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Wendy’s Unlocks `Power of Proximity’ in Delivery Kitchen Partnership

As pandemic challenges continue to damper the appeal of indoor dining, foodservice companies are leaning ever further into the delivery space.

Last week, Wendy’s upped the ante with its ambitious four-year plan to launch 700 delivery kitchens across the U.S., Canada, and the U.K.  Through a franchise partnership with REEF Technology, the companies plan to open approximately 50 delivery kitchens in 2021, with the remainder launched by 2025.

While ghost (or dark) kitchens are a relatively new concept, Wendy’s has pegged these non-traditional locations as a key element in their mission to unlock explosive growth.

“Delivery kitchens enable the brand to go to market and build brand awareness faster than we could otherwise with traditional restaurant development only,” a Wendy’s representative told The Food Institute. “Further, convenience has been redefined at an even more accelerated pace, with delivery being a more important channel than ever before.”

Modular Model Power

In 2021, the speed at which food is delivered has continued to accelerate with 10-minute turnaround now the goal for multiple companies. Physical proximity to the customer plays a major role in achieving that goal.

As the largest operator of parking facilities in North America, REEF Technologies parlayed its real estate into the rapidly expanding food delivery segment in 2019.

“Food delivery is growing 300% faster than dining in at restaurants,” a REEF representative told The Food Institute. “We believe [parking] facilities are perfect for operating virtual kitchens because they are centrally-situated near population centers, convenient, and often underutilized.”

REEF’s delivery kitchens will enable Wendy’s to bring its brand that much closer to customers. This is particularly valuable in dense urban areas where it can be challenging to build a traditional free-standing restaurant, especially with a pick-up window.

REEF also tailors each partner’s kitchen to their unique delivery and pick-up specifications. According to a Wendy’s spokesperson, most of the chain’s kitchens will be modular without public access.

The Bottom Line

While the majority of ghost kitchens rent out commercial kitchen space for food brands, REEF’s delivery kitchens are completely turnkey so the value proposition is much different.

In addition to bringing food preparation closer to customers, the franchise partnership enables Wendy’s to rapidly expand its brand while sidestepping operational expenses and hiring concerns.

“Our kitchens and culinary team are managed entirely by REEF,” the spokesperson added. “This makes it easier to start up by lowering opportunity costs.”