"A Fuddrucker, a Quizno, and a Kona Grill walk into a bar..." | spooky kitchens #10

March 18th, 2022. Look at these brands in the news. What is this, 2002?

Happy Friday y’all,

10 issues in, many more to go! 🤞

First thing’s first: you can also read this on the web, with slightly better aesthetics than your inbox. Just FYI.

We’re all news no feature this week! Feels like business is on spring break — or at least, major stories. Or I’m missing things (highly possible). Anyway. To the headlines!

So what happened this week?

🍔 Big burger chain Fuddruckers beefs up with new Austin ghost kitchen (Eric Sandler, Culture Map Austin). Fuddruckers joins fellow tenants Grimaldi’s, Dog Haus (+ several virtual Absolute Brands), Pollo Campero, and Hawaiian Bros at Kitchen United’s Austin Mix location. This is Fuddruckers’ second expansion with Kitchen United, after opening in Houston inside the second Kroger/Kitchen United ghost kitchen.

💰 Digitizing the kitchen: VCs turn up the heat on restaurant tech investment (Christine Kilpatrick, Crunchbase News). This is a nice, non-comprehensive summary (and useful graphic) of restaurant tech investment over the last few years. Nothing especially new, but one item of note is that while the overall number of investments was down last year, the total spend on rest-tech firms was up. Fewer investments; more money. Tech appears to be one part of the restaurant industry that has not slowed over the last couple years.

📈 This startup wants to make it easier for local restaurants to expand beyond their hometowns (Erin Cabrey, Morning Brew). A profile on Local Kitchens (formerly Virtual Kitchen Company) a ghost kitchen that refuses to call itself a ghost kitchen, citing that ghost kitchens “aren’t optimized for pickup and typically focus on new, rather than existing brands.” Which, if you take one look at both pickup and national brand-heavy Kitchen United, is a head-scratcher. Even CloudKitchens, C3, and REEF today often are set up for customer pick-up, and all serve chains. It’s an odd distinction to make. Aside from that, Local Kitchens’ model is a bit of a mix-and-match of other ghost kitchens — offering the all-in-one semi-franchise solution of REEF plus the order-from-any-brand tech of Kitchen United. The hybrid company is playing catch-up in the not too crowded but not not crowded space; Local Kitchens’ last funding round was $25M in 2021 and it currently has 6 locations.

🚫 Barcelona aims to ban ghost kitchens and dark markets (Tzvetozar Vincent Iolov, The Mayor). Residents of the city of Barcelona are getting tired of local ghost businesses; namely, the constant traffic around the sites (which seem to be located in residential areas) as well as the noise and smell of the operations. This is far from the first instance of locals complaining about specifically these issues; Deliveroo’s ghost kitchens in the UK have faced similar complaints for years. But for such a large city to begin putting firm restrictions into place means that either the complaints are many or the problems are serious (or both). US-based ghost kitchens haven’t faced too many of these types of grievances over the years; though Chicago and New York have had their tussles with operators. May be something to watch over the coming years as US ghost operations grow within their cities of influence.

🍖 Reef Technology partners with The One Group for fine- and casual-dining collaboration (Holly Petre, NRN). Is there as odd a couple in restaurant groups as capital-F Fine-dining steakhouse STK and the bankrupt-Lazarus Kona Grill? Probably. There are a lot of restaurants (though no other combos immediately spring to mind). But it still tickles me. Both of them have partnered with REEF under The One Group (Neo?), which makes plenty of sense for Kona Grill, but is a little more intriguing for STK as fine dining brands have hardly forayed into the ghost space. I’m looking forward to seeing what the menu and strategy is for STK-to-go; they’re not known for gambles.

🥷 Is Ghost Kitchen Brands a QSR Concept in disguise? (Arthur Robert, Franchise Times). “There’s no customer service,” says Marc Choy, president of Ghost Kitchen Brands (in the article). It appears to be a…positive attribute? Mr. Choy follows up this statement by citing Quizons as “a prime example” of an “ideal partner” for the company. On the one hand, I applaud the bravery of these statements. On the other…what? “Customer service” is probably the first thing people associate with restaurants after “food,” and Quiznos is practically a cautionary tale serial restaurateurs tell their children to keep them behaving angelically. I’m not sure what people are really supposed to think upon hearing that, other than “…Hm.” Roasting aside, Ghost Kitchen Brands is growing; mostly via the Walmarts it has so far called home.

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That’s been spooky kitchens.

Boo ✌️,

Mitch

P.S. If you’re just jumping into ghost kitchens and want to learn more, check out my ghostly glossary and spooky kitchens ghost kitchen cheat sheet. They’re there (and frequently updated) to help make sense of this weird and wild west.