As social distancing orders forced restaurants to stop serving in their dining rooms, many transitioned to serving customers with take-out meals or delivery. Food delivery services like Grubhub, UberEats, and DoorDash have seen dramatic increases in customers and revenue. Although there has been some controversy about the high fees and commissions charged by the delivery services, with some cities putting a cap on fees, for many restaurants delivery has been a lifeline, allowing them to stay open and serving their regular customers.
However, for some restaurants, the appeal comes from the dine-in experience. That is, the ambience of the restaurant outweighs the quality of the food. For example, going to Chuck-E-Cheese is less about eating the pizza and wings than it is about playing the games, meeting the characters, and having a party. As a result, the transition to take-out and delivery has been particularly difficult for these types of restaurants. Given the option of having pizza delivered from any pizzeria in your town, very few would think to get delivery from Chuck-E-Cheese. Rather than simply shutting down, however, many restaurants have found a more creative solution: rebranding. While Chuck-E-Cheese pizza is not available for delivery, customers can now order pizza and wings from the new restaurant named Pasqually’s. A spokesperson for Chuck-E-Cheese has described Pasqually’s as a “delivery-only brand operating on its own, leveraging the operational infrastructure of Chuck E. Cheese kitchens across the nation.”
Chuck-E-Cheese is not the only national chain restaurant that is “sharing a kitchen” with delivery-only brands. Boston Market has been delivering under the name “Rotisserie Roast,” and Applebee’s has been delivering under the name “Neighborhood Wings.” Undoubtedly, with a little investigating, customers will discover other restaurants doing the same.
Discussion Questions:
- Think of the various costs associated with operating a restaurant. What are some of the considerations that owners face when deciding whether to stay open for take-out and delivery or to shut down until they can have dine-in service? Some restaurants have shortened their hours of operations (opening later and/or closing earlier) rather than shut down completely. Why might that be a good idea?
- Although some have claimed that these restaurants are trying to trick customers, it is not unusual for companies to have different brands operating at different quality levels. For example, luxury car brand Lexus is owned and operated by Toyota Motor Company. Discuss the similarities and/or differences between this and what the restaurants are doing.
Sources: Forbes “Potential Uber Eats-Grubhub Combo Would Surpass DoorDash To Create The Largest U.S. Food Delivery App” by Andria Cheng; Lansing State Journal “Couch: If you want to help local restaurants, don’t use delivery services like Grubhub or Uber Eats” by Graham Couch; Los Angeles Times “L.A. moves to cap fees charged by Uber Eats, Postmates and other food delivery services” by Emily Alpert Reyes; CNN “Some chain restaurants have turned to food delivery apps but they’re hidden behind different names” by Alicia Lee.