C4
EAT, DRINK & EXPLORE
East Oregonian
Saturday, November 2, 2019
Online ordering boom gives rise to virtual restaurants
By ALEXANDRA OLSON
Associated Press
NEW YORK — Frato’s
Pizza looks like a typical
family restaurant, with its
black-and-white checkered
floor and red chairs. But in
the kitchen, the cooks are
whipping up dishes for four
other restaurants at the same
time.
There is, of course, the
gourmet pizza that patrons
have come to expect from
Frato’s when they walk
through the door. But there
are also spicy chicken gyros
for Halal Kitchen, barbe-
cue chicken tenders for Ten-
derlicious, salmon grilled
cheese for Cheesy Deli-
ciousness, and Butterfin-
ger milkshakes for Heav-
enly Shakes — all of which
can only be ordered through
online sites Grubhub, Door-
Dash and Uber Eats.
Owner Michael Kudrna
launched the four spinoffs
earlier this year in a matter
of weeks as he races to keep
his Chicago-area business
ahead of a growing trend:
restaurants conceived only
for delivery or take-out.
Thousands of restaurants
are experimenting with
these virtual spinoffs tucked
inside their own kitchens.
Others are opening “ghost
kitchens,” where all food is
prepared to-go.
Both concepts have
emerged to capitalize on the
rising popularity of order-
ing in instead of dining out.
The trend also speaks to
the growing power of third-
party delivery companies,
which have transformed
the way many people find
restaurants and raised
expectations for speed and
convenience.
The $26.8 billion online
ordering market is the fast-
est-growing
source
of
restaurant sales in the United
States, according to David
Portalatin, a food industry
adviser for the NPD group.
Digital orders, while still
accounting for just 5% of all
restaurant orders, are grow-
ing some 20% each year.
Restaurant visits, mean-
while, remain mostly flat.
Kudrna says the virtual
restaurants are a way to gain
enough incremental revenue
to offset the fees he pays to
the third-party apps, which
now drive one-third of his
sales. Restaurants pay com-
mission fees as high as 30%
per order.
“The beauty is I can cre-
ate concepts and if they
don’t work, I can move on
to try another one,” Kudrna
said. “I will have lost weeks
of work, but not large sums
of money.”
Chick-Fil-A, The Halal
Guys and Dog Haus are
among top brands that
have opened ghost kitchens
through Kitchen United, a
AP Photo/Teresa Crawford
William Burns, left, general manager of the B.Good ghost kitchen inside Kitchen United’s Chicago, Ill., location, prepares
food for delivery. Kitchen United, a start-up that builds kitchen commissaries for restaurants looking to enter new markets
through delivery or take-out only, has plans to open 40 more kitchens in cities across the U.S. through 2020.
AP Photo/Teresa Crawford
AP Photo/Teresa Crawford
Chef Joseph Gattuso prepares a gyro sandwich in Schaumburg, Ill. He’s An order from the menu of Halal Kitchen is
working in the kitchen of Frato’s Pizza, but filling an online order for the ready for pickup in a kitchen inside Frato’s Piz-
virtual restaurant Halal Kitchen.
za in Schaumburg, Ill.
start-up that builds kitchen
commissaries for restau-
rants looking to enter new
markets through delivery or
take-out only.
Kitchen United, backed
by $50 million in funding
from Google Ventures and
other investors, has two
locations in Pasadena, Cal-
ifornia, and Chicago. It has
ambitious expansion plans
to open 40 more kitchens
in cities across the U.S.
through 2020, said CEO Jim
Collins.
DoorDash staked a claim
to the trend last week. The
delivery company partnered
with four restaurant chains
— including The Halal
Guys — to open a bright
red shared kitchen in Red-
wood City, California, offer-
ing delivery or pick-up in 13
suburban Bay Area markets.
The idea is for DoorDash
Kitchens to be a one-stop
shop for restaurants looking
to grow their business, said
Fuad Hannon, head of new
business verticals at Door-
Dash, although there are no
immediate plans to expand.
“We are really at the
early innings of this indus-
try,” Hannon said. “It’s
highly speculative at this
point to understand where
this will all go, but what we
know is that people love to
get their favorite restaurants
delivered.”
There have already
been some notable failures.
Maple, the delivery-only
restaurant backed by celeb-
rity chef David Chang,
closed in New York in 2017
after two years. Pilotworks,
a venture capital-backed
start-up that offered com-
mercial kitchen space and
distribution services for
small food businesses,
abruptly closed its Brooklyn
commissary in 2018, leav-
ing nearly 200 vendors in
the lurch with no warning.
“I had to call all of these
businesses and tell them I
didn’t have a kitchen. It was
awful,” said Liz Santiso,
owner of Brooklyn Biscuit
Company, who is starting
over after losing her whole-
sale business that had deliv-
ered to Whole Foods and
Dean & Deluca.
Both Kitchen United and
DoorDash are staking their
shared-kitchen models on
helping successful restau-
rants grow, rather than
serving as incubators for
start-ups.
