Operations

Wow Bao rolling toward 1000 partner kitchens

Provided

January 26, 2021

Chicago-based Wow Bao's partner kitchen program launched last year is on track to have 1,000 locations by the end of 2021, according to CEO Geoff Alexander, who created the strategy as a second revenue stream for the brand to sell its line of buns, bowls, potstickers via other restaurant brands.

In early 2020, Wow Bao had six locations in and around Chicago, six in major airports and sold its product through grocery partners. The partner kitchen program, however, has increased access to consumers in 24 states and Washington, D.C., and by mid-year, Wow Bow will serve 160 cities in 36 states.

The brand has partnered with Franklin Junction, a digital marketplace connecting host kitchen operators with customers, to add another 50 locations through the Northeast and Mid-Atlantic this month, followed by a nationwide expansion of another 50 plus locations in the first half of 2021.

"Wow Bao is a perfect addition to our host kitchen portfolio,'' said Aziz Hashim, founder of Franklin Junction, an offshoot of NRD Capital, which owns Ruby Tuesday, Fuzzy's Taco Shop and Frisch's Big Boy and works with 500 restaurants. "Their off-premise model has been built to allow restaurant hosts to quickly launch and add to their sales and profits using prepared Wow Bao menu items that have minimal equipment requirements and low impact on host kitchen operations.''

Helping other brands
The surge is more than just a boon for Wow Bao as most of the partnerships help keep locally owned mom-and-pop restaurants in business, Alexander said.

"We didn't conceive this for the pandemic, but as soon as it started, we realized these partner kitchens were perfect for the critical situation restaurants are facing right now and will face for some time,'' he said in the release. "This is a lifeline that quite literally can mean the difference between profitability and extinction to restaurants.''

The cost
Any restaurant can join the Wow Bao program for less than $1,000. Most partners have been surpassing the expected sales mark of $2,500 or more in six weeks, Alexander said. The small amount of equipment needs no more than three square feet of space and has limited storage requirements. Owners of anything from restaurants to seasonal operations or catering companies can apply on the Wow Bao website.

The partner kitchens have had particular success in rural areas, home to about 40% of new locations, where food variety is more limited than in metropolitan areas, according to the release. And whether urban or rural, restaurants are learning to cope with more sales through delivery services such as Grubhub or DoorDash, which take a large bite out of profits. Wow Bao's program is designed to leave enough margin for restaurateurs to make money while using delivery services, Alexander said.

Food and packaging costs run about 36%, leaving room for profit even while using third-party delivery services to get the product to consumers, which account for another 25% of costs. That means operators maintain almost 40% of revenue, Alexander said.