Fuku’s National Expansion Plans Could Hinge on Ghost Kitchens

April 16, 2020 Admin 0 Comments

David Chang’s fast-casual chicken spot teams with Reef Kitchens to sling sandwiches in Portland, Miami, and Brooklyn

In March 2015, culinary celebrity and media mogul David Chang stood on a stage at Austin’s SXSW festival and announced his new fried chicken restaurant, Fuku. “We’re going to try to make the best fried chicken sandwich possible, and work with smartest people out there to make the best tech stuff for it,” he said. He wanted the fried chicken sandwich shop to feel experimental and high-tech, and likely dependent on mobile apps. The goal was always to grow: Starting in the former Momofuku Ko space in the East Village, Chang would test out the brand, exploding the company into a chain spread across several cities.

The fast-casual option from David Chang was his first move into the easily scalable, more-casual dining model exemplified by Danny Meyer’s Shake Shack. And five years later, Fuku has locations across the country, with gleaming brick and mortar restaurants in Boston and Los Angeles, concessions stands in sports arenas, and a location coming to Rockefeller Center. When Fuku comes to a city, it usually arrives with at least a little fanfare: Eater Boston knew about the impending arrival months in advance, and Eater LA showed off its stall within the SocialEats food hall in Santa Monica on the day it opened its doors.

Last week, however, Portland’s online-trawling masses started noticing Fuku on delivery apps sourced from different locations around town — generally parking lots and food cart pods. It was surprising, considering the fact that no real announcement of a Portland-area Fuku had been made; the company was officially in six cities and Washington D.C. according to its website, where there was no mention of a Portland location.

Instead, Fuku’s (very real) Portland presence is as the result of a three-month contract with Reef Kitchens, a branch of the larger Reef Technology brand, which runs delivery-centric ghost kitchens across the country. And the delivery-only growth plan is an unexpected one: David Chang’s fried chicken sandwich chain is the most prominent brand to actively pursue the delivery-only model as a way to expand nationwide. It follows the Momofuku brand’s previous two unsuccessful attempts at getting into delivery: Maple, the meal delivery start-up that counted Chang as an investor, ceased operations after two years, while Ando, a delivery-only restaurant under the Momofuku brand, stopped serving food after just under two years of operation.

“I imagine there are a few people in Portland, New York, or Miami who might be unfamiliar with David Chang or have never seen a Fuku chicken sandwich,” Reef spokesperson Padden Murphy says, noting other cities where Fuku will be available delivery-first. “To be able to bring that to people is huge.”

The choice to debut the partnership in Portland is especially significant. In Miami and New York, Fuku has some sort of presence, even if it’s just in stadiums. In Portland, delivery-only Fuku is the city’s introduction to the Momofuku brand, and under circumstances that deviate from traditional expansion methods. Instead of testing the market slowly, doing on-the-ground beta testing, quality control, and promotion, Fuku is sending refrigerated trucks full of commissary-made sauces and chicken cutlets to trailer-based kitchens, trusting Reef employees to make a Fuku sandwich based off of training videos and recipe cards.

In all of the planned delivery cities for the three-month test run, Fuku’s commissary will send pre-butchered, brined, and dredged chicken, fries, and sauces out on refrigerated trucks to Reef Kitchen locations. Then, employees at the kitchens will assemble orders locally and send them out for delivery. If the launch in Portland, Brooklyn, and Miami is successful, the company would commit to scaling upward or sticking to a delivery-only model in cities with existing brick and mortars.

Alex Munoz-Suarez, the CEO of Fuku, played with the idea of delivery-only, cloud-kitchen-style service in other cities, but he was trying to be methodical about it. “Over the last six months, as restaurateurs — especially as restaurateurs in the fast-casual space — we’ve seen rapid growth in off-premise business; I’m talking about lunch delivery orders, and/or pickup orders,” he says.

For Munoz-Suarez, it makes more sense to partner with a company like Reef as an inroad to a new-city expansion. “The planning it takes to learn a city, find a site, secure a space, secure the funding, build the space, all of that — our partner Reef has done for us. Obviously it’s delivery only, but the beauty of what they’re doing [is that] they have the ability to move a vessel,” he says, referring to what Reef calls the physical space of its ghost kitchen. “You have little to no flexibility going the previous route. Portland is a city I know a little bit, but chatting with local real estate people, that takes a lot of time.”

If Fuku seeks to expand without the hassle of building brick and mortar locations, Reef is an expected partner: It operates about 5,000 parking lots and parking garages across North America, and spokesperson Padden Murphy says that developing ghost kitchens in these spaces reinvigorates the property and gives it separate uses. “Something like 50 to 60 percent of all downtowns are all dedicated to cars, parking, on street off street,” Murphy says. “Our entire view of urban renewal, we’ve built our cities around cars, but in doing that, we built this essential infrastructure that we can re-imagine.”

Connecting with larger brands isn’t totally out of Reef’s wheelhouse, either; the company’s other big win was a partnership with Rachael Ray, with menus designed by the celebrity chef delivered in cities like Chattanooga, Tennessee and Dallas. Similarly to Fuku, the partnership was a short-term model, running through the end of 2019. However, according to Murphy, Reef may start using the company’s “vessels” to help tap local talent and help them grow their businesses. “It’s also important for us to figure out who is the next David Chang in Portland — how do we make accessible the ability to scale? We believe that this is a trend that is early, that will become normalized.” For now, however, more people can try Fuku than ever before, even if they can’t walk into an actual restaurant.

Disclosure: David Chang is producing shows for Hulu in partnership with Vox Media Studios, part of Eater’s parent company, Vox Media. No Eater staff member is involved in the production of those shows, and this does not impact coverage on Eater.