Virtual restaurants

Courtesy of Brinker International

Note from the editor

Prior to the COVID-19 crisis, virtual restaurants were hailed by the restaurant industry as a futuristic revenue opportunity for digitally savvy, deep-pocketed chains with money to spend on experimentation. But the pandemic's off-premise-only environment illustrated the potential these concepts hold. Virtual restaurants can be a springboard for budding chefs to become restaurateurs and can allow restaurants to trial new menus. 

The pandemic environment sparked a wave of investment in the virtual restaurant space over the past year. In June 2020, Chili's parent Brinker International legitimized these concepts when it launched its first virtual restaurant, It’s Just Wings, and soon projected the brand would rake in $150 million in sales in its first year. 

It's Just Wings is still on target to hit that mark as it competes with an influx of competitors. Brinker CEO Wyman Roberts said.  

There’s been a spike in virtual chicken brand space alone, with the recent launches of Smokey Bones' The Wing Experience, Nathan's Famous' Wings of New York, Applebee's Cosmic Wings, Bad Daddy's Bad Mama's Chicken and Bloomin' Brands’ Tender Shack.

Now that the segment is becoming more crowded, restaurants are beginning to diversify their offerings, like allowing diners to order pickup as well as delivery, for example. New questions are arising as operators enhance their brands to meet diner expectations for convenience with experience. This report examines some key queries about virtual restaurants, including: 

  • How can operators drive awareness of their virtual restaurants online?

  • Is it better for virtual restaurants to live on third-party delivery websites and have access to a broad consumer base or live on a restaurant's platform exclusively?

  • Can virtual restaurants help restaurants quickly recover revenue lost to the pandemic?

We hope you enjoy this deep dive on the challenges and lucrative opportunities that virtual restaurants pose for the restaurant space.

Emma Liem Beckett Editor

How ghost kitchens are helping major restaurants recoup lost revenue

Chains like Famous Dave's and Brinker International were already moving toward delivery-only concepts pre-pandemic, allowing them to more quickly deploy these concepts compared to other restaurants.

• Published Oct. 19, 2020

How to make ghost kitchens and virtual brands profitable

Jumping into a ghost kitchen may seem like a way to recoup lost dining room sales during the pandemic, but operators need to consider food costs, labor, marketing and brand equity to ensure a payoff.

• Published Oct. 12, 2020

Bloomin' Brands takes virtual brand Tender Shack national

Carrabba's and Outback Steakhouse restaurants will primarily host the chicken-focused concept, which is available across 725 locations.

• Published Feb. 19, 2021

For restaurant chains, marketing virtual brands poses equal challenge and opportunity

Third-party delivery apps, where most virtual brands live, offer marketers access to consumer data they don't otherwise have — an increasing priority as the data privacy landscape tightens.

• Published March 19, 2021

How do you create an air of authenticity when your brand is virtual?

With online ordering revolutionizing the takeaway food industry, "virtual restaurants" still need a physical presence to put a human face to their brand, argues James Rix, CEO of Crowdify Global.

• Published April 22, 2019

Brinker integrates with Google for pickup of It's Just Wings

Patrons can now search for the virtual brand using Google Search and Google Maps, place their orders, pay and pick up at Chili's restaurants.

• Published Jan. 28, 2021 • Updated March 24, 2021

The rapid growth of virtual restaurants

There was a wave of investment in the virtual restaurant space in 2020, as restaurants adapted their offerings to ride through the pandemic. Now that the segment is becoming more crowded, operators are experimenting new ways to enhance their brands and meet diner expectations for convenience with experience.

included in this trendline
  • How ghost kitchens are helping major restaurants recoup lost revenue
  • Bloomin' Brands takes virtual brand Tender Shack national
  • How to make ghost kitchens and virtual brands profitable