Grubhub and Uber Eats
say their virtual restaurant
programs help small busi-
nesses compete in this land-
scape. Both actively reach
out to restaurants with sug-
gestions for online spinoffs
based on data gleaned
from customer searches —
extending their influence
from how people get their
food to what should go on
the menu.
Uber Eats has helped
launch 4,000 such vir-
tual restaurants worldwide,
about half of them in the
U.S. and Canada, accord-
ing to Kristen Adamowski,
head of Uber’s virtual
restaurants program.
One restaurant owner,
Rick Scott, said Uber saved
his Brooklyn business. Scott
first opened a cafe serv-
ing coffee, pastries and ice
cream in Crown Heights,
a lower-income neighbor-
hood. But it was the only
sit-in restaurant for blocks
around and “the neighbor-
hood just wasn’t ready for
it,” Scott said.
Sales were slumping
when he reached out Uber,
which told him there was
latent demand for specialty
burgers in the surrounding
area. Scott launched Ger-
izim Burger Factory on
Uber Eats with a Caribbe-
an-inspired menu of jerk
and calypso burgers.
Almost immediately, he
said, sales jumped about
75%. A year later, he has
two employees, rebranded
his physical restaurant and
launched a second Burger
Factory in the borough of
Queens.
“It was a 90-degree
turnaround,” Scott said.
“It changed our whole
business.”
But Kudrna has found he
can’t always rely on third-
party suggestions. Heavenly
Sweets, a desert concept
suggested by Grubhub, has
mostly flopped. The chefs at
a training program he runs
then came up with Cheesy
Deliciousness and Halal
Kitchen, which have so far
taken off.
Grubhub spokeswoman
Katie Norris said sales rep-
resentatives suggest virtual
spinoff ideas when they see
untapped demand for a cui-
sine in a market, but it’s up
to the restaurant to decide
whether it makes sense for
them.
Virtual restaurants have
the obvious benefit of testing
new concepts without tak-
ing on expensive leases or
hiring more staff, said Rick
Carmac, dean of restaurant
management at the Institute
of Culinary Education in
New York.
But he said small restau-
rants should weigh risks
before embarking on an
online spinoff at the behest
of third-party platforms,
which offer no training for
kitchen staff to adjust to new
menus. Restaurants should
consider whether their
delivery packaging is right
for new dishes, or whether
they want to increase their
reliance on outside delivery
drivers.
“None of those things are
minute, and none of those
things easy, which is kind
of what you might be led
to believe,” said Carmac,
who has consulted for Uber
Eats and said he expressed
his reservations about the
company’s approach. “They
give you the data, and then
they leave.”
Guitar-shaped hotel opens at Florida Seminole casino
It looks like
the guitar Led
Zeppelin’s Jimmy
Page played, but
it’s a 450-foot hotel
By CURT ANDERSON
Associated Press
HOLLYWOOD,
Fla.
— It looks like a rock ‘n’
roll guitar that Led Zep-
pelin’s Jimmy Page would
have played. But this one is
450 feet tall and is a light-
beam hotel that the Semi-
nole Tribe wants to become
South Florida’s latest tourist
destination.
The Guitar Hotel had its
grand opening Oct. 24 on the
tribe’s land in Hollywood,
once only a trailer park and
some smoke shops. It’s the
latest step in the Seminole
Hard Rock empire, which
includes naming rights on
the Miami-area stadium
where the 2020 Super Bowl
will be played.
“It really is special,”
said Mitchell Cypress,
vice chairman of the Sem-
inole tribal council. “The
Seminoles now are known
throughout the world.”
It’s a unique addition to
AP Photo/Brynn Anderson
The guitar shaped hotel is seen at the Seminole Hard Rock Hotel and Casino in Hollywood, Fla. The Guitar Hotel’s grand open-
ing is on the tribe’s land in Hollywood. It’s the latest step in the Seminole Hard Rock empire, which includes naming rights on
the Miami-area stadium where the 2020 Super Bowl will be played.
South Florida’s tourist land-
scape and no hotel is like
it in the world. It has more
than 600 rooms and at night,
beams of light will mimic
the strings of the guitar.
Locally, people stop
along the roadsides to take
photos. It’s visible to travel-
ers on airliners headed into
Fort Lauderdale.
The $1.5 billion proj-
ect also has a refurbished
venue for concerts and
other events, starting with
Maroon 5 and continuing
with artists, such as Sting
and Billy Joel. It has a giant
pool and lagoon, retail
shops, restaurants, and of
course gambling.
Jim Allen, CEO of Hard
Rock International, said the
brand already is filled with
guitars, so why not a hotel?
“Wouldn’t it be really
cool if we could design a
hotel shaped like a guitar?”
Allen remembers saying.
“Before, we were more of
a locals facility. Now, we
have the ability to market
this internationally.”
As for the guitar shape,
Allen said it’s meant to be
generic and not necessarily
the Gibson Les Paul made
famous by Page and oth-
ers. But he added that Hard
Rock has relationships with
both Gibson and Page, and
the hotel and casino fea-
tures many Led Zeppelin
artifacts.
“When we present the
Hard Rock brand on a
global basis, it literally
starts with Jimmy Page
saying ‘It was a cool idea
then and it’s a cool idea
now,’” Allen said.