In the new era of dining, people want more variety than what they get from their local diner.
A new type of restaurant is making waves in the hospitality industry- virtual restaurants. This has gained popularity with their innovative business model.
In this post, we will discuss the things readers need to know about virtual restaurants.
Customers have come to expect a greater degree of flexibility when it comes to ordering food and restaurants are having difficulty meeting these changing needs. To stay competitive, restaurants have started offering a variety of different options in terms of ordering. In-house dining, on the other hand, rose as the most popular option these days, however, there are people who have now preferred online orders or contactless pickups.
Virtual restaurants are becoming a growing trend as they allow hospitality businesses to expand their services without the cost of opening new establishments. Let’s explore what it is and how you can start your own virtual restaurant.
What Is A Virtual Restaurant?
Virtual restaurants are exclusively available online. They might exist in the same location as another restaurant that offers dine-in, but they operate under a different brand. Food services are only through ordering online via their website or app, delivered straight to where you are for an additional fee (usually). One of the greatest things about this is that you can order through your phone.
Ghost kitchen vs Virtual restaurant
Virtual restaurants and ghost kitchens are similar in that they both produce food for selling. However, virtual restaurants have their own specific location with their own kitchen where the food is produced while ghost kitchens use rented spaces often shared by other companies to create meals.
Advantages of Virtual Restaurants
In recent years, the hospitality industry has seen a growing demand for delivery and takeout options. Online ordering is one of these services that help restaurants compete with other industries such as grocery stores and convenience shops.
Starting a restaurant and having it operate virtually is beneficial for restaurants that are just starting out, or those that want to try out new ideas.
If you already have a restaurant and are looking to start up your own virtual brand, splitting the costs of food supplies and labor, a virtual restaurant will allow for lower overhead. With less capital needed in creating new locations or equipment, it is easier to get started.
As you are not opening a new location or renting out any space, the risk is limited to your online ordering platform and website. Your existing restaurant will also share in this risk since it runs alongside your virtual brand.
Virtual restaurants give restaurant owners the opportunity to explore new ideas without risk. Opening a virtual brand allows them to test out different concepts, menus, and services all while using their current staff, ingredients, and operations.
Examples of Virtual Restaurants
“Smokey Bones Bar & Fire Grill” ventured into the virtual restaurant landscape after getting a better understanding of how their menu performed in dine-in and delivery.
James O’Reilly, Smokey Bones CEO, spoke at a Restaurant Business’s webinar about how Smokey Bones has been focusing on its off-premise business. “A consequence of that was growing with partnerships with third-party marketplaces like DoorDash and Uber Eats, which allowed us to explore the virtual restaurant opportunity.”
After working with third-party platforms, Smokey Bones realized that the menu items they were most successful at selling on these sites weren’t their specialty (like burgers and wings). This led to the creation of two virtual restaurants: “The Wings Experience” and “The Burger Experience” which operate out of current locations. Both offer delivery options.
How to Start A Virtual Restaurant
Restaurants that want to expand into the virtual world should first evaluate their existing concept and look for ways they can create a new one out of it.
Analyze your current operations
In order to add a new brand, you will need space in your operations. While it is not meant to take up all of the business’s capacity, adding an additional menu or process might be necessary.
Take a look at your menu performance
Your menu is a great place to start in deciding what your virtual brand will offer. If you have certain items that are performing well but don’t tie into the current restaurant, then this might be a good starting point for designing your new company.
Train restaurant staff
When you are changing your menu, it is important to make sure that everyone knows what they’re doing. This means more training and resources for staff members who will be working with both the old and the new brand.
Focus on naming and branding
When opening a virtual restaurant, one must be careful to find branding that stands out. “O’Reilly burgers and wings” chose simple names with matching logos for their digital storefronts in order to help them stand out among other products on the internet.
André Vener, a Partner at Dog Haus, went with naming their menu items creatively. They let the vendors participate in choosing names for all of their products and are mindful of trademarking potential conflicts.
Choose the right technology partner
Running two brands under one roof can be a challenge. To make it easier, you need to choose the right restaurant point of sale (POS) for your needs. Here are some of the most important things to consider:
- Ease of use
- Offers online ordering capabilities
- Works seamlessly with restaurant eCommerce website
- Consolidates online orders in one single screen
- Syncs menu with major food delivery apps
- Manages all locations in one system
- Excellent support
Figure out delivery logistics
In 2020, the COVID-19 pandemic caused a major shift in customer preferences. Customers no longer wanted to have contact with restaurant employees or other customers and so restaurants had to provide takeout options for their patrons. The only way that they could do this was by providing online delivery as well.
When you operate a virtual restaurant, your entire operation is built around delivering food to customers. The logistics of this can be complicated and needs to be well thought out in advance.
When considering your delivery strategy, ask yourself the following questions:
- Are you going to use your current fleet of delivery vehicles?
- Do you need to hire additional delivery drivers?
- Are you going to use a 3rd party delivery service?
It is important to think about how you will manage these delivery partners and orders. You might need some help with this, so make sure that you know the best way to handle it.
Final Thoughts on Virtual Restaurants
Hospitality is expanding beyond the boundaries of the traditional dining. As this happens, there are new opportunities for restaurateurs everywhere to explore and experiment with their menus. Now’s a good time to take an honest look at your current setup and see if it’s a wise decision to go virtual.