Dive Brief:
- Inspire Brands, parent company of Arby's, Sonic, Jimmy John's, Buffalo Wild Wings and Rusty Taco, announced the opening of its first ghost kitchen on Tuesday. Inspire claims Atlanta-based Alliance Kitchen is the first ghost kitchen launched, owned and operated by a multi-brand restaurant company.
- Alliance Kitchen offers menu items from each of Inspire's five restaurant brands to guests who order via each brand's online ordering platform or via third-party delivery partners. Both delivery and takeout are available.
- This opening comes as more restaurants explore ghost and virtual kitchen models to support their growing off-premise businesses. Wendy's recently signed a deal with Reef Kitchens, for example, while Chipotle has a digital-only location in New York and Chick-fil-A has partnerships with both Kitchen United and DoorDash Kitchens.
Dive Insight:
More legacy brands are investing in ghost kitchen opportunities as delivery and takeout orders hold steady despite the return of dine-in traffic. Inspire Brands' digital revenue has more than doubled since 2019 to more than $6 billion, Stephanie Sentell, SVP of restaurant operations and innovation at Inspire, told CNBC.
Operating such a model versus outsourcing it to a ghost kitchen provider could glean cost-savings and ensure that food is prepared in a way that's consistent with the brands' standards. Still, fulfilling off-premise orders from five brands could squeeze employees since Inspire won't be tapping into a third-party labor source.
Inspire Brands touts the model's labor benefits. In a blog post, the company writes, "This unique layout enables a workforce cross-trained across multiple brands and skills, resulting in labor efficiency and expanded opportunities for team members to develop their careers in the restaurant industry."
Inspire also claims its Alliance Kitchen reduces labor needs by 54% compared to five standalone restaurants. Labor costs aren't the only savings yielded from the ghost kitchen, however.
The company also claims Alliance Kitchen reduces square footage needs by 19%, decreases equipment costs by 45% and reduces energy consumption by more than 50%. These savings and efficiencies could motivate franchisees to further grow their footprints through such a model and, by extension, grow the Inspire system beyond its current 32,000 restaurants. It could also entice operators to expand into new markets. Alliance Kitchen is facilitating Rusty Taco's debut in the Atlanta area, for example.
Inspire isn't the first multi-brand restaurant company to dip its toes into the ghost kitchen business. Outback Steakhouse parent Bloomin' Brands has been experimenting with standalone kitchens for takeout and delivery, for example, while Fat Brands opened a delivery-only ghost kitchen last year in San Francisco, which will eventually offer menu items from four of its brands.
Inspire Brands trademarked Inspire Kitchen alongside Alliance Kitchen in February, so it's possible the company will continue to explore ghost kitchen opportunities. In a statement, Sentell said, "We look forward to continuing to test and learn with Alliance Kitchen as we find new ways to provide our guests with convenient, digital-led dining experiences."
