Last month, Cracker Barrel opened its first urban location in its 50-year history.
But the Hollywood outpost doesn’t have the characteristic front porch, homey interior or adjoining gift shop that define the chain’s 660 other restaurants. In fact, it doesn’t look anything like a Cracker Barrel, at least not from the outside.
That’s because Cracker Barrel’s first urban location is also its first ghost kitchen. Located inside a multibrand facility operated by CloudKitchens, the off-premise-only Cracker Barrel Kitchen concept will offer some of the chain’s most popular dishes via third-party delivery from 8 a.m. to 9 p.m. daily.
It is one of a few casual-dining chains that are taking advantage of smaller-footprint kitchens and third-party delivery to extend their brands into dense urban areas, where it would be otherwise difficult to find real estate for a traditional brick-and-mortar restaurant.
Cracker Barrels, for instance, are usually located on large lots along highways in the middle of the country. But the rise of delivery during the pandemic, and the ensuing explosion of virtual, delivery-only brands, have broadened its horizons.
“The expansion of Cracker Barrel's virtual brands like Cracker Barrel Kitchen will allow for those in some of America's biggest cities to get a taste of the brand's beloved comfort food,” the company said in a press release. The Hollywood outlet is the first of what the company expects to be multiple locations in Los Angeles County.
Casual-dining stalwarts Chili’s and Applebee’s are adopting similar strategies. Chili’s owner Brinker International said last month it plans to enter new markets with a combination of ghost kitchens and its own small-format, to-go-only restaurants.
“That will afford us the opportunity to get to places where our Chili's brand has not been able to get to before, dense urban and college towns,” CFO Joe Taylor said during the company’s investor day last month.
It is opening its first ghost kitchen this month in Midtown Manhattan, serving food from both Chili’s and the It’s Just Wings virtual brand. The location will be Chili’s second restaurant of any kind in New York City, according to its website. The other is a dine-in location in Glendale, a neighborhood in Queens.
“We think that is a huge opportunity to unlocking future growth in growing our footprint,” Taylor said.
Applebee’s currently has two ghost kitchens in Philadelphia and will open a third soon, in Miami. The Philly outlets are inside CloudKitchens facilities near Temple and Drexel universities, giving them access to large, captive student audiences.
The kitchens are 200 to 250 square feet at most, said President John Cywinski, and operated by an Applebee’s franchisee.
Applebee’s also has one traditional brick-and-mortar store in Philadelphia. But in other places, like Chicago, “where we don’t have any restaurants in the city, all of a sudden you can get access to Applebee’s online,” Cywinski said.
As it looks to open more ghost kitchens, Applebee’s will likely target densely populated areas in markets where it already has franchisees. “But we’re also open to doing so in some geographies where we just don’t have a strong presence,” Cywinski said. “I think we probably will end up pursuing both.”
With only two kitchens open, it’s still too early to quantify their performance, he said. As it opens more over the next year, he expects a clearer picture to emerge.
“The ROI is very attractive. That I can say,” he said.