Virtual restaurants – brands that operate exclusively on delivery platforms without real-world venues – have proven hugely successful in recent years, offering existing restaurants and takeaways a much-needed opportunity to boost revenue and reach new customers by offering alternative menus from their kitchens. But while the best virtual brands have quickly become fan favourites on platforms like Deliveroo, Just Eats and Uber Eats, the rest may be about to reach the end of the road.

On the 28th of March, Uber Eats announced a major clampdown on delivery-only brands on their platform, removing more than 5,000 virtual restaurants and implementing new quality guidelines in the process. On the surface, this might seem like a blow to a hospitality sector that in recent years has come to depend increasingly on delivery. Yet, in reality, it is a timely wake-up call to the importance of quality control and best practices.

While the news seems sudden, this change has been a long time coming. So, what is the difference between the virtual brands that have carved out their own place in the market and those facing the sack?

Ghosts in the machine

The brands that have been removed by Uber Eats embody the worst features of virtual restaurants – unoriginal concepts, low quality, repetitive items, even duplicated menus. Uber Eats told the Wall Street Journal that the ghost kitchen market on delivery apps had become like the “Wild West” and that they would declutter their platform by implementing new guidelines.

A major factor in their decision appears to have been so-called ‘ghost kitchens’, which are physical kitchen locations intended solely for preparing delivery-only menus. These ghost kitchens have earned a bad reputation in recent years, with reports emerging about cramped, windowless sheds in warehouses and car parks churning out orders at an industrial scale.

But this crackdown shines a light on the virtual brands that are doing things by the book – Peckwater Brands operates more than a dozen brands through hundreds of partner businesses across nine countries, but not one of those operations was affected by Uber Eats crackdown.

Getting virtual brands right

Most food service operations with kitchens will operate at less than full capacity, and operating a secondary virtual menu from the premises is a practical and useful means of boosting order volumes and revenues. But with customer expectations shifting and these new guidelines in place, picking the right virtual brand is vital.

Consistency and quality are the key traits of a winning virtual menu, while data-driven strategies and strong branding are the keys to a winning brand. This means building a menu of distinct and original dishes that customers will enjoy, and then ensuring these items are appealingly represented on delivery platforms and that the demand for these items is there.

By partnering with an approved provider, businesses can benefit from the huge demand for virtual menus without falling foul of delivery platforms.

The key takeaway

Hospitality brands should seek to avoid cluttering delivery platforms with half-baked, repetitive brands that don’t resonate with consumers. By working with trusted providers and using a data-focused approach to fills a gap in a local takeaway market, virtual brands can be the most valuable weapon in a business’ arsenal – and not the first menu on the firing line.

Sam Martin is the co-founder and CEO of Peckwater Brands (PWB), the delivery franchising experts. PWB helps restaurants and kitchens of all sizes benefit from the fullest demands of the market by streamlining the process of embracing virtual brands and multiple-franchise solutions. Working with partners across the hospitality spectrum, they can transform any kitchen into a multi-franchise operation, integrating with their existing operations and opening them up to vastly increased demand across different brands and cuisines. Sam worked in executive positions at Uber and Amazon before co-founding PWB in 2019.

About Peckwater Brands

Peckwater Brands (PWB) is a delivery franchising expert, helping restaurants and kitchens of all sizes benefit from the fullest demands of the market by streamlining the process of embracing virtual brands and multiple-franchise solutions. Working with partners across the hospitality spectrum, they can transform any kitchen into a multi-franchise operation, integrating with their existing operations and opening them up to vastly increased demand across different brands and cuisines.