UPDATE: June 6, 2022: Reef Technology confirmed Michael Beacham was leaving his role as president of kitchens, and that he will be replaced by Kenneth Rourke.

Dive Brief:

• Reef Technology has pushed out Michael Beacham, the company's former president of kitchens, Insider reported Thursday. Beacham was instrumental in developing major brand deals for Reef, including partnerships with Wendy's, Denny's and TGI Fridays, according to the publication. Reef and Beacham did not provide comment ahead of press time.
• Kenneth Rourke, previously Reef's executive vice president and head of enterprise brands, has replaced Beacham. Before his time at the ghost kitchen company, Rourke served as president at Barton G, an experiential restaurant group. 
• This executive change comes as Reef grapples with unit closures, job cuts and regulatory challenges in major markets.

Dive Insight:

The high-profile restaurant partnerships Beacham facilitated helped put Reef on the map as a ghost kitchen platform that could give brands access to underpenetrated urban markets with dense populations and strong sales potential.

Many Reef deals have also hinged on opening hundreds of units in short spans of time. Wendy's CEO Todd Penegor, for example, said the ghost kitchen operator would open 150 to 200 units with Wendy's in 2022 alone.

But Reef's unit growth stalled out in late 2021 as major cities began looking at permitting and health and safety issues at the company. Just after signing its deal with Denny's, Reef closed 95 units in what it said was a temporary pause necessary to convert units so they could sell food from partner restaurants. In an interview with Restaurant Dive last October, Beacham said the company was trying to be proactive about permitting and regulatory issues by working directly with cities. 

The company pursued a close relationship with the city of Miami, where Reef is headquartered, amid regulatory problems in markets including New York and Chicago. In Miami, Reef helped city commissioner Ken Russell develop a pilot program that removed regulatory barriers to Reef's operations. Reef employees donated a cumulative $1,000 to Russell's senate campaign, public records show. Reef has backed similar initiatives in Dallas and Orlando, Florida, as well.

Reef has continued to land deals amid regulatory scrutiny. The company announced in April it's seeking an ownership stake in partner pizza concept 800 Degrees Go, and acquired iKcon, a ghost kitchen operator in the United Arab Emirates, in November. The company has also raised large sums from SoftBank and Mubadala, a sovereign wealth fund directed by the Deputy Supreme Commander of the UAE's armed forces.

The company's problems haven't abated, however. Last month, Reef announced it was laying off about 5% of its global workforce to refocus on profitable sectors, including ghost kitchens.