Mr. Beast just opened 300 restaurants practically overnight! If you don’t know who Mr. Beast is, he’s basically the Oprah of YouTube, having more than 75 million subscribers across all his platforms and giving away millions of dollars and prizes.
Now he’s actually paying people to eat his restaurant! That’s how crazy he is.
Today we’re going to unpack how this 22 year old YouTube star with zero culinary experience was able to build out 300 restaurants overnight. We’re going to be dissect it play by play so that you can learn a thing or two to help build your own profitable restaurant.
So how did this kid pull it off?
Like lots of celebrities and new restauranteurs alike, Mr. Beast leveraged the concept of Virtual Kitchens (AKA Cloud or Ghost Kitchens). I’ve been covering this concept for a couple years, but if you’re unfamiliar and want to learn more about Virtual Kitchens and their pros and cons, check out this video here.
Leveraging Virtual Dining Concepts
In this case, Mr. Beast partnered up with the company Virtual Dining Concepts (VDC). The business was created by Robert Earl, who is also the CEO of Planet Hollywood and creator of Hard Rock Cafe. VDC connects the three necessary pieces for a virtual kitchen: celebrities or influencers, a menu, and local operators.
First, VDC finds celebrities with large followings since they can easily create demand and interest. Next, they create the perfect menu that aligns with the influencers’ brand. Then they find local operators across the country with underutilized kitchens who are paying rent, but lack demand. After fulfillment, VDC connects these kitchens with delivery apps.
Having all of these systems in place allows them to pump out restaurants practically overnight. This business model worked perfectly creating a “win-win-win-win” situation:
- Mr. Beast was able to monetize and profit from his 75 million subscriber following.
- The existing local operators are able to make money by renting out their underutilized space and equipment.
- Delivery apps and drivers make money by servicing the kitchens
- And VDC is being paid for their services doing all the logistics and legwork to fulfill and connect the parties.
You can watch Mr. Beast’s video on his burger shop, here!
Another great example is when VDC partnered up with popular hip hop artist, Tyga. They created a brand called Tyga Bites, selling oven baked, boneless chicken wings.
Tyga has gone on record saying that he doesn’t like performing with an empty stomach, and always eats some chicken nuggets beforehand, thus creating an aligned brand. VDC then goes out across the country attracting restaurant operators to the turnkey, celebrity-backed, nationally marketed campaigns.
Quality Control An Obstacle
As good as this concept sounds, the only caveat is the lack of quality control. Ideally every burger and food item should taste the same across all locations, but this is a huge challenge when running a concept like this because there are so many different parties involved.
VDC basically only has a few different options to ensure consistency.
First is by using SOPs, which are basically manuals that get sent to the operators to use as a training guide for their staff. Unfortunately, every operator is different, some might be lazy, some may not read them, and some of the staff might not be following the protocols.
That’s the reason that they need operational management.
One way to do this is by sending secret shoppers out to ensure that the quality is maintained. Another option is to implement a star system to ensure that each operator maintains a certain standard of quality when creating the food.
It’s hard to say whether or not VDC is implementing these quality control measures, but this would be the ideal scenario. I predict that these concepts will evolve into a massive distribution center model in the next few years, but for the time being, we can just be expecting some crappy sandwiches.
Now that we understand VDC’s business model, what can you learn from their playbook?
- Virtual kitchens are here to stay and will continue to change the way we fulfill orders. It’s not mainstream yet, but will be within the next few years.
- Delivery apps and services are here to stay as well. Don’t complain about the platform’s 20-30% commissions, learn to adapt and leverage these apps for your business. If you don’t take advantage, your competitors will.
- Pay attention to this market space to future-proof your business. I know for a fact that McDonald’s is working on launching a hybrid business model utilizing virtual kitchens and delivery apps.
For more great resources on virtual kitchens, check out the dedicated section on my website, here.
And if you haven’t already done so, make sure you guys join our Virtual Kitchen Facebook Group, where we share the latest insights, strategies, and case studies to help you leverage the virtual kitchen model with your next food concept. Join here!