- C3 (Creating Culinary Communities) has received a $10 million investment from TriArtisan Capital Advisors, parent company of TGI Fridays, PF Chang's and Hooters, according to a press release. The investment is part of an $80 million funding round secured by C3 earlier this month.
- TriArtisan's investment will focus on utilizing kitchen capacities within its existing restaurants to develop C3's virtual brands. C3 has created 40 brands, including Umami Burger, Krispy Rice and Katsuya with Chef Katsuya Uechi.
- Adding these partner restaurants further supports C3's ambitious expansion goal, with plans to reach 12,000 locations by 2023. Earlier this year, the company partnered with Chowly, which will allow 10,000 Chowly clients to access C3's concepts. Currently, C3 operates more than 250 digital kitchens.
TriArtisan's investment suggests that the company expects C3's digital infrastructure and virtual brands to help its legacy restaurants recover from a devastating year.
Sales at TGI Fridays were down 80% in Q2 2020, for example. While it will close between 10% and 12% of its global restaurants, the number of closures is lower than expected thanks to the chain's investment in delivery and curbside pickup, Business Insider reports. P.F. Chang's has also diversified its business model to ramp up takeout and delivery, which has helped its recovery.
The addition of virtual brands in existing kitchens could add a major revenue stream for TriArtisan's restaurants as demand for off-premise occasions holds steady. C3's digital brands each generate an estimated $1 million per outlet, according to the press release.
This added revenue is a major impetus behind the growth of virtual brands in general. The proliferation of the segment is also driven by restaurant brands that want to more efficiently use their kitchen spaces during down times. Younger consumers, who tend to place more delivery orders compared to older generations, are also fueling this trend. Nearly 60% of restaurant orders from millennials are for takeout or delivery, according to a Technomic report. Denny's CEO John Miller said during a February webinar that younger generations are more receptive of virtual brands like his company's "Burger Den," for example. Applebee's Cosmic Wings brand is also geared toward younger consumers.
Rohit Manocha, co-founder and managing director of TriArtisan Capital Advisors, said in a statement that C3's brands resonate with younger generations, who have increased buying power. Attracting this demographic specifically could provide "a road map for legacy brands to reinvent themselves," Manocha said.
As part of this investment, TriArtisan's brands will have access to C3's Go by Citizens app, a digital food hall where customers can order from multiple C3 brands in one transaction without added fees. C3 claims the average for orders on the app is 78% higher than other clients on Lunchbox's hosting platform, according to the press release.