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.

Part 3 of a 6-part series by Emma Liem Beckett, originally published in Restaurant Dive, October 19, 2020

Staring down double-digit same-store sales declines at the end of Q2 2020, Famous Dave’s parent company BBQ Holdings knew it had to act quickly. The company, which closed an acquisition of 18 Granite City locations weeks before the pandemic hit, was forced to lay off 85% of its staff, manage its cash flow and shift to a to-go only strategy at the height of dining room closures.

Fortunately, it had been developing a strategy to expand and grow its operations without physical locations.

The company partnered with its existing franchisee, PDX Partners, during the second quarter to provide Famous Dave’s food for takeout and via delivery service providers in two of PDX’s Johnny Carino’s restaurants in California.

“When you get hit in the face with a meteor, you have to react much faster than in any other time,” BBQ Holdings CEO Jeff Crivello said.

In early October, it signed another franchisee agreement with Bluestone Hospitality to open Famous Dave’s for delivery only inside an additional 25 Johnny Carino’s restaurants throughout the country. The barbecue chain also launched a virtual brand called Hayward’s Henhouse this fall in nine Famous Dave’s restaurants, offering chicken wings, a chicken sandwich, a burger and fries, Crivello said.

“The evolution of moving up toward finding more efficient space was really just exacerbated by the pandemic,” Crivello said. “These were all ideas that had been on the docket to do for the last couple of years. … Then all of a sudden, they get a rocket boost by the pandemic, because something has to happen.”

And, so far, the results of its ghost kitchen operations have been positive, Crivello said.

“We’re very happy, very pleased with the results,” Crivello said. “This will really be a focus of our growth over the next year at least.”