Dive Brief:

• Dickey’s has announced a partnership with Toronto-based Ghost Kitchen Brands to expand pickup and delivery locations across North America.
• The barbecue chain plans to open two additional U.S. locations this month and over 100 locations in the U.S. — including Texas, California, Illinois and Georgia — and Canada over the coming months and in 2022, according to the company
• In June, Dickey’s announced a similar partnership with Combo Kitchen to expand its brand through ghost kitchens nationwide. As part of that plan, Combo Kitchens expects to open Dickey’s in at least 100 locations within the next year.

Dive Insight:

The Ghost Kitchen Brands partnership expands on Dickey’s digital heavy, off-premise focus, which began when the company added virtual kitchens as an option for franchisees and signed agreements to bring such models to six major markets, including Chicago and Las Vegas, in August 2020.

This year, the barbecue chain launched two virtual brands, Big Deal Burger and Wing Boss. Operators have access to the two virtual brands through the Combo Kitchen partnership.

These partnerships allowed the brand to enter new markets at a lower build cost, while growing its off-premise business. By September last year, digital sales had replaced dine-in traffic nearly one-to-one, according to Nation’s Restaurant News. This shift during the pandemic coincided with increased check counts.

Ghost Kitchen Brands has forged partnerships with several restaurant brands already, including Saladworks, Quiznos’ owner Rego Restaurant Group, Wow Bao and Nathan’s Famous, and has experience executing their ghost kitchen strategies. Ghost Kitchen Brands also teamed up with Walmart in May to bring its concept to dozens of retail stores in the U.S. and Canada.

Dickey’s will join Cinnabon, Quiznos, Nathan’s Famous and Shaquille O’Neal’s Big Chicken at Ghost Kitchen Brands’ first U.S. location in a Walmart store, which opened in September in Rochester, New York. It’s likely Dickey’s will show up in more Walmarts thanks to this partnership, and that presence at one of the world’s largest retailers could help Dickey’s grow brand awareness and broaden its customer base.

There are risks to emphasizing ghost and virtual kitchens. Marketing can be a challenge when there is no storefront, and relinquishing control to third-party partners can be risky. At least one ghost kitchen operator, Reef Kitchens, has had to close units due to permitting and safety issues exacerbated by rapid expansion.

Dickey's is fulfilling customer demand for delivery and pickup by pressing the gas on this model. In a statement, CEO Laura Rea Dickey said the Ghost Kitchen Brands partnership “provides another opportunity for us to stay ahead of the curve.”