A Melbourne hospitality institution with 13 locations around Australia serving up more than just pancakes
The Pancake Parlour is a Melbourne hospitality institution that needs little introduction. Recently celebrating its 60th anniversary, this family-owned restaurant with 13 locations knows a thing or two about longevity and how to keep diners returning year after year.
Their loyalty program, Lovely Rewards, is much more than a paper punchcard for pancake-lovers. It’s a revenue-generating powerhouse that has amassed over half a million members since it launched in 2017.
But until recently, the systems behind the loyalty program weren’t flexible enough to help them grow and were causing friction in the operation.
“Over the past 10 years we introduced technology that suited the business needs at the time. We just kept building on top of what we had, but no one was looking at the bigger picture or the future needs of the business,” explains Head of Digital & Strategy, Steven Babo. “As a result, the employee experience started to suffer and so did the customer experience. It was time to strip it all back and look at what was most important.”
Their first step was to relaunch Lovely Rewards with a brand new refreshed loyalty app, with me&u order and pay integration. Steven Babo (who celebrated his own 10 year milestone with The Pancake Parlour!), shares his insights into how he’s evolving technology in the business to build on six decades of success.
The thoughtful approach
When reviewing their technology stack, The Pancake Parlour was faced with two options; go for an all-in-one solution or assemble the best solutions for the job. “To future proof our business, we went for the ‘best in breed’ approach, looking for the best technology and partners who could integrate,” says Steve.
“Picking the right loyalty partner was really crucial for us,” he continues. “Loyalty is a really tangible revenue stream, it drives around 25-30% of revenue for the business. That was the main thing we had to get right because we knew the value was there,” says Steve.
“But unless you’re a mammoth business like McDonald’s who can create their own bespoke solution, most loyalty platforms are peripherals for POS systems and have a lot of limitations. They’re a bit set-and-forget. After our past experiences, we wanted versatility so finding that was a challenge,” explains Steve.
The innovative solution
While researching the best solutions, The Pancake Parlour turned to me&u for advice on what was in the market and how a new loyalty program might work with their menu ordering system.
“We engaged with me&u to discuss what was possible and who they saw as emerging players in the hospitality industry. We really appreciated their experience and expertise, me&u showed us that they really wanted to meet our needs,” explains Steve.
This advice and research led them to relaunching Lovely Rewards with a white-label loyalty engine, with me&u order-and-pay integration.
Customers can still use me&u QR-code ordering at The Pancake Parlour without an app, but by downloading Lovely Rewards they unlock unique member perks, earn points, and can even use rewards points to pay. This gives customers extra incentive to use me&u ordering within the app, which gives a boost to upsells and topline revenue for the business.
“The new app looks completely native and having information handled in real-time has made a huge impact on the customer experience. me&u and our loyalty provider are different platforms but look and function like one cohesive ecosystem. This integration has ironed out a lot of the ‘quirks’ and clashes with our POS that were setting us back. Challenges that we don’t even have to think about now,” Steve remarks.
The strong results
Taking the time to assess the entire operation and introduce purpose-built technology began to pay off instantly for The Pancake Parlour and Lovely Rewards.
“We’ve seen a really positive impact in reintroducing the app and the customer response has been great,” says Steve of the relaunch. He’s also got the data that show the makings of a major success story, proving that loyal customers spend more, more often.
The new Lovely Rewards app launched with the Winter Parlour menu in June 2025. Within the first four weeks, compared to the same period last year:
- Order volumes went up 33%
- Menu upsells went up 63%
- Repeat visitation went up, with second-time visits up 30% and third (or more) up 8%
- Overall sales went up 14%
And this is just the beginning, with more features rolling out through the year.
While Steven notes that getting everyone on board wasn’t always smooth sailing, a willingness to flip the status quo is well worth the pay off.
“Internally, about 50% wanted to keep the status quo because it was thought to be easier,” he explains. “My advice to others in the hospitality industry would be to embrace the change. Get all departments involved and excited about the future vision. New processes and change will be needed, but it will ultimately improve business performance and is really worthwhile,” says Steve.
