A brand with a different goal
James Walker, SVP of Nathan’s Famous, recognized opportunity out of COVID as countless brands have. One of America’s oldest chains and most recognizable retail lines, started as a nickel hot dog stand in 1916 in Coney Island, New York, Nathan’s has ample equity to drop into any market in America and attract consumers.
And so the ghost kitchen rage came calling. Nathan’s has three main partners—Franklin Junction, REEF, and Kitopi. But the fastest-growing piece, Walker says, is the independent operator. Unlike the real estate wait-and-see game, though, this isn’t about flooding venues left behind. “We want to strengthen the independents, not take their spaces,” he says.
A few weeks ago, Nathan’s began actively recruiting for independent restaurant partners, blasting emails through industry publications and reaching out across its channels. The goal was to find operators with existing restaurants, primarily in metropolitan areas where Nathan’s already appreciates distribution. The brand asked for a base requirement in kitchen equipment from independents. But that’s not often a setback given its low-complexity menu.
Walker says the response out of the gate was robust, quantitatively and qualitatively. “… the phone is ringing. We’re getting emails. There’s a lot of interest in people just because of the strength of the brand name,” he says.
Interest has come from caterers, large sit-down restaurants, and everything in-between. How it works is Nathan’s ghost kitchen sets up shop inside the restaurant, with the independent’s personnel preparing and executing the menu. “And the revenue is theirs,” Walker says. “They pay us a commission off of the sales. And the entire program is designed to be very CapEx light.”
Truthfully, the investment is rather unique to the sector. If an independent already has the existing equipment, which most do, you’re talking far less than any franchise on the market. This makes sense considering it’s not positioned as a franchise. It’s more a utilization of an independent’s kitchen facility.
Yet here’s the real headliner: All in, operators are looking at $5,000 or less to get up and running, Walker says.
“That’s a number that gets people excited,” he notes.
It’s proving a mutual opportunity, too. It helps an independent pay their rent, lease, and other expenses. It keeps the lights on and offers kitchen crews and management targets to drive revenue, Walker says. In some situations, it simply gives independent restaurant employees something to do, period, in light of significantly depressed dine-in traffic. It helps restaurateurs keep staff on board.
“I really like this because I feel it’s good for everybody involved, include the customer,” Walker adds.
Since Walker joined Nathan’s from Subway last May, he’s spearheaded menu innovation centered on elevating three fresh pillars. Today, you have hots dogs and fries, New York Heroes, burgers and shakes, and a hand-battered chicken program. All of these were concepted from a New York state of mind, Walker says.
Or put another way, Nathan’s remained hyper vigilant that its brand promise was executed and executable at scale. So these activations were all designed to be easy operationally.
In turn, Nathan’s can launch ghost kitchens in a matter of weeks from initial contact, in some cases. Walker says more debut every week. “My goal would be to get a significant number launched by the end of this calendar year,” he says. “So what that number ultimately turns out to be, it would be hard for me to guesstimate, and we’re also trying to do this in a strategic fashion.”
Nathan’s wants its ghost kitchen models to endure long after COVID buzz fizzles.
“It’s a little bit more than just we get a call and we roll this out. We try to be really strategic and make sure this is good for Nathan’s as a brand, good for the independent, and good for ultimately the customer, which I think is what always matters most,” Walker says.