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Nearly all food writers aspire to know about all the restaurants that exist in the city or region they cover. We might not be able to try them all because of time or caloric constraints, but should you, dear reader, ask if we’ve heard of a spot, the answer better be, “Yes.”
On one particularly hangry night during this pandemic, this food writer found herself scrolling through third-party delivery platforms and ogling all the options like a single person swiping right and left on dating apps.
With shock, I encountered restaurant after restaurant in my delivery radius in Ward 4 that I’d never covered, let alone recognized. Had I let you down? Some sounded like band names stoners came up with while having a munchies-fueled jam session in someone’s garage: Yeah Yeah Chicken, HaHa Wings, Burger Mansion, and Fry Me a River. I had to know more.
These restaurants don’t have websites, and you can’t find them on reservation sites such as OpenTable. Google doesn’t even return a physical address when you search for them. That’s because these businesses have never had tables and chairs, servers and bartenders, or printed menus in the first place.
Examining the fine print on Uber Eats revealed clues. Some listings said “Crafted by Mid-Atlantic Seafood (Takoma Park)” and others simply listed Mid-Atlantic Seafood’s address at 6500 New Hampshire Avenue. Not all apps are as forthcoming, at least on mobile. No address or information about Fry Me a River comes up when I look it up on DoorDash on my phone. Only on a desktop computer can I scroll down to the bottom of the restaurant’s listing to spot Mid-Atlantic Seafood’s address.
There are at least 25 “virtual restaurants” operating out of the small local chain’s Takoma Park location. Have you tried GastroPub, Nonstop Breakfast Club, Burger Land, or Caroline’s Country Fried Cafe? How about Big MaMa’s Seafood & Soul Food, Rainbow Smoothie, Just Wing It, On A Bun, or Giant Breakfast Burrito?
The restaurant’s general manager, Eric Song, explains that they’ve been experimenting with virtual restaurants for about two years. A virtual restaurant operates out of an existing licensed eatery’s kitchen using the same labor and equipment. Whether you order a cheeseburger from Mid-Atlantic Seafood or Burger Land, the food will taste the same and the money will land in Mid-Atlantic Seafood’s account.
Sometimes operators will test out entirely new cuisines if they’re thinking of opening another brick-and-mortar venture in the future. Virtual restaurants allow them to do so with little overhead costs or risks. Others will repackage their current menus using existing ingredients and dishes to reach new customers and boost revenue.
“We decided to reach more customers under different categories,” Song says. “Some people think we only carry seafood because of our name. But we have ribs, chicken, sandwiches, and salads.” Other patrons, Song says, don’t realize that Mid-Atlantic Seafood serves breakfast, so they rolled out at least five virtual breakfast restaurants. Employees say delivery drivers frequently arrive for pickups with confused looks on their faces.
It’s easy to conflate virtual restaurants with another buzzy term—ghost kitchens. The latter is a commissary facility that plays host to a number of food businesses which pay rent and other fees to prepare food for delivery or pick-up only. Companies such as Kitchen United, Reef Kitchens, and CloudKitchens have set up ghost kitchens across the country. Chick-Fil-A, The Halal Guys, and Dog Haus have all opened ghost kitchens with Kitchen United.
There are also grassroots ghost kitchens. In September, local restaurateur Aaron Gordon plans to open a “ghost food hall” where Town Hall once stood in Glover Park. It’ll feature everything from fried chicken from Chef Rock Harper to Tex-Mex from Chef Naomi Gallego. Gordon’s project deviates from the norm by having some seats for dining on the premises.
Third-party delivery companies don’t just encourage businesses to launch virtual restaurants—in some cases they facilitate their creation by providing data on consumer spending habits. “Virtual restaurants are often a result of direct engagement between Uber Eats and restaurant partners,” a company representative tells City Paper. Uber Eats even has an employee, Kristen Adamowski, dedicated to virtual restaurant development.
