Wendy’s Plunges Into the Ghost Kitchen Frontier

People used to shamefully tweet about having a rare meal from Taco Bell or McDonald’s delivered to their apartment. But there’s no shame now — delivery is becoming central to the strategy of fast-food chains.

On Wednesday, Wendy’s announced it is opening 700 ghost kitchens — one of the biggest investments yet into the world of delivery-optimized commercial kitchens, which abandon the classic dining room model to serve up meals directly into foil tins and Uber Eats bags.

New Haunts

Ghost kitchens are typically operated on affordable real estate in densely-populated areas (think vacant mall food courts and hotel kitchens). They are designed to help restaurants boost delivery capacity, reach more customers, and affordably test out new markets. While the concept has been around for years, the pandemic pushed its popularity to new heights.

Ghost kitchens are now the cornerstone of Wendy’s aggressive development strategy, which includes opening 2,200 new restaurants across the U.S., UK, and Canada over the next four years:

• Parking lot operator turned ghost kitchen logistics firm Reef Technology (backed by Softbank) will assist Wendy’s in launching new takeout stations, 50 of which will go live this year.
• CEO Todd Penegor said on an earnings call that ghost kitchens will help Wendy’s bulk up in urban areas where the chain is “dramatically underpenetrated.”

Ghosting The Eatery: A National Restaurant Association survey from April found that 60% of U.S. adults are more likely to get delivery now than they were pre-pandemic.

McDonald’s, KFC, Chipotle, and Outback Steakhouse have each launched at least one ghost kitchen. Kroger’s has a new partnership with a ghost kitchen company that will fulfill delivery and pickup orders from its supermarkets. And DoorDash is even vertically integrating, opening kitchen facilities that prepare food for multiple restaurants.

Taking the “ghost” concept to the next level, around 100,000 ”virtual restaurants,” which exist solely as search-optimized profiles on DoorDash and Grubhub, are now taking orders in the U.S.