Dive Brief:

• Wienerschnitzel is testing its brand reception in new markets with three ghost kitchens in Frisco, Texas, Santa Barbara, California and Smyrna, Georgia, the company wrote in a press release emailed to Restaurant Dive.
• The hot dog brand said there is potential to open over 1,000 U.S. ghost kitchens, and expanding to new markets will be a key part of its growth strategy.
• The Smyrna location will gauge the brand’s potential in markets far from its home base. That ghost kitchen will be 500 miles from the nearest Wienerschnitzel, according to the press release.

Dive Insight:

Wienerschnitzel said the units began operating on May 2, and that they will “act as a trial run to understand demand in key market segments nationwide, while simultaneously bringing the brand’s products closer to new audiences.” Its products will be available through major third-party delivery aggregators. 

Prior to this announcement, the hot dog chain’s expansion strategy focused primarily on recruiting new franchisees with hefty discounts in markets near to Wienerschnitzel’s extant stores. The company said the ghost kitchen format could offer another avenue for expansion. The Texas and California ghost kitchens are both adjacent to existing Wienerschnitzel markets. Based on the results of the test, Wienerschnitzel could expand further into those markets.

“For years, people in these markets have begged us to open Wienerschnitzel locations in their cities,” Doug Koegeboehn chief marketing officer at Wienerschnitzel’s parent company, the Galardi Group, said. “With this ghost kitchen initiative, we’re thrilled to be able to deliver directly to them. If sales at these test kitchens are even a fraction of our average delivery sales, it will be a huge success.”

The company did not immediately respond to a request for comment regarding the physical size or staffing levels needed for the ghost kitchens.

Wienerschnitzel’s announcement comes as other brands have retreated from the ghost kitchen model. Most notably, Wendy’s cut most of its unit pipeline with Reef Technology and refocused on a new prototype for its traditional units. Just this week, Brinker announced it would cut its Maggiano’s Italian Classic virtual brand over lackluster sales. Low sales volume, operational issues and regulatory violations have plagued the ghost kitchen segment. But Wienerschnitzel’s simple menu, relatively well-known national brand, and fresh presence in these markets may counteract such trends.