American hot dog institution Nathan’s Famous (NASDAQ: NATH) is the latest restaurateur to jump into the ghost kitchen craze, inking a partnership deal with Ghost Kitchen Brands (GKB) to launch more than 100 locations across North America by the end of 2021.
Nathan’s, famous for its New York-style hot dogs, will open 60 nontraditional locations in the U.S. and 40 locations in Canada this year. According to a release announcing the deal, many of the new kitchens will be inside Walmart stores and will include seating. All locations will offer carryout and third-party delivery.
“We’re excited to continue our expansion across the U.S. and Canada, and this partnership with Ghost Kitchen Brands grows our footprint even more,” said James Walker, senior vice president of restaurants for Nathan’s. “We look forward to beginning this journey with GKB in their current kitchens and cities, with hopes of continued expansion over the coming years.”
Ghost Kitchen Brands will sell Nathan’s Famous menu as well as its recently launched Wings of New York virtual kitchen concept. Plans call for more than 150 locations to open by 2022.
“We are thrilled to partner with Nathan’s Famous, an iconic brand synonymous with American tradition and the flavor of New York,” said George Kottas, founder and CEO of Ghost Kitchen Brands. “As we continue to grow and reinvent the restaurant industry with our unique restaurant concept, we take pride in helping iconic brands scale to reach and serve more customers, allowing customizations and combinations with other brands, all in the convenience of one order.”
Statista valued the global ghost kitchen market at $43.1 billion in 2019, and the trend has accelerated since the COVID-19 pandemic. It represents about 40% of the global online food market with 1.34 billion food delivery users expected in 2021. It is estimated that by 2030, ghost kitchens will represent 50% of the drive-thru and takeaway food service market.
GKB signed a recent deal with fast-casual salad brand Saladworks to open more than 90 locations by the end of 2021, including many locations inside Walmart. A deal with REGO Restaurant Group, which operates Quiznos and Taco Del Mar brands, was made last fall as more than established brands work with ghost kitchen companies to expand their offerings through delivery-only models.
Ghost Kitchen Brands recently inked a deal with Walmart Canada to open ghost kitchens inside stores. That deal was set to see famous brands such as Quiznos, The Cheesecake Factory Bakery, Pepe’s Perogies, Rocky’s Italian, Canadian Jerk, Slush Puppie, Monster Cupcakes, Beyond Meat, Amaya Indian Street Food, Taco del Mar, Lola’s Latin Food, Tazo, Red Bull, Crêpe Delicious, Nescafé and Ben & Jerry’s open in select Walmart Canada locations.