By Jason Apple
Although challenging, the last few years have brought about some exciting and innovative new concepts to the world of dining out. When B.C.-based Joseph Richard Group (JRG) established Meal Ticket Brands, there was a lot of learning to be done about this new world of virtual restaurant concepts and how it would all play out. With a few years under its belt, we’re diving into the key elements that have driven Meal Ticket Brands’ success in this new market and the lessons we’ve learned along the way.
What’s Working Well
Portfolio of brands/concepts: One of the key factors driving success in the virtual brand restaurant industry is the strategic development of a portfolio of brands and concepts. Aligning the right brands and concepts with restaurants can streamline the launch process. This approach offers numerous advantages, such as staff familiarity with products, minimized training requirements, and tighter control over the cost of goods (COGs).
Additionally, having multiple compatible concepts allows for easy expansion. New brands can be introduced with minimal hassle if the restaurant partner can handle more orders. For instance, designing new brands with compatibility in mind, such as SKUs for JRG’s Mac & Cheese brands being compatible with Grilled Cheese brands, allows for a dramatically differentiated product range. This flexibility enables restaurant partners to launch with one or more brands and subsequently add compatible brands, generating incremental revenue.
Teamwork makes the dream work: Let’s face it, running your own business is tough enough, but the idea of adding additional brands can be overwhelming. However, the power of collaboration is undeniable. Success stories from Meal Ticket Brands’ stores from B.C. to Ontario and beyond demonstrate that teamwork and a proven formula can lead to success. Companies offering virtual brand solutions have developed onboarding, training, support, marketing, and account management to work closely with restaurant partners, ensuring their success.
Show me the money: The ultimate measure of success in the restaurant industry is profitability. Many restaurant partners are making money and increasing their profits by adding virtual brands or concepts. This success testifies to the positive impact of virtual brands on the industry. Companies in this space continually assess COGs, market pricing, and promotional strategies to ensure their partners remain profitable and busy.
Lessons Learned
Menu differentiation in third-party delivery: One of the lessons learned in the virtual brand restaurant industry is the importance of menu differentiation in third-party delivery services such as SkipTheDishes, DoorDash and Uber Eats. Restaurants cannot simply copy and paste menus from their existing establishments. Each menu must be unique to provide a distinctive dining experience. This requirement underscores the importance of menu design and restaurant efficiency.
Substance over sizzle: The industry has witnessed the rise and fall of celebrity brand partnerships. Rapid and widespread growth, low barriers to entry for restaurant partners, and inadequate quality control contributed to the downfall of some celebrity brand collaborations. While celebrity branding creates initial buzz, the execution of menus must meet customer expectations. The lesson here is to focus on delivering a great product and scale based on the ability to service customers and partners consistently. Look for underserved concepts that will enable your brand/product to stand out.
People, process and technology: Success in the virtual brand restaurant industry relies on a harmonious blend of people, processes, and technology.
People: Restaurant ownership and teams must fully embrace the value and impact of adding virtual brands. Without buy-in, confidence, and a focus on delivering a great brand and product, success is challenging to achieve.
Process: Developing menus that align with the existing processes and ingredients of the restaurant is essential. Detailed documentation, including order guides, build guides, videos, and printed instructions, along with packaging guidelines and troubleshooting resources, helps the team bring the menus to life.
Technology: Employing a tech stack of tools for training is critical, as training staff is an ongoing process. A portal with video, PDFs, and other tools can differentiate a business and support long-term goals. Another critical component is order aggregation, which allows your brand to live on multiple platforms (e.g., Skip SkipTheDishes, DoorDash, and Uber Eats) without requiring a separate tablet for each, streamlining order management.
Partner with “skin in the game”: While it is possible to go it alone in the virtual brand restaurant industry, partnering with restaurants with “skin in the game” can accelerate the path to profitability with lower risk. These partnerships are often based on performance, where the restaurant only gets paid when orders come in. In such partnerships, restaurants receive full support and can focus on execution rather than dealing with the training, promotion, and management of virtual brands.
The virtual brand restaurant industry is an exciting and promising field where creativity, adaptability, and collaboration are keys to success. By leveraging the valuable insights and strategies shared in this article, restaurant owners and entrepreneurs can navigate the brand-new territory of virtual brands and establish thriving businesses. The road to success is open for those who embrace innovation and are willing to adapt, especially in challenging times.
