Dive Brief:

• Wow Bao's partner kitchen program is expected to reach 1,000 locations by the end of the year compared to 150 locations available now and six at the start of 2020, according to a press release. Wow Bao partners with restaurant operators to facilitate a delivery-only kitchen, allowing these operators to sell Wow Bao's menu of buns, bowls and potstickers through third-party aggregators. 
• Through a separate partnership with Franklin Junction, a digital marketplace that connects kitchen operators with customers, will add 50 locations in the Northeast and Mid-Atlantic this month, as well as a nationwide expansion into 50-plus more locations in the first half of the year. 
• Wow Bao started this program in November 2019 and interest has grown during the pandemic, with some operators surpassing the roughly $2,000 in minimum weekly sales operations were expected to generate and reaching $5,000 in weekly sales.

Dive Insight:

Wow Bao's dark kitchen strategy has helped the company expand its branding beyond its six locations in Chicago and six airport locations and into areas that weren't on its radar initially. The company now has a presence in 24 states and Washington, D.C. It expects to be in 160 cities and 36 states by mid-year, according to the press release. The restaurant brand has had particular success with this program in rural areas, where 40% of its new partnerships are located. These areas are more limited in food variety than urban areas. 

Wow Bao's strategy is also providing an additional revenue stream for operators, many of whom have struggled to grow sales during the pandemic. CEO Geoff Alexander previously told Restaurant Dive that one operator in Minneapolis made $10,000 in a week during October. The initial investment is under $1,000, which he said can be earned back within 10 to 14 days. 

Wow Bao's kitchen program has become one of the fastest growing host operations in the country. Other major brands, like Brinker International and Applebee's, have also been using existing restaurants within their own systems to create virtual-only brands. Famous Dave's is using both its existing restaurants as well as partnering with outside operators to sell its food online. 

There is also plenty of room to grow ghost kitchens, with less than 5% of operators saying they added delivery from a virtual or ghost kitchen since the start of the pandemic, according to the National Restaurant Association's 2021 State of the Industry report. The association also found that 72% of adults prefer for their delivery orders to come from a location they can visit in-person. Having existing restaurants that a consumer could visit could help some initial hesitancy that consumers may have from ordering virtual-only brands.