As a restaurant operator in today's evolving landscape, it's critical to stay ahead of the latest industry trends. By understanding consumer preferences and embracing technology, restaurants can capitalize on new ways to drive sales and maximize operational efficiency. As off-premise dining continues to grow in popularity, one restaurant trend to keep an eye on is virtual restaurants, also known as virtual kitchens, ghost restaurants, cloud restaurants, or dark restaurants.
From hosting a well-known brand in your kitchen to starting your own virtual brand from scratch, restaurants of all types and sizes can launch virtual kitchens to generate incremental income and expand their delivery area while using their existing operations.
In this blog post, we'll explore delivery-only restaurant models and how Scaffidi Restaurant Group, a family-owned Italian restaurant in Steubenville, Ohio, launched the first virtual kitchen in the Ohio Valley region.
What is a virtual kitchen?
A virtual kitchen is a delivery-only concept that allows restaurants to launch an additional restaurant using their existing kitchen and staff. Virtual restaurants help boost sales and reach new customers without increasing operational costs.
After COVID-19 forced restaurants to shut down dine-in operations, Scaffidi Restaurant Group partnered with DoorDash to quickly expand delivery operations and create a business model that thrived in any economic environment. In just a few months, their monthly delivery orders increased by 1,850%. Pleased with this initial off-premise success, Frankie DiCarlantonio, Director, Scaffidi Restaurant Group came up with the idea for a delivery-only chicken wing restaurant.
As Frankie explained in Steubenville's local newspaper, "A lot of our business was focused around catering and around people gathering at the bar," he said. "But that wasn't happening, and we wanted some unique ways to build our brand. We did our homework, we researched trends and found what others in the same situation as us were doing. We found that in a lot of cities and large metropolitan areas where technology was more prevalent, the virtual kitchen concept was working quite well."
In just six weeks, Frankie set up operations, trained his staff, and stocked inventory to launch Scaffidi's Wings on Wheels — the first virtual kitchen in the Ohio Valley region. The virtual brand offers delivery and pickup through DoorDash Marketplace and Online Ordering, as well as other third-party platforms.
Benefits of virtual restaurants
A virtual brand offers restaurant operators new opportunities to expand their business. It not only drives additional sales, but enables restaurants to provide consistent shifts to their employees. With the additional orders from Scaffidi's Wings on Wheels, Frankie was able to hire several new full-time employees and add shifts for existing staff. "More than just providing another outlet for sales, DoorDash is actually sparking employment," he explained.
Virtual kitchens also help restaurants future-proof their business, giving them diverse revenue streams and a flexible business model that can weather any storm.
"We didn't want to rely so much on in-house dining anymore. We wanted a brand that was untouchable — that has what it takes to get through a disaster like COVID-19."
While Scaffidi Restaurant Group opened two new concepts, restaurants don’t have to create a new brand to reap the benefits of a virtual kitchen. You can license an existing brand to host a delivery-only, virtual kitchen. Restaurants can earn additional revenue (at low or no cost) by offering items to customers using a separate, virtual-only menu on DoorDash. We help restaurants determine which established brand to license, then share approved recipes, train kitchen staff on preparation, provide supplier lists to get the right ingredients, and even recommend takeout containers for each dish.
Francis Cui, owner of Bak Kung in Pleasanton, California, partnered with DoorDash to host a virtual kitchen and increase sales. Bak Kung paired with Aria Korean Street Food to create a delivery-only restaurant selling Aria’s dishes since both restaurants use similar ingredients and techniques. Since partnering with Aria and selling their dishes on DoorDash, Francis has been able to generate approximately $12,000 in additional monthly revenue.
Brand Licensing makes perfect sense to me. We have the capacity and the ingredients — I just make it and sell it on the DoorDash platform. It's like DoorDash is giving me free money.
The importance of educating customers
As the first virtual kitchen in the area, Frankie discovered that he needed to first educate his community about the virtual restaurant concept. In fact, when Scaffidi's Wings on Wheels first opened, customers wondered whether it was a virtual reality experience. "People asked, ‘Do you actually eat the food?'" laughed Frankie. "No one knew what we were doing."
To help clear up these misconceptions and drive awareness for his new business, Frankie was able to secure a news story with a local television station. His team also communicated updates on their website and Facebook channels to explain how the restaurant works, share what customers can expect when they place orders, and answer other common questions. Finally, while the original name was simply "Wings on Wheels," Frankie realized he needed to build trust and familiarity — so incorporated his beloved family restaurant's name and re-launched the brand as Scaffidi's Wings on Wheels.
After implementing these strategies, the orders started flowing in. "It's going well," noted Frankie. "The virtual brand has provided a very nice stream of income to us."
Advice for small-market restaurant brands
When asked to share tips for other small market restaurants considering DoorDash, Frankie encouraged them to dive into the third-party delivery trend. "I would say to do it. I was wholeheartedly surprised at the volume that came in the beginning," noted Frankie. "Even if you're in a smaller area, there are no monthly fees, no upfront costs to absorb except the percentage fee per order. You've got nothing to lose."
And when it comes to virtual kitchens, Frankie pointed out that COVID-19 accelerated consumers' expectations for seamless, online experiences from restaurants. "People are getting used to using technology in their everyday life — it's not going anywhere anytime soon," he said. "Why not be a trailblazer and open the first virtual kitchen in your area?"
Embracing off-premise for the long-term
Looking ahead, Frankie will continue to focus on developing virtual brands and other off-premise business opportunities. His came up with the concept for Scaffidi's Gnocchi Nook — a carryout-only, make-your-own pasta bowl restaurant — and opened its first location in 2021.
As restaurants return to higher capacities, Frankie believes delivery will remain a key part of the food service industry. "Even as COVID-19 is declining, we're still seeing people placing DoorDash orders," said Frankie.
"Third-party delivery is here to stay. The comfort and convenience of eating at home isn't going anywhere."
Frankie sees the restaurant industry's embrace of technology during the pandemic as a good thing overall — a shift that will help restaurants of all types and geographies strengthen their business models for the long-term. "Technology is coming to your area — whether because of COVID-19, or because of younger generations joining your community," he said. "Embrace the technology because it's here to stay and will become more and more mainstream very soon."
Partner with DoorDash today
US restaurants can add an incremental revenue stream by selling a well-known brand’s menu out of your kitchen with Brand Licensing. Already on DoorDash? You can get started with Brand Licensing here in the Merchant Portal. Not a DoorDash partner yet or looking to open your own virtual restaurant brand? List your business on DoorDash today.
