But again, there appears to be a lot more emphasis placed today on identifiable brand value. Virtual concepts can foster that over time by delivering a great experience, Walker says. Or they can arrive to the space with equity, and then consistently live up to it.
“I think it depends in how you look at them,” Walker says of the celebrity-backed brands. “You can certainly take a celebrity, I would say Wolfgang Puck is a celebrity, and Guy Fieri, but they’re celebrities who create great experiences that could be executed through this channel. I would think they have the ability to be around for quite a while, where some of the celebrity brands where there’s been less work that’s gone into truly building a brand, they look at least to me outside that they’re more of an LTO.”
There’s power in that celebrity attachment, as you’re seeing from George Lopez to MrBeast. Yet what it’s going to boil down to sounds a lot like the tenets of operating a traditional restaurant. “Are you putting the effort into making sure the brand delivers on a great experience, and your host kitchen partners are supports,” Walker says.
He floats a scenario. Walker is a huge Star Wars buff. If Luke Skywalker actor Mark Hamill came out with a virtual brand, Walker would be first in line to get it. “But if I don’t like it, or it’s just not an exciting or great or rewarding experience, I’m still probably going to enjoy the fact that I got to try it, but I’m not going to order it again,” Walker says. “These celebrity brands are absolutely going to get trial. I have no doubt about that. But whether they get repeat purchases, which is really what’s necessary for them to have any staying power, is about the effort that was put into creating that quality, service, and value experience.” Walker says Nathan’s spent ample resources on training and support materials. The goal being to take on as much of the work as possible so host kitchens could focus on execution.
“This is not as simple as you send recipes and let us know when you’re ready,” Walker says. “There is in-person training, there is virtual training, there’s feedback. And we’re really focused on making sure the customer’s experience is as good as it possibly can be.” Unlike some chains, Walker says, Nathan’s doesn’t look at its host kitchen business as a way to go out and test markets. Instead, it’s a vehicle to get into business easier, and quicker. For example, Nathan’s started executing ghost kitchens in a couple of Brazil markets, places where there was clear demand for the product. Virtual was the quickest path to meet it.
“And that is in no way designed to be a replacement for brick-and-mortar restaurants,” Walker says. “It’s just right now, we’re taking the opportunity to go in, address that love the consumer has for Nathan’s Famous, and do it in a way that we’re able to with what’s going on with COVID and that market. But it’s not in place of or instead of doing brick-and-mortar restaurants. We have every intention of building out that market.”
Nathan’s virtual brand, Wings of New York, was designed to live within the company’s overall brand architecture. Just like Nathan’s Famous, Wings of New York is innately New York (wings). The waffle component was added to layer a differentiator into arguably the most jam-packed virtual arena.
This past May, Wings of New York opened its first physical restaurant inside Yankee Stadium. It was clear to guests where it came from, with branding stating, “brought to you by Nathan’s Famous.”
“That was always the plan,” Walker says.
It’s spread virtually to the UAE and Malaysia, as well as domestically. There are roughly two dozen open and operating currently in three countries, soon to be five.
Arthur Treacher’s, the 1969-founded brand that once numbered more than 800 U.S. locations, was revived as a virtual concept by Nathan’s in late May. At this point, there were reportedly only two freestanding Arthur Treacher’s left—both in Ohio. There’s one virtual model presently operating with “many more in the pipeline to open” before the end of the fiscal calendar.
The concept cooked up a deal with Franklin Junction in June. As noted, Franklin Junction matches “Host Kitchens,” or existing restaurants with the capacity to add a variety of delivery-only menus, with established growth concepts. It can range everywhere from restaurants to hotels, C-stores, and non-traditional venues, like airports and sporting venues. Arthur Treacher’s fit the bill. However this unfolds, Walker says, the premise won’t change for Nathan’s. Every move, as quick as they’ve been, has been deliberate. He calls some of the current options in the market, “virtual brand mills.” Essentially, organizations trying to check boxes without actually creating a brand or thinking about experience.
“I do think there’s going to be winners and losers and I do think there will be a shakeout,” Walker says. “Quality, service, and value will always be important.”