Casual dining is still hurting as the COVID-19 pandemic keeps many customers from dining in. That has BBQ Holdings, the parent company of Famous Dave’s and Granite City, using virtual outlets to bridge the ongoing sales hole.
“How do you fill those gaps? We really found that ghost kitchens virtual brands and dual-concepting are really working,” said BBQ Holdings CEO Jeff Crivello.
Currently, the company has 17 non-traditional restaurant outlets, including seven ghost kitchens, eight virtual restaurants and one co-branded restaurant.
The company just launched Hayward’s Hen House, jumping into the chicken delivery game with several other virtual operators. The delivery-only concept sells a dozen wings, a chicken-tender basket, a chicken sandwich and a burger for $10 each on third-party delivery platforms. All the items come right from the Famous Dave’s pantry, and the sandwich is the same as the barbecue chain’s entrant in the chicken-sandwich wars. That launched about a week ago out of the back of eight Famous Dave’s brick-and-mortar locations.
Crivello said the concept is doing well, but the company will continue to work on the operations and keep an eye on sales for about two months before they start marketing or potentially rolling it out across the system or in certain markets. He said there could be potential for other highly focused virtual brands as well, but chicken is a good starting place.
“It will be strategic, right now chicken is very hot,” Crivello said. “Football season just started, so we’re going to start there. And we have a fantastic chicken sandwich.”
As for the ghost kitchens, the company has a couple Famous Dave’s locations inside shared kitchen spaces, some franchisees’ own kitchens and out of a centrally located Granite City location. He said they have been buoyed by well-traveling food and the work Famous Dave’s has done in the past several years around delivery. That’s something the company is working on for Granite City, too, but since they acquired the concept in March of this year just as the pandemic was spreading, there hasn’t been much time to change the perception.
“Famous Dave’s has spent the last three years working on off premises, Granite City is really known for their brewery beers, Sunday brunch and private dining rooms, not necessarily for their off premises so it will take a little more time to fill the gaps at Granite City,” said Crivello.
Still, he said, each of the ghost kitchens are doing about $10,000 a week in sales. That’s a little less than 25 percent of weekly sales at traditional locations as outlined in the company’s franchise disclosure document. But that’s doing a lot to fill the sales bucket. Crivello said the company is doing better than the negative 35 percent seen in March, and the additional virtual sales help push sales even higher.
The work the company had already done on off-premises helped when the trend toward convenience accelerated. And as consumers continue to find their favorite delivery and take-out in a mostly off-premises world, the sales in virtual and ghost kitchens are providing repeat business.
He said having relationships and optimized menus on all third-party networks kept them ahead of many casual restaurants that had to scramble in March, and hardware helped, too. Heated shelves were a major investment in off-premises at about $3,000 per restaurant, but it’s differentiating Famous Dave’s and will ensure Hayward’s concept or any other virtual or ghost operations will travel a little better.