Dive Brief:
- Red Robin confirmed it will stop offering virtual brands, including MrBeast Burger, in a statement emailed to Restaurant Dive Thursday.
- MrBeast Burger, a concept developed by Virtual Dining Concepts and YouTube personality Jimmy Donaldson, who styles himself as MrBeast, was offered alongside Red Robin’s proprietary virtual brands. Chicken Sammy’s, The Wing Dept. and Fresh Set are also being axed.
- The 511-unit burger chain was one of the key partners of MrBeast Burger, but Red Robin said it is focusing on producing its core menu as part of its “North Star” turnaround plan revealed in January. The plan is designed to reverse years of sliding unit counts, sales and customer satisfaction.
Dive Insight:
The end of virtual brands at Red Robin parallels Brinker’s decision to shutter Maggiano’s Italian Classics in May. MrBeast Burger is one of the keystone brands for VDC, and the loss of a major chain partner could prove difficult for the virtual brand company.
In a statement emailed to Restaurant Dive, Red Robin said “exiting our work with virtual brands follows through on our commitment to remove complexity in the restaurant and allows our Team Members to focus on elevating the overall Red Robin Guest experience.”
Restaurant Business reported that MrBeast Burger is currently served through 2,000 restaurants. Red Robin did not respond to a request to clarify how many of its stores had offered MrBeast Burger or when they would stop offering it.
Easing pressure on its workers, including by reducing the number of tables assigned to individual waitstaff, is key to Red Robin’s turnaround program. CEO G.J. Hart said in January that the turnaround was necessitated by a variety of factors, including years of staffing cuts and changes that began with the elimination of bussers in 2018. By ending its virtual brands, Red Robin could reduce its supply chain costs, too.
Donaldson sought to distance himself from the burger brand bearing the name of his screen persona in a series of June Tweets, some of which were later deleted, according to Dexerto, an entertainment media group. At the time, Dexerto reported, VDC would not let Donaldson shut down his brand.
Casual dining chains have sought to improve their core competencies as customers return to in-person dining. While Red Robin’s turnaround plan is the most ambitious such effort, Chili’s is focusing on its core menu categories: Chicken Crispers, margaritas, burgers and fajitas. TGI Fridays is pursuing an extensive menu modernization project impacting six proteins.
Virtual brands, especially those with menu item overlaps with host restaurants, have had a rough start to 2023. Despite signing partnerships with brands like IHOP and Nathan’s Famous, Nextbite laid off large portions of staff prior to a sale to Sam Nazarian, who owns competing virtual brand platform C3.
According to Restaurant Business, Red Robin will not halt its partnership with Donatos Pizza, which is available through 273 Red Robins, per recent Donatos press releases.
