NYC Delivery Restaurant Zuul Kitchens Is Opening in Soho in Manhattan - Eater NY

A new “ghost kitchen” in Soho will soon be home to popular New York City restaurants such as salad sensation Sweetgreen.

Zuul Kitchens, launching in September in the former building of failed delivery-only concept Maple, is offering space to multiple restaurants as a home base exclusively for deliveries. Located at 30 Vandam St. in Soho, the kitchen will be home to companies such as salad chain Sweetgreen, Chinese-American fast-casual spot Junzi, and Jewish deli Sarge’s, with a delivery radius of 1.25 miles in lower Manhattan.

Nine separate kitchens will be in the 5,000-square-foot space, with some brands buying multiple units. Fast-casual Lebanese chain Naya, farm-to-table pizza joint Stone Bridge Pizza & Salad, and grab-and-go salad and bowl spot Positive Foods will also be in the space.

Zuul is calling itself a ghost kitchen, which means that the building will be solely dedicated to fulfilling delivery orders. It won’t be open to the public, though a pick-up window may be added at future locations. It’s not the same as Uber Eats’ virtual kitchen setup, where restaurants can launch new concepts online, though that’s also called a ghost kitchen. At Zuul, every restaurant will use its regular menu and pricing.

The company is one of several well-financed startups to get into the business of ghost kitchens. Disgraced Uber founder Travis Kalanick has Cloud Kitchens, based in Los Angeles, while Google Ventures-backed Kitchen United currently operates two locations in Chicago and Pasadena, California, and has outlined plans to open up around 400 locations over the next five years.

A Sarge’s pastrami sandwich

Robert Sietsema/Eater

New York City hasn’t been an easy market to crack, though: Many previous “delivery only” concepts here have failed, including Maple, Ando, and Green Summit Group. But in each of those cases, the ghost kitchen was producing its own food. At Zuul — named after that ghost in Ghostbusters that hung out in Sigourney Weaver’s fridge — the founders are betting that they’ll find success if they let the restaurants make their own food while Zuul takes care of everything else, from negotiating the building lease and getting the gas turned on to directing delivery courier traffic and washing the dishes.

Zuul co-founders Corey Manicone and Sean Fitzgibbons are aiming to complete deliveries in an ambitious 15 minutes or less, from the time the order is placed to the time it’s delivered. “We’re breaking the sound barrier,” Fitzgibbons joked.

To do that, each restaurant’s kitchen has to be designed and staffed so that orders can be pumped out in minutes. Then, runners shuttle food to the building’s delivery dispatch area. Zuul does not employ delivery couriers; instead, restaurants use third-party services like Grubhub, Uber Eats, and DoorDash. Like an Uber driver, a delivery courier can accept or reject any job that Grubhub or Seamless might send their way, so in an effort to persuade the couriers to frequently accept delivery jobs from Zuul’s restaurants, the space has unlimited access to a 32-port phone charging station, seating, and a steady flow of coffee, tea, and water.

In return, each restaurant pays for its own kitchen equipment, a monthly membership fee, and some pay a percentage per delivery order fee. Zuul declined to share further details about the financial set-up.

For the restaurateurs, it’s a lower-risk opportunity to expand while demand for delivery is high, they say. Sarge’s currently sees 40 to 50 percent of its sales come from takeout and delivery, and those orders are also more costly to produce than in-restaurant meals because of skyrocketing commission fees from third-party delivery services.

In a ghost kitchen, those fees still apply, but in theory, the operation is so streamlined that they can handle a much higher volume of orders at a quicker rate, generating better profit margins than with delivery orders in a regular restaurant.

Kunning Huang for Junzi Kitchen [Official Photo]

Plus, a separate delivery-only kitchen means staff isn’t pulled away for dine-in clientele. At Naya, where roughly 40 percent of sales come from delivery, founder Hady Kfoury periodically has to delist the restaurants from Grubhub and Seamless during peak hours because the team can’t handle the influx of delivery orders on top of the walk-in customers. Kfoury expects Naya’s ghost kitchen to generate between 15 to 25 percent profit margins, in line with Naya’s six other restaurants.

And Sarge’s, which is in Murray Hill, has demand for deliveries below 14th Street but has had difficulty fulfilling them due to fear that quality would decline with travel time. Owner Andrew Wengrover and his father-in-law Steve Thall jumped at the chance to go downtown and raised $400,000 to set up at Zuul.

Zuul is currently exploring opening a few more locations in New York City and will look at new cities after that, which will hopefully give its restaurant partners an opportunity to expand with less risk, similar to opening up a pop-up shop to gauge demand.

Manicone and Fitzgibbons are also working toward leveraging the heft of having Sweetgreen, Junzi, Sarge’s, and others in the same building, from potentially negotiating preferred rates from third-party delivery services to launching a “Zuul Menu” that will include the option to assemble a meal from multiple restaurants. All of the restaurants in Zuul’s first location asked for the right to first dibs on kitchen space in new locations.

None of the four restaurateurs who spoke to Eater envision a future in which they only operate ghost kitchens, but this new operational model is far more feasible for meeting delivery demands versus trying to juggle it at their standalone restaurants, they say.

“I’m not going to completely forgo the idea of dining,” says Enrique Mendez, a co-founder of Stone Bridge. “But it does no good for anyone if we only stick with the dining room and we fail not only ourselves, but our employees and our customers who want our food.”

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https://ny.eater.com/2019/8/26/20833153/zuul-kitchens-opening-sweetgreen-junzi-sarges-soho-nyc

2019-08-26 14:42:00Z
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