After 48 years of brainstorming restaurant concepts to catch emerging trends, Robert Earl thinks he’s hit on The Big One—bigger than eatertainment, the wave he helped to foster and then rode with Planet Hollywood and Hard Rock Café. Possibly even bigger than fast casual, where he’s set his marker with the Earl of Sandwich chain. It’s just a matter of time, he’s wagering, until every independent restaurant supplements its brick and mortar operation with at least two invented brands that produce delivery-only meals from the same kitchen, under names chosen to come up higher in web or app searches.
Earl is developing a business separate from his extensive restaurant holdings to provide independents with ready-made choices. The first of his VACs, or virtual additional concepts, is Tyga Bites, a brand specializing in baked nuggets of all-natural chicken dusted with spicing and served with dipping sauces, all prepared to the specifications of the rap star Tyga. Earl, whose past business associates have included the likes of Arnold Schwarzenegger and Bruce Willis, plans to develop a stable of other VACs, each focused on popular menu items and affiliated with a celebrity.
Restaurants that have a relationship with Grubhub can opt to offer Tyga Bites without paying a royalty to Earl and Tyga. Instead, Earl says, he and Tyga will take their cut from the commissions paid to Grubhub for every order that’s delivered by the service. “The only additional cost to the restaurant is the cost of your opening inventory, which will run about $1,000 to $1,500,” says Earl. Those figures included packaging imprinted with Tyga Bites brand cues.
The fee structure may be unorthodox, but Virtual Dining Concepts will otherwise function as a conventional franchisor, according to Earl. It provides the recipes, the training and the marketing support. The quality of execution will be checked by monitoring what’s said about the brand and its products on social media, Earl explains.
“At an absolute minimum, every sales dollar will yield you 35%—minimum—that you keep,” Earl says, after apologizing for lapsing into what he termed his sales mode, an apparent occupational hazard for the entrepreneur. “This is the answer for the future of restaurants.”
He’s far less bullish about ghost kitchens, the other avenue many operators are taking to expand their sales and market reach without investing in additional brick and mortar. The kitchens—essentially multi-kitchen complexes where a variety of concepts have a back-of-house staff produce meals for delivery and takeout—may eliminate the usual construction costs, Earl agrees. But, “if you go into a cloud kitchen, you’re creating a separate labor force, a separate rent base, a separate utility bill,” he counters. “If you do something out of your existing restaurant, all three of those costs are at zero.”
He adds that virtual dining concepts aren’t a novelty anymore. “There are about 15,000 virtual brands already in the U.S.A., and they are all individual brands,” he says, referring to the ventures that are invented by the big third-party delivery services after they notice users of their apps are frequently searching for a particular menu item—banh mi, say—that isn’t readily available in their area. The services typically approach a local independent operator about preparing and selling the product for delivery under a different name to exploit the unmet demand. The invented brand typically incorporates the name of the product—maybe Banh Mi by Me, in this instance--so the concept will appear as a top option in searches for the item.
In most instances, says Earl, customers of the virtual concept don’t know the food is coming from a brick-and-mortar “day business” that offers a much different menu. Nor are customers of the mother ship aware that, say, their favorite pizzeria may have a side business selling ban mis.
And, asserts Earl, they wouldn’t care in any place. “The only thing that really matters to you is how quickly the food is going to get to you, and how good it is,” he says.
Earl is no stranger to virtual concepts, though his VDC business is still in the ramp-up stage, with locations currently in 30 markets and a target of 500 locations by the end of August. He already has a number of virtual brands that are affiliated with his brick-and-mortar restaurants, which include Buca di Beppo, Bertucci’s, Brio Bravo and Bravo Cucina. “They’re doing quite well,” he says.
He also has a standing celebrity affiliation through his collaboration with TV star and chef Guy Fieri, a chicken sandwich brand called Chicken Guy.
His culinary partner in VDC is Eric Greenspan, the Los Angeles chef who defeated Bobby Flay on “Iron Chef America” and has appeared as a frequent guest on a slew of cooking and food shows. He’s also developed a number of virtual brands at the incubator kitchen he runs.
A celebrity connection will be crucial to VDC because it will set the company’s virtual ventures apart. “If I’m good at anything, I’m good at celebritizing a business,” he says.
The involvement of stars such as Sylvester Stallone and Demi Moore was instrumental to the success of Planet Hollywood, a pioneer of the eatertainment segment that took the industry by storm in the 1980s and ‘90s. Earl himself is no stranger to show business. He is the host of a show on the Cooking Channel called “Robert Earl’s Be My Guest,” and his namesake father was a well-known entertainer in the United Kingdom.
Earl stresses that the launch of VDC does not mean he’s giving up on brick and mortar restaurants. Indeed, he says he’s likely to add more conventional hospitality brands to the fold of Earl Enterprises as the pandemic nudges more operators to sell their concepts. “I am your ultimate deal junky,” he comments.
Many past associates would give an amen to that assessment. He’s owned Planet Hollywood several times, founding the brand in 1991 and twice buying it out of bankruptcy. He bought 45 units of the Brio and Bravo Italian chains for under $30 million, saying it would be “the deal of the century” if it weren’t for the unforeseen impact of the COVID crisis.
He bought the 58-unit Bertucci’s full-service chain for $20 million.
The launch of VDC is “more important than the things I’ve done before,” because “I can really help the independent,” Earl says.
“For the last two years, I’ve been watching a bit of a slow demise of the restaurant industry,” he says in a British accent right out of Masterpiece Theatre. “There’s been excess supply of restaurants that is largely the result of repurposing of bad retail locations.” Virtual concepts, he explains, minimize the risks of a bad siting. “All your risking is your opening inventory,” he emphasizes.
He won’t reveal what his next celebrity-affiliated virtual concept might be but notes the limited delivery options available to consumers who appreciate high-quality antipasta and Italian bread.
“There are over 350,000 independent restaurants in this country. Every one of them over a period of a few years will be creating virtual brands,” he predicts. “And I’d like to give them the choices.”