Does Your Wendy’s Burger Need to Be Made in a Wendy’s? The Fast-Food Chain Doesn’t Think So

Wendy’s and REEF are developing 700 delivery kitchens in the US, Canada and the UK by 2025. This is after a successful pilot program in Canada that included eight delivery kitchens in 2020.

REEF is an operator of parking real estate and delivery kitchens, logistics hubs, and kitchens. This collaboration between REEF and Wendy’s will bring the fast-food franchise to the UK for the first time.

“The demand for convenient delivery solutions means we must look for opportunities beyond our traditional restaurant formats, especially in dense urban areas,” said Abigail Pringle, Wendy’s president, international and chief development officer, in a press release. “This partnership with REEF is testimony to our ambitions, the potential we see to grow our beloved brand and our quest to reach more customers in more ways.”

Delivery kitchens is another term for “cloud” or “ghost kitchens” which are commercial facilities used to produce food specifically for delivery. Since they don’t require dedicated dining space or wait staff like a traditional restaurant, delivery kitchens can help delivery-based food businesses keep overhead low.

For the Wendy’s/REEF partnership, each delivery kitchen is expected to see sales of $500,000 to $1 million per year. Wendy’s will be getting royalties of 6 percent of sales. Additionally, third-party delivery companies such as DoorDash, Uber Eats and Grubhub will be the ones to deliver the food to customers.

REEF has delivery kitchens in over 30 cities worldwide. They want to help reduce traffic congestion and pollution by bringing food and customers closer to one another. The locations are conveniently placed and this means having shorter delivery times within neighborhoods.

“We are proud to partner with Wendy’s to show how a restaurant brand can successfully and conveniently scale with REEF’s delivery kitchen platform to reach more customers faster and with Wendy’s world-famous commitment to quality food and service,” said Michael Beacham, president of REEF Kitchens, in the same press release.

“Wendy’s is an incredible brand and we look forward to being a part of their continued success in the future,” he continued.

Related: Will Cloud Kitchens Emerge as the New Normal Post-Pandemic?

The demand for restaurant delivery grew drastically during the pandemic due to restaurants having to close indoor dining. Restaurants saw that before the pandemic, food delivery accounted for 3.3 percent of their traffic. In 2021, that number rose to 8.4 percent.

In the second quarter of 2021, Wendy’s said that their digital sales accounted for 7.5 percent of the total, which was a jump from just 2.5 percent in 2019.

It was reported that the cloud kitchen market is gearing up for unprecedented growth in Southeast Asia because of high demand and cost-effectiveness. Some critical factors in this growing segment include the increased use of smartphone users, internet penetration and a cashless economy.

The difference between a cloud kitchen and a regularly operating restaurant with delivery is that the front-of-house aspects are eliminated, which means customers only communicate with the administration and kitchen. In a cloud kitchen setting, the staff receives an order through an online ordering system, such as DoorDash or their own online system. The kitchen then prepares the food and a delivery team gets it to the customer.

In 2021, Wendy’s will have 50 delivery kitchens open and plans to launch the remainder by 2025.