everything looked good on paper: dining rooms were busy, The Washington Post ran three features on his restaurants and guests kept coming back.
“We thought we were making money,” Davis says. “We weren’t making as much money as we thought we were making.”
With a background in software, Davis started building internal systems to track expenses and monitor restaurant performance across multiple markets.
“It was ugly,” Davis says. “It was not MarginEdge.”
But it was the beginning.
As the restaurant group expanded into markets including California, Boston, Florida and D.C., those homegrown systems gave Davis and his team visibility into their business every day instead of waiting until the end of the month to understand how they had performed.
That idea eventually became MarginEdge.
The invoice myth
When Davis and his future co-founder started MarginEdge, they kept hearing the same thing: restaurant invoices were too messy.
Too many vendors. Too many products. Too many substitutions. Too many SKUs.
“There was no way you could automate the synchronization of all that information,” Davis says. “We were like, ‘Bullshit, we can do it.’”
More than a decade later, MarginEdge processed 290,000 invoices in a single week.
If the price of tomatoes changes, restaurants can see exactly what that means for the cost of a burger. Behind the scenes, MarginEdge combines AI and machine learning with a team of roughly 700 people who handle the exceptions that technology alone can’t solve.
Today, the company supports more than 12,000 restaurants. For Davis, though, the technology has never been the point.
“We are not a software company,” he says. “We want to be a service.”
That philosophy comes from his years as a restaurant operator. Every restaurant owner wants guests to leave happy. Davis believes technology companies serving restaurants should hold themselves to the same standard.
“It is our job to serve restaurant owners the way they serve their clients,” he says.
MarginEdge now helps restaurants track purchases, sales, inventory, recipes, accounting and cash flow from one platform, giving operators a clearer picture of their business every day instead of waiting until the end of the month.
The company also introduced a new business credit card designed to automatically capture restaurant expenses, helping operators track purchases that often fall outside traditional invoicing workflows.
For Davis, it’s another step toward solving the same problem that frustrated him years ago while running Wasabi: giving restaurant operators confidence that they know exactly what’s happening inside their business.
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