November 15, 2019 / 6:40 PM / 2 months ago

UPDATE 1-U.S. restaurants remove dining rooms to speed off-site food frenzy

 (Adds investor and IPO detail for Chopt)
    By Hilary Russ
    NEW YORK, Nov 15 (Reuters) - Restaurants are doing away with
dining rooms as consumers increasingly order food deliveries
through apps such as Uber Technologies Inc's          Uber Eats
and GrubHub Inc         .
    The newest Chopt Creative Salad Co location, which opened
Tuesday in New York, is unlike any of the chain's other 61
sites. It has no cash registers or tables for customers.
    Atlanta-based Chick-fil-A Inc has similar sites in Nashville
and Louisville, where customers order and prepay online with the
option for delivery or pickup.
    Chick-fil-A is also trying something different, opening
three pilot "delivery kitchens" this year - in Chicago, Los
Angeles and near San Francisco. The latter is run by delivery
platform DoorDash Inc.
    At those sites, the chicken chain shares kitchens with other
restaurants to prepare food for delivery only.
    Off-premise digital orders are a major growth area for
fast-food and fast-casual chains. More are turning to these
so-called dark, virtual or ghost kitchens, which can also save
labor and real estate costs.
    Wendy's Co         said during its Oct. 11 investor day it
aimed to open two "dark kitchens" by year's end in high-delivery
markets. Its franchisee in the Dominican Republic opened one
there last month.
    A Wendy's spokeswoman said she could not yet disclose
locations for its next dark kitchens.
    Some delivery-only locations by startups, independents and
celebrity chefs in New York and San Francisco have flopped in
recent years.
    But in January, Uber co-founder Travis Kalanick's
CloudKitchens got a $400 million investment from Saudi Arabia's
sovereign wealth fund, according to a source familiar with the
matter. The Wall Street Journal first reported the investment
last week.
    CloudKitchens, founded in 2016 and based in Los Angeles,
builds shared kitchens for delivery-only restaurants to rent. It
did not respond to a request for comment.
    At the new Chopt location in New York, shelves hold salads
ready for pick up, while delivery workers shuttle other orders
through the front door. Greeters inside help customers place
    In the kitchen, a central prep table stocked with
ingredients is flanked by a row of employees on each side who
assemble orders.     
    Privately held Chopt offered pick-up and delivery orders
soon after it opened 18 years ago, but today, those orders make
up nearly half of its business at larger locations, said Chief
Marketing Officer Julie Atkinson.
    "We are sensing a really huge customer need for speed, for
convenience," she said. "We're hopeful that this concept really
raises the bar on customer convenience."
    Connecticut-based private equity firm L Catterton and
consumer company The Hain Celestial Group Inc          invested
an undisclosed amount of money in Chopt in 2015.
    GrowthPoint Restaurants, a fund raised by Chopt CEO Nick
Marsh, is Chopt's original outside investor. 
    An initial public offering is "an absolute possibility"
though not the only course to finance growth, Marsh said.
    On Nov. 5, Starbucks Corp          opened its first
Starbucks Pickup location in the United States for online
orders. The midtown Manhattan location is similar to some new
Starbucks stores in China, where digital ordering and delivery
is more common.

 (Reporting by Hilary RussAdditional reporting by Alexander
Cornwell in Dubai and Roselle Chen in New York; Editing by
Richard Chang and Cynthia Osterman)
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