Restaurants can go to the Uber Eats website and sign up to have a 15-minute consultation on how to launch a virtual restaurant. “Our team can dive into the data to identify dishes and cuisines that customers are searching for in your area,” the Uber Eats website says. “If moonlighting as an empanada shop will help your bakery increase sales, we can let you know.”
Uber Eats confirms they worked with Mid-Atlantic Seafood on virtual restaurant development, but otherwise did not respond to City Paper’s requests for comment on specifics such as who comes up with the names of the virtual restaurants and what Uber Eats gets out of the arrangement, other than more money in commission fees when customers place orders. Mid-Atlantic Seafood’s virtual restaurants not only show up on Uber Eats, they’re also available on other platforms, including GrubHub and Postmates.
Song says Mid-Atlantic Seafood came up with the catchy names for its myriad virtual restaurants, but that may not be the case. A virtual restaurant called Caroline’s Country Fried Cafe operates in Tempe, Arizona, and Chicago is also home to a virtual restaurant dubbed Just Wing It. Of the 400,000 restaurants Uber Eats has on its platform worldwide, 7,000 are virtual restaurants. There are roughly 3,000 in the U.S. and Canada alone.
Virtual restaurants carry plusses and minuses. A DoorDash representative reiterates that it’s a great way for established brands to test a new cuisine to see if there’s local appetite for it. Adding brands can also help a restaurant dominate a food category. If I’m craving chicken fingers and type “fried chicken” into the search bar in a third-party app, all of Mid-Atlantic Seafood’s virtual restaurants with fried chicken on the menu will populate, increasing the likelihood of the restaurant making a sale.
Song says the strategy is working. “It’s pretty good,” he says. “It’s helping us. Right now is a difficult time in the pandemic. People are ordering delivery more.” He wouldn’t talk numbers, but a San Francisco restaurateur told the New York Times that after he introduced four virtual restaurants inside Top Round Roast Beef, his delivery sales went from being a quarter of his business to 75 percent.
On the surface, an increase in delivery sales may seem positive, but keep in mind that third-party delivery companies charge up to 30 percent commission on all orders. Some jurisdictions have passed delivery fee caps during the pandemic, but Montgomery County, where Mid-Atlantic Seafood is located, isn’t one of them.
Restaurants operate on slim profit margins and often report that they only break even on delivery orders. They sign on for the marketing and exposure or because loyal customers have pressed them to offer delivery and it would be too expensive to hire their own drivers. Even the delivery companies themselves largely haven’t figured out how to make money off of the model.
In addition to commission fees, virtual restaurants also suffer because they’re constrained to reaching customers within a certain delivery range. With an actual restaurant, people can travel from further away to pick up food to-go or to dine in. There is zero signage inside the Takoma Park Mid-Atlantic Seafood advertising its virtual restaurants or their menus.
Another issue is transparency. Even Chuck E. Cheese entered the virtual restaurant game when they quietly listed Pasqually’s Pizza & Wings on delivery platforms across the country in the spring. A customer in Philadelphia wasn’t pleased when she learned the pies she ordered actually came from a chain most frequently associated with children’s birthday parties. A delivery customer might think they were supporting a small, independent restaurant instead of a chain whose parent company filed for bankruptcy in June.
Virtual restaurants and ghost kitchens aren’t new. The New York Times reports that delivery-only establishments in America date back to at least 2013, when a startup began work on a ghost kitchen in New York. But they’re becoming increasingly popular, according to a DoorDash representative. The company tells City Paper virtual restaurants have been proliferating, especially during the COVID-19 pandemic.
Many Washingtonians remain uncomfortable with the idea of dining out. They fear contracting or transmitting the virus and may have concerns about whether the servers and bartenders taking care of them are just as afraid. Delivery allows customers to support their favorite restaurants from a safer distance.
We’re also more married to our immediate neighborhoods than ever before. People are rediscovering the eateries nearest to their homes because it’s easy to swing by to pick up dinner to-go or place a delivery order that doesn’t require a driver to travel too far. Virtual restaurants offer these restaurants a chance to shake things up and present their food in new ways to a captive audience that may not know what’s happening behind the scenes.