Dive Brief:

• Wetzel's Pretzels and Halal Guys have established operations at Kitchen United's Pasadena, California, kitchen center, according to a press release.
• The pretzel chain will be the first national chain to work with the virtual kitchen operator when it begins operations on April 1.
• Wetzel's Pretzels will begin testing each third-party operator and figure out which items work best for delivery, CEO Jennifer Schuler told Nation's Restaurant News.

Dive Insight:

Now that Kitchen United is partnering with a national brand, others may follow, especially if the off-premise venture proves profitable. The jump makes sense for Wetzel's Pretzels since its locations are largely tied to malls, which has made delivery a challenge, Schuler told Nation's Restaurant News.

In February, the pretzel chain hinted during an earnings call that it was looking into delivery as part of its goal of "Bringing Pretzels to the People," which included growing into nontraditional sites such as street locations, college campuses and food trucks. Its collaboration with Kitchen United could be a strategic move to stave off its closest competitor, Auntie Anne's, which has already made big moves into off-premise through its growing food trucks program. Auntie Anne's now runs two dozen food trucks in nine cities.

Other large brands have been branching out into virtual kitchens. Halal Guys is already operating at Kitchen United and offers pickup, delivery and catering. Famous Dave's plans to test a ghost kitchen concept with a menu of fried chicken and burgers as well as a virtual kitchen that will have a smaller footprint and run off-premise and catering operations. Red Robin, Outback Steakhouse and Carrabba’s also have been rolling out delivery-only concepts.

Virtual and ghost kitchen concepts can provide a testing ground for restaurants to try new concepts or expand into delivery without having to invest in opening a location in a high rent area. For Wetzel's Pretzel and Halal Guys, partnering with Kitchen United also gives the companies access to tech infrastructure and platforms, as well as connections to third-party delivery providers that make it easier to set up off-premise operations. In addition, Kitchen United offers back of house services such as cleaning and maintenance. 

Kitchen United, which is planning to open 15 new kitchens by the end of the year, will launch its own virtual restaurant, an Italian concept called Fresgo, which will offer paninis, salads, pastas and more. The company plans to share data and learnings from the concept to help its restaurant partners maximize their experiences, according to the release. Other brands operating in the space include Canter's Deli, AmazeBowls, chEAT Day, Grilled Cheese Haven, Mama Musubi and The Pizza Plant.