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A few months ago, celebrity chef David Chang opened an outpost of his quick service chicken chain Fuku in Atlanta. This was met with the typical glowing press. But there were no reports from the grand opening, no pictures of the restaurant. Because Fuku isn’t one in the traditional sense. It doesn’t even have a website. It’s a virtual brand. In the second of what I said would be two notes— but at this rate may be a hundred and two— we’ll dig a into the challenges small independent restaurants face in the coming decade. This note is going to deal with technology (and the VC money behind it). Before we get too much further let’s define a couple of terms that will be important. [This bit won’t be too snarky. Apologies.] The first term to know is delivery app. Certainly everyone on this email knows of or uses delivery apps like Uber Eats, DoorDash or Grubhub: these are the Ubers of F+B that connect customers with restaurants and deliver food between the two for a fee. The second term to know is virtual brand. A virtual restaurant brand does not have a “front door” or a dining room. You can only order a virtual brand’s food online or via delivery app, and usually only for delivery. Lastly, virtual brands often (but not always) prepare food in ghost kitchens, or dark kitchens. This is a broad term that simply means any commercial kitchen of any size, where the final product is consumed offsite. Large VC-funded operations like REEF and Cloud Kitchens have gotten into the game in a big way. They buy or rent commercial real estate, build out dozens of tiny commercial kitchens, then lease / sublease those tiny kitchens to restaurant brands both virtual and real. A food court without patrons.
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