Since launching its flagship store in Pasadena, CA in 2010, Dog Haus has opened 38 additional locations in 18 states across the country. Billing itself as a “craft casual” concept, the chain is known for its gourmet takes on hot dogs, sausages, and burgers. Their recipe for success revolves around high-quality ingredients, a chef-driven menu, and their commitment to community.
In 2020, the Dog Haus team launched The Absolute Brands, a new restaurant group comprised of the original hot dog brand as well as eight new concepts. Each of these new restaurants operates out of a virtual kitchen space and uses a delivery-only model.
At the end of last year, we had the opportunity to have a conversation with Dog Haus & The Absolute Brands co-founder Hagop Giragossian on the topic of ghost kitchens and virtual brands.
What prompted you to switch to or adopt the ghost kitchen/virtual concept model?
We added ghost kitchens as an option for new and existing franchisees. Now more than ever, the trend towards off-site dining experiences via delivery and pickup is changing the entire restaurant industry. Fortunately, the Dog Haus team was ahead of the curve, opening our first location in Spring of 2019. The current crisis has made third party delivery a crucial component to the restaurant industry and we’re constantly looking for new ways it allows people to experience our food and brand.
We have partnered with Kitchen United and CloudKitchens to rapidly expand our presence in the ghost kitchen space. With COVID, our timeline has accelerated—we’re working hard to open as many ghost kitchens as possible in the coming months and will continue to open traditional Dog Haus and Biergarten locations.
What were your expectations ahead of adoption? Did you have any qualms or reservations about it?
A big aspect we had to consider was the overall experience. Dog Haus is known for providing a unique in-person experience with bartenders and staff that are friendly and down-to-earth. How can you provide that same customer service through a bag? We knew we would undoubtedly encounter needs for operational changes, but we could only anticipate the changes to come, not what those obstacles—or opportunities—would be.
Can you tell us specifically what you’ve done? Number of kitchens, number of staff, type of staff, new brands created specifically under the ghost kitchen model, etc.
We’re currently in six ghost kitchen facilities—one in Austin, two in Chicago, one in Pasadena, and two in Los Angeles (Hollywood and Koreatown).
Earlier this year, we launched The Absolute Brands—a restaurant group comprised of Dog Haus and additional unique brands. Each new brand offers delicious new items that are off-shoots of Dog Haus’ signature menu. Originally, we had planned to have The Absolute Brands available in our ghost kitchens only, but due to COVID, we decided to give our franchisees the option to offer them out of their brick & mortar locations.
Most took the opportunity and are now seeing outstanding results. The Absolute Brands have been an amazing resource during this difficult time. We’re seeing franchisees make record breaking sales—even compared to before COVID. Within a ghost kitchen space, we only need a couple kitchen crew members on at a time as the facilities provide front-of-house staff for order handoff.
How much success have you seen with your ghost kitchens?
We’re extremely happy with the performance of our ghost kitchens. We see really strong long-term opportunities and view our partnerships with Kitchen United and CloudKitchens as not only an enormous growth opportunity for the brand, but as a way for us to stay on top of the off-premise dining experience.
What’s the biggest difference between running a restaurant with in-person service and running one based on the ghost kitchen model?
Ghost kitchens provide a one-of-a-kind opportunity for Dog Haus to bring its unique chef-driven menu to current and future Dog Haus fanatics in one fell swoop, while also paving the way for Dog Haus to expand its franchising reach in each of these new markets beyond the virtual kitchen sites. Executing changes in a traditional restaurant takes time, but the speed at which changes can be implemented in a ghost kitchen makes operating one so compelling.
Because ghost kitchens serve customers digitally, we not only have the flexibility to change menus instantly, but also to launch digital-only promotions at a moment’s notice, ensuring customers experience The Absolute Würst in the best possible way. We believe a mix of traditional Dog Haus’, smaller footprint locations, Biergartens and virtual kitchens is the best approach to maximizing a market.
Did you encounter any unexpected challenges or situations?
There is a lot of risk and upfront cost when someone builds a brick-and-mortar restaurant. Typically, you have to sign a multi-year lease, hire a full front and back-of-house team, invest money into construction, etc.
What’s great about some ghost kitchens is that they absorb the opening risk because they’re handling construction and equipment costs. As a tenant, you can just jump in with your food and staff and start selling. Ghost kitchens create an amazing opportunity to move fast into a market, with low upfront cost, in areas that may be cost prohibitive.
In eliminating several costs that come with a traditional brick-and-mortar, it creates a larger budget for third party delivery fees. One of the other challenges with ghost kitchens as a model is the lack of pickup options. Kitchen United has actually solved that problem with the introduction of Kitchen United Mix, which is its own online ordering platform for pickup or delivery. They also have kiosks on-site for in-person ordering.
Have you received any feedback from your customers on the new model?
Customers are big fans of the ghost kitchen set up! Delivery and pick up are booming right now and with the ghost kitchen model, it’s even easier for our customers to get their favorites delivered right to their door. Convenience and safety are key right now—and will certainly remain top priorities for months or even years to come —and ghost kitchens are a great resource for nailing both of those aspects.
What do you expect to happen to the ghost kitchen model after the worst of the pandemic passes? Do you think this will become a permanent part of your business, or a permanent part of the restaurant industry in general? Why or why not?
The concept of dine-in restaurants will never completely go away—families and friends crave moments of gathering together for a delicious meal in a welcoming environment. But takeout and delivery are a great way to enjoy your favorite restaurants wherever you may be. Restaurant brands are absolutely exploring every way possible of getting their food into their consumer’s hands and this will lead to great success for ghost kitchens.
It’s incredibly likely we’ll continue to see brands make the jump to ghost kitchens even after COVID. If anything, this pandemic has shown us how to prepare for the unimaginable and those that lacked takeout or delivery capabilities previously will not be left in the dark should we ever face such a crisis in the future. Plus, guests are quickly getting used to picking up meals to enjoy in the comfort and safety of their own homes. This trend is only going to grow as dine-in traffic will be slow to return.
As for Dog Haus, we have seen amazing things come out of our partnerships with ghost kitchen facilities, even before COVID. We plan to stay on the trajectory and continue our expansion in the ghost kitchen space for many years to come.
Do you have any advice for brands just starting to make their foray into this model?
For a restaurant to succeed in a virtual kitchen, it needs to ensure it’s prepared for delivery and has established strong partnerships with 3rd party delivery providers. A restaurant opening a virtual kitchen should also be prepared to reach audiences through non-traditional marketing channels, especially digital and social.
Restaurants with a limited digital presence may not be a fit. It’s also important to be mindful of the markets you’re entering, making sure you do the proper research that should come with any traditional restaurant launch. It’s essential to understand your current business and ensure that the demand and brand recognition is there for expansion and delivery through an off-site location.