Florida restaurant chain says ghost kitchen licensing agreement, in the works since last year, is well-timed amid COVID-19 crisis.
BurgerFi, an emerging grass-fed burger brand based in Florida, is expanding its United States footprint through a licensing partnership with ghost kitchen operator Reef Kitchens.
Reef Kitchens, an off-shoot of Reef Technology, launched its on-demand food hubs last year inside the company's high-tech parking facilities. Each neighborhood kitchen works with major U.S. food delivery services such as Uber Eats, DoorDash and Grubhub. By the end of the year, BurgerFi expects to enter new markets where Reef has set up ghost kitchens in Seattle, Nashville, Minneapolis and Houston.
The first delivery-only BurgerFi operation could open as early as June. Additional delivery-only markets are planned for 2021.
Chief Operating Officer Nick Raucci said the 125-unit North Palm Beach, Fla. chain began talking to ghost kitchen facility operators last year as it looked for a way to enter new markets without building a brick and mortar restaurant. Given the current climate, Raucci said the timing was right to cut a licensing deal with Reef Kitchens.
“It was really a vision of the future. We like to stay ahead of the trends and the curves,” Raucci said in a phone interview Wednesday with Nation’s Restaurant News.
He said BurgerFi, which has about 25-30 units in development, chose Miami-based Reef Kitchens because it was the most tech savvy and well-funded of the cloud kitchen operators.
Reef Technology began putting virtual restaurants inside their high-tech parking facilities last year. Raucci said the tech hubs are more like neighborhood kitchens, offering delivery drivers space for charging phones and using restrooms in between deliveries.
“They [Reef] are way out ahead of everyone else,” Raucci said.
The food hubs are geared for delivery only, not pickup. BurgerFi said the licensing agreement works like a franchise partnership, where Reef is the operator and hires the employees. Workers are trained by BurgerFi, which makes money through licensing fees.
Other ghost kitchen facilities typically rent space to brands.
BurgerFi serves American Black Angus beef never exposed to steroids, antibiotics, growth hormones, chemicals or additives. Over the past year, it has focused on non-traditional growth, announcing plans to open locations on Air Force bases and in airports.
A majority of company and franchise restaurants have remained open during the pandemic except for locations at airports and universities. Raucci said the chain is well positioned to handle operating restrictions resulting from the COVID-19 outbreak because the company had previously invested heavily in digital ordering channels, as well as delivery.
“Some of our restaurants are beating sales from last year,” he said.
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