Blockchain announcement sends stock of Hooters franchisee soaring [Updated]

The stock market loves blockchains. Last month, the Long Island Iced Tea Company rebranded itself as Long Blockchain and saw its stock price triple. On Tuesday, restaurant company Chanticleer Holdings saw its stock soar by 50 percent after the company announced that it would be moving its reward programs to the blockchain. The company owns several burger brands and operates a number of Hooters restaurants. It also holds a minority stake in Hooters of America, the parent company of Hooters.

"Eating a burger is now a way to mine for cryptocoins," said Dennis Becker, CEO of Mobivity, the company that's helping Chanticleer jump on the cryptocurrency bandwagon. "Every meal enjoyed at any Chanticleer Holdings brand will accrue currency for the consumer that can be used for future meals or traded with other consumers."

Chanticleer Holdings owns a number of different brands, most of them burger-related. These include Little Big Burger in the Northwest, American Burger Co. on the East Coast, and the national BGR chain.

Evidently, the stock market believes that putting these restaurants' reward programs on the blockchain raises their value by around 50 percent.

What's the advantage of blockchain-based rewards?

"Mobivity Merit is real cryptocurrency, leveraging the same infrastructure and principles of bitcoin, Ethereum, Ripple, litecoin," Chanticleer CEO Michael Pruitt says in the company's press release. Rather than being locked into one specific rewards program, customers will be able to transfer their reward points across multiple restaurants. Meanwhile, the Mobivity blockchain will help companies track their customers' preferences, allowing them to provide more personalized service.

"Each brand owns the data about [its] interactions with a consumer, but the consumer owns the data about ALL of their transactions across all brands, stored in the distributed ledger of blockchain technology," according to the company statement.

Chanticleer expects to roll out the technology across all of its restaurant brands before the end of 2018.

An important bit of context here is that Chanticleer is not a particularly valuable company—even after the recent jump. On Friday, the company's market capitalization was around $8 million. The blockchain announcement pushed it up to $12 million. In a world where all dogecoins in circulation are worth around $1 billion, Chanticleer Holdings is a small fish. So it doesn't take much to make its stock soar.

Correction: This story originally said that Chanticleer is the parent company of Hooters, but it's actually a Hooters franchisee and minority shareholder of Hooters of America.