Wow Bao announced that it’s launching an off-premises platform that allows other restaurants to serve its product through third-party delivery. The resale agreement with other operators includes frozen product and a few pieces of equipment, and essentially turns other restaurant kitchens into ghost kitchens serving Wow Bao.
The new platform has been in development for months, but now allows Wow Bao to expand via contactless delivery in new markets—one of the few service methods available in most of the country as dining rooms shut down due to the coronavirus outbreak.
“We saw this as an opportunity to help restaurants that sit on the breakeven threshold, and could assist them in gaining topline sales and strong bottom lines,” says Wow Bao president Geoff Alexander. “With the rise in delivery due to COVID-19, we are prepared to help restaurants now more than ever.”
The first new market for Wow Bao using this ghost-kitchen strategy is San Francisco, where Wow Bao delivery came online Thursday via Caviar, DoorDash, GrubHub, Postmates, and Uber Eats. Diners there can now order steamed bao in a variety of flavors (Teriyaki Chicken, BBQ Berkshire Pork, Spicy Mongolian Beef, and Whole Wheat Vegetable), as well as pan-seared potstickers (Ginger Chicken or Green Vegetable) and rice bowls (Teriyaki Chicken, Spicy Kung Pao Chicken, or Orange Chicken).
With just a few pieces of equipment—and frozen products distributed nationally—just about any store can start selling Wow Bao buns out the back door to third-party delivery drivers, Alexander says.
“We believe that any kitchen can be a dark or ghost kitchen,” he says.
While other limited-service operators have expanded their menu offerings and created virtual brands to garner more exposure on digital marketplaces like third-party delivery, Alexander thinks his brand’s strategy is more sound for the long-run because there are no brand or operational changes necessary to serving the product—just a small amount of real estate in a kitchen and one employee to oversee product prep.
With no need for a hood, even a doughnut or ice cream shop could dabble in the Asian concept.
While it’s operationally a breeze—partners need only to steam the frozen product and package it—some were hesitant about the marketing required to introduce a new brand. So the chain worked with third-party apps to secure top rankings upon rollout and invested in targeted social media advertising.
Operators need only invest about $2,000 to participate. That cost includes onboarding, training videos and reference manuals, supply chain assistance, third-party assets, four pieces of equipment, and opening a packaging order. If the partner already has the equipment, the initial cost is much lower.
Wow Bao lets its partners set prices. In no time, a pizza or burger joint could diversify its business—and add new incremental revenues. The company believes correctly operated units should produce margins of 30–40%. “Our goal is for operators to do $2,000 a week in sales ($100,000 annually) and bring a significant amount of that to the bottom line,” Alexander says.
“If you have a restaurant and you can make another $75,000 or $100,000 on the top line, you just paid for a manager,” he adds. “It’s a game changer we think we’ve created.”
The new platform went through a 6-week pilot in Schaumburg, Illinois, with Lettuce Entertain You’s Shaw’s Crab House. It will launch with another partner, REEF Kitchens, to Miami, Austin, Los Angeles, Minneapolis, and Portland in the coming weeks.
For more on the off-premises strategy, stream the podcast above and skip to 1:08:00.
—with reporting from Kevin Hardy and Sam Oches