The coronavirus has left many restaurants struggling as the pandemic forced them to temporarily close their doors and still has many operating at a lower capacity than normal.
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Owners are looking for ways to bring in more revenue. Fast-casual Asian chain Wow Bao has one idea: open their restaurant inside an existing restaurant as a delivery-only “dark kitchen” eatery.
Wow Bao, which serves up steamed bao, potstickers, dumplings, rice and noodle bowls, announced on Wednesday that it has added 100 locations in just six months by partnering with other restaurants. Its food is offered via third-party delivery services like UberEats, Grubhub, DoorDash, Postmates and Caviar.
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Geoff Alexander, president and CEO of Wow Bao, said the company came up with the partnership plan last November.
“Although we didn’t envision this initiative as a response to the COVID-19 crisis, we are proud to say our dark kitchen platform is assisting operators to help pay rent and employ staff in order to survive this difficult time,” Alexander said in a press release.
Wow Bao isn’t the only “virtual restaurant” to take advantage of the proliferation of meal delivery services during the pandemic. Chuck E. Cheese has been selling pizza under the name Pasqually’s Pizza & Wings on Grubhub. An increasing number of eateries operate “ghost kitchens,” renting out kitchen space to other restaurants or adding other restaurant brands to its offerings for takeout and delivery only. And there are also “cloud kitchens,” which work exclusively with delivery brands.
These kinds of deals aren’t just good for restaurants seeing a slump in business. The brands they work with can use them to test out their products in new markets. The California-based Lemonade Restaurants recently opened its first ghost kitchen in Long Beach, allowing it to expand to the city “in record time and with a very low investment,” co-CEO Anthony Pigliacampo told QSR Magazine.
“In just three months, we moved from site identification to delivering food to guests,” Pigliacampo told QSR. “This would have been impossible with a brick and mortar site.”
Wow Bao said its partnership is different from ghost kitchens because it ships frozen items to its partner restaurants to be prepared by their kitchen staff.
Edmund Woo, the owner of the Saskatoon Lodge in Greenville, S.C., and a Wow Bao partner, said in a written statement that the process of integrating Wow Bao into his kitchen was “seamless.”
“I have trained existing employees to handle the production at virtually no incremental cost,” he said. “The ability to not only continue operating during such a vulnerable time, but to help increase margins, is instrumental to help maintain business.”
Wow Bao said its dark kitchens are now in more than 55 cities in 22 states and it plans to add 100 more locations by the end of the year.