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How Reef Technology became a major disruptor

In 2019, Reef Technology – formerly known as ParkJockey – was a parking garage company providing a digital paper ticket solution for parking customers in 5,000 parking lots and garages across North America. Two years later, Reef has grown to become one of the most iconic names in ghost kitchen technology.

Since Reef started its virtual restaurant branch Reef Kitchens at the end of 2019, ghost kitchens have evolved from a technological curiosity to a mainstay of the restaurant industry and a more cost-effective way to create and expand brands without the financial ties of a physical presence.

Although there are several virtual restaurant companies contributing to the massive growth of delivery restaurants, Reef has grown to become one of the top names in the industry, using its extensive network of parking lots and garages to quickly expand a fleet of over 5,000 ghost kitchens “Ships” in the nooks and crannies of the big cities.

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Reef started working with Milk Bar in August.

In the last quarter alone, Reef announced partnerships with six restaurant brands: Milk Bar and Wendy’s in August, 800 degree fast-casual pizza chain and Bennigan is in September, and From the taco and TGI on Fridays in October.

With Wendy’s partnership, Reef will help open up to 700 delivery restaurants in the US, Canada and the UK over the next five years, with 50 virtual restaurants expected to open before the end of the year, Wendy’s CEO Todd Penegor told investors in August that the quick service chain is “still at the very beginning of the non-traditional development journey”.

800 Degrees is meanwhile using a new Reef-operated ghost kitchen network and automated pizza kiosks from Piestro to expand its reach to 500 delivery locations. As it is harder to virtually reproduce Neapolitan pizzas from the wood-fired oven, crust and classic pizzas will be available through the ghost kitchen restaurants and robot kiosks, while the 800-degree brick-and-mortar restaurants stick with their pizzas that are out Wood stoves are made.

800_Grad.jpgMore recently, Reef’s partnership with TGI Fridays marks the first global casual dining brand in the technology company’s growing portfolio. The casual dining chain is poised to launch 300 virtual restaurants worldwide over the next five years – almost half of its existing portfolio of 700 restaurants. Roy Blanchette, CEO of TGI Fridays, described Reef as a “launch pad” for spreading the Fridays brand in underserved markets.

But with thousands of virtual restaurants slated to open under the Reef umbrella over the next few years, the question remains: How is it growing so fast?

“We don’t consider ourselves troublemakers,” Alan Philips, Reef’s chief creative officer, told Nation’s Restaurant News. “When we work with brands, we’re helping that brand do the best it can in this new world. … We have built a network of hundreds of ghost kitchens and hundreds of retail locations. I don’t know anyone who will be able to take over brands and bring them onto the platform and expand them in such a capital-efficient and neighborhood-oriented manner. “

One of the reasons Reef is growing so fast is its ability to operate in unorthodox locations. While many virtual restaurants operate exclusively from large kitchens or on the back of existing stationary locations, Reef’s ships are large kitchen trailers the size of shipping containers that are not tied to property boundaries. They are a mix of food trucks and traditional restaurant operating models.

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This unique model is not without its complications. Reef was recently tagged by the New York City Health Department when it was operating in the murky area between the restaurant and food truck / cart. Insider recently reported that Reef Technology temporarily suspended voluntarily all operations of his ship’s galleys. The company had operated its kitchens – which New York City does not have health permits – under temporary food truck permits while it was in the process of obtaining long-term health permits for its modular kitchens. Reef’s stationary locations are still operating in New York City.

“Reef Kitchens operates from fully licensed stationary locations in accordance with New York City regulations,” a Reef spokesperson told Nation’s Restaurant News. “We continue to work with regulators to enable our innovative model, which aims to reinvent urban spaces in ways that improve cities and neighborhoods with modular structures.”

Although Reef claimed the company stopped operating its modular kitchens before reprimanded the New York Department of Health, Insider has received a statement from the Department of Health suggesting otherwise.

“The Department of Health has determined that several facilities operating under the Reef Neighborhood Kitchen under DBA (Doing Business As) are in breach of numerous New York City health and safety requirements,” the New York Department of Health said in a statement, adding that the company “agreed to cease operations” to ensure city regulations were being followed. The Department of Health had not responded to the request for comment at press time.

There is only one Reef Kitchen location listed in the New York Department of Health’s restaurant inspections ratings. Umami Burger, operated by Reef Kitchen, is listed as “not yet rated” but has multiple violations of New York City health rules and regulations, including “food from an unapproved source” and “inadequate personal cleanliness” .

“Reef takes great pride in providing safe food in a clean environment,” the company said in a statement. “If you look at the total number of violations Reef received, we’re a negligible fraction of most of the major New York restaurants. Our commitment to high standards is clear. “

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Navigating local health authority regulations is not a new operational challenge for Reef. The virtual restaurant business typically works with city regulators to figure out how to bypass traditional licensing and licensing regulations that don’t take into account its unique operating structure. In fact, Reef has said that other cities like Miami have already started working on new regulations to make room for ghost kitchen vessels and mobile kitchens. In New York City (along with other markets), it was easier for the ghost kitchen company to enter the market with temporary vendor licenses (which are often less regulated than long-term licenses).

Reef expects the permits for its temporarily closed kitchen ships to be approved and the closed sites to be operational again by the end of the year pending delays related to COVID-19.

Despite these growing problems, Reef’s army of kitchen supervisors and mobile kitchens continues to grow rapidly. Referring to its portfolio as an “ecosystem of diversity” with space for different types of food service brands, Philips believes Reef is only just getting started.

“I see our platform as an opportunity for restaurateurs and brands to be as creative as possible,” he said. “We are only pioneers to make these dreams come true. … We can scale physical companies like digital companies – for example, move a brand from one location to 100 locations in less than a year. That is unheard of in the world of hospitality. “

What’s next? Although Philips would not disclose upcoming partnerships, he sees independent restaurants as just as critical to the future Reef ecosystem as larger restaurant chains aiming for more than 500 virtual locations. However, as the concept of virtual restaurants evolves, the definition of a virtual restaurant brand could change.

“Suppose you sit in the future and watch a Netflix show and you see John Favreau and Roy Choi baking a pizza on the screen and you click on your screen and then you will have that pizza in 30 minutes or less.” delivered from the Reef platform, ”he said. “As the market saturates, these skills will become real and the connection between the digital and physical restaurant worlds will be extraordinary.”

Contact Joanna Fantozzi at [email protected]

Follow her on Twitter: @JoannaFantozzi