Wendy’s opens delivery-only kitchens in Canada to meet growing demand – .

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Wendy’s plans to open 700 delivery-only kitchens by 2025 to meet growing demand from people who want their fast food brought to them.

Wendy’s said kitchens will operate primarily in major cities in the United States, Canada and the United Kingdom, where the chain has fewer physical stores. The burger chain will open its first 50 delivery kitchens this year.

Wendy’s, based in Dublin, Ohio, partners with Reef Technology Inc., a Miami-based company that operates 5,000 delivery kitchens in 30 cities around the world.

In a conference call with investors on Wednesday, Wendy’s president and CEO Todd Penegor said Reef would build the locations and hire workers for the kitchens, each of whom is expected to make sales of $ 500,000 to $ 1 million per year. Wendy’s will receive royalties of approximately 6% of sales.

Wendy’s said third parties like DoorDash, Uber Eats and Grubhub will deliver the food.

The demand for delivery to restaurants was already increasing before the pandemic, but increased when restaurants closed their dining rooms last year. Delivery accounted for 3.3% of restaurant traffic in the United States in the year ending June 2019, according to NPD Group. That figure rose to 8.4% in the year ending June 2021.

Wendy’s said its digital sales – which include delivery and mobile orders for pickup – reached 7.5% of total sales in the second quarter of this year. This is up from 2.5% in 2019.

Wendy’s said it decided to expand its delivery kitchens with Reef after a successful test in Canada, where it opened eight kitchens late last year.

Wendy’s isn’t the first fast food chain to explore so-called ghost kitchens, which don’t have a storefront and only prepare food for delivery. In 2019, Chick-fil-A began offering delivery from a DoorDash Kitchen in Northern California.

Wendy’s shares rose 2% to $ 23.35 Thursday afternoon.

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