Restaurant owner Jon Goci was contemplating hiring another back-of-house employee for the kitchen to help during the dinner rush at his Wayne business, US 12 Bar & Grill.
Goci said he wasn’t sure he could afford to offer someone enough hours, until he connected with Catapult Concepts. In addition to serving pub grub to their in-house customers, now the kitchen at US 12 also makes food for two of Catapult’s digital-only restaurant brands, Cheesesteak Daddy and Pop’s Meatball Sandwich.
“I’m going to say my food sales are up about 30 to 40%. It’s been really amazing,” said Goci, adding that he was able to hire that extra employee because of the increase in orders from the digital brands.
Anyone even peripherally following the restaurant industry has noticed the uptick in “ghost kitchens” or “cloud kitchens.”
Many of them are corporately owned virtual brands, operating from the kitchens of other corporately owned brands, with some exceptions. Ghost kitchens were a billion dollar industry globally in 2019, and the pandemic only accelerated the demand.
Michigan restaurateur Jake Schostak sees this as the future for the restaurant industry. He developed this new platform to make use of independently owned kitchens throughout the area. They can execute menus from his virtual brands to make it a win-win for both sides.
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Schostak’s family owns Team Schostak Family Restaurants, which owns several “legacy brands” in Michigan like Applebee’s and Wendy’s as well as more modern, fast-casual concepts like Del Taco and MOD Pizza. Schostak himself has also worked in Chicago and Washington, D.C., developing other fast-casual brands.
“I really have a wide range of perspectives in the restaurant business,” he said. “One of the tactics that I think is so important for all restaurants to adapt is the concept of building your online brands, digital sales and your delivery business through virtual, delivery-only restaurant concepts.”
It’s a trend that was picking up already among chain restaurants, but there was nobody helping independent restaurant operators get a digital brand off the ground, he said.
“I really saw an important need to provide that service to independent restaurant groups and independent restaurant owners,” he said.
The restaurant works with Schostak and his team to choose from one of their virtual brands. Catapult provides the branding, menu, “station ready” food and supplies, staff training, marketing and advertising. The restaurant, in turn, fulfills orders during the agreed upon hours and hands them off to third-party delivery drivers (Uber Eats, DoorDash, Grubhub, etc.).
Schostak says the kitchen operators take 60% of the topline sales, but they own the food costs, which are about 30-35% depending on the concept.
“They’re making about 25% of every dollar that they take in,” said Schostak. “Which is very compelling in the restaurant business.”
US 12 Bar & Grill has been in Goci’s family since 1979, and before that was known as the Rock ‘n’ Roll Farm where many famous musicians performed, including Bob Seger. Goci said US 12 also hosted live music up until the pandemic.
Today, US 12 is one of five independent restaurants currently signed up with Catapult to service digital brands Cheesesteak Daddy and Pop’s Meatball Sandwiches. A third concept for fried chicken sandwiches is being tweaked right now, and more digital brands are on the way.
“They’re very supportive and their training is really good and it does really help that they’re so hands-on to get us up and running. They came in and trained the staff, they order all the food, they always make sure we’re fully stocked and trained,” said Goci. “I’m pleasantly surprised.”
He said US 12 isn’t a high-volume kitchen, normally, but with Catapult’s virtual brands jumping on board, he’s making enough extra money to justify the salary of that additional team member.
“My employees like it because the food is easy to make and they get more hours,” he said.
For consumers, Schostak says this gives them more options for delivery during more hours and a lot of the revenue is staying within their local community.