Consumers will go hungry if they try to find any of 25 new Famous Dave’s locations via Google maps or a GPS. The only shot they’d have is inputting “Johnny Carino’s” for some reason as their destination.
That reason might be crystal clear to the swarm of restaurants that are using ghost kitchens to put their food within a short delivery hop of more consumers. Famous Dave’s, a barbecue chain, announced last week that it had granted franchisee Bluestone HospitalityGroup the rights to develop 25 more locations. Not a one of them will require a single brick or trowel of mortar. Bluestone will offer Dave’s menu from branches of a second business, its wholly owned Johnny Carino’s brand.
“It’s a straight licensing deal,” says Jeff Crivello, CEO of Famous Dave’s parent BBQ Holdings.
The deal, though no longer unusual in form, may be one of the more notable instances of existing restaurants’ kitchens being used as the production facilities of a separate brand. Some of the double-duty kitchens are located in areas Famous Dave’s has yet to enter. Others provide an easy way to backfill a market and boost brand awareness, even without more ground being broken. “That’s the efficiency and the beautiful thing about the model,” says Crivello.
It's not an unfamiliar one for BBQ Holdings. The company is also using a unit of its Granite City brew-pub chain as the ghost kitchen for a Famous Dave’s. The deal with Bluestone was the result of trying the arrangement at three Johnny Carino’s units in California. Famous Dave’s delivery sales out of those test sites were running around $10,000 a week, without the usual cost load, according to Crivello.
More pairings with other brands are sure to follow, possibly including other operations within Bluestone’s fold, according to the CEO. “If we can get to 50 over the next year, we’d be happy,” comments Crivello.
BBQ is also using a ghost kitchen complex, a facility in Chicago that provides prep areas for several brands, including Portillo’s. Picture an apartment building, with the units consisting of kitchen spaces instead of residences.
The arrangement has been a big success, says Crivello, who notes that ghost kitchens are already diversifying into a variety of types.
“As with any other business model, there’s an evolution,” he says. There’s the classic ghost kitchen arrangement, where a brand’s menu items are prepared in the back-of-house of an existing restaurant or within a multi-resident facility such as the ones operated by Cloud Kitchen or Kitchen United. Typically the food is offered just for delivery, with takeout sometimes available as well.
The nearest variation, according to Crivello, is offering selections from the add-on brand to the menu of the brick-and-more restaurant doing double duty as a ghost kitchen. Exterior signage and instore materials might call attention to the availability of another brand’s specialities.
Famous Dave’s is already trying that at a Carino’s, which saw its volumes jump 10%, he says.
The most ambitious form, he continues, is a true co-branded location—two restaurants combined under one roof, a side-by-side pairing of two succinct operations. Famous Dave’s is set to gave that arrangement a try in the Phoenix area.
Meanwhile, the brand is also focusing on other avenues of evolution, including the addition of drive-thrus to full-service restaurants. “That’s why we bought Real Urban Barbecue,” a limited-service one-off in Chicago, says Crivello. “It has a cafeteria serving style, and a drive-thru would essentially be a set-up like that.”