Those who approached the rapid expansion of the ghost kitchen with some skepticism may be feeling vindicated this week, as Reef Technology, one of the major players in the space, comes under scrutiny from regulators.
Restaurant Dive reported on Thursday (Dec. 2) that in Florida, where the company is headquartered, the state’s Department of Business and Professional Regulation found health and safety violations at 58 of 61 locations inspected. Additionally, 21 of these kitchens had “high-level safety violations,” and two such locations were shut down by the regulators after sewage spilled onto the units’ floors, among other issues.
Reef did not immediately respond to a request to comment on these violations.
Also on Thursday, Insider reported that Reef “has been frequently cited” for running its ghost kitchens without the necessary permits, and consequently without the safety checks that come with these permits.
“To be clear, Reef understands the importance of permitting, and we want to be regulated,” a Reef spokesperson told the outlet in an email. “As we’ve stated previously, in all cases, we hold ourselves to the highest standards of food handling and safety training in all our kitchens. The health and safety of our employees and customers are Reef’s top priority.”
7-Eleven Takes a Tip from Domino’s with Nuro’s Autonomous Delivery
About a month after autonomous vehicle company Nuro announced a $600 million Series D funding round with participation from a range of businesses including Kroger and Google, 7-Eleven, the world’s largest convenience store chain, announced on Wednesday (Dec. 1) that it is partnering with the company for robotic deliveries in California.
The partnership is part of the convenience retailer’s 7NOW delivery business, which centers its fresh food offerings in its promotional messaging, putting the service in competition with quick-service restaurants (QSRs), though a limited selection of packaged foods is also available through the platform.
“Our first foray into autonomous delivery was in 2016, when 7-Eleven became the first retailer in the U.S. to make a drone delivery to a customer’s house,” 7-Eleven Chief Digital Officer Raghu Mahadevan said in a statement. “Fast-forward to 2021, and we are pushing the boundaries of innovation even further to provide customers with the first commercial autonomous delivery service in California. I can’t wait to see where we go from here.”
In March, major fast-casual brