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Virtual Restaurants: Disruption or Distraction? Maybe Neither.

This year, IFA’s annual convention went virtual. Although it looked a little different, the panels and conversations were nothing short of exciting as we took a deeper dive into the future of franchising. Specifically, I sat in on a proctored discussion – Virtual Restaurants: Disruption or Distraction? – featuring Geoff Alexander, President, CEO, Wow Bao; Barry Thomas, Global Customer Leader, The Coca-Cola Company; Ashlee Tran, Director of Merchant Strategy and Operations, Door Dash; and Fish Consulting’s newest client, Rishi Nigam, Senior Executive, Franklin Junction.

Panelists discussed the virtual restaurant space, projected to become a $1T market by 2030, and how it has quickly become an area of major interest, particularly during the pandemic. They also broke down the myriad of different models from “ghost”, “cloud”, and, now presented by Franklin Junction, “host®” kitchens. Ultimately leading up to the question – are virtual kitchens here to stay? A disruption or a distraction?

Spoiler alert – all of the panelists weighed in and decided, neither. Rather seeing the virtual kitchen space as an innovation that will propel the future of foodservice. Especially considering that, in economic hardships, the hospitality sector is almost always hit the hardest. As a result, we’ve seen restaurants coming together to innovate and collaborate rather than fall apart. The often traditional foodservice space is now catching up to the virtual and on-demand landscape at a faster rate than ever before to align with consumer needs and diversify offerings.

With that came the new idea of a Host Kitchen® and Franklin Junction leading the charge. For background, Franklin Junction pairs a host kitchen (i.e. restaurant, hotel, convenience store), which offers their kitchen space, staff, and resources, with a concept partner (i.e. foodservice brand), who can create food out of the host space and deliver product to customers through third party delivery apps. Overall, Franklin Junction facilitates any and all logistics involved to get the hosts up and running with up to three concepts in their kitchen to generate supplementary revenue for all parties involved. In the end, hosts are able to monetize their kitchen space and concepts can broaden consumer reach, whether they’re testing new markets or LTOs.

With this new wave of virtual kitchen innovation, the foodservice industry is sure to see an onset of both challenges and opportunities. The idea of virtual marketing, delivery partnerships, research and development, and industry cross-collaboration will transform all while opening foodservice concepts to new venues, markets, and areas of service. Either way, it is an exciting time for the foodservice industry and we’re all watching what will happen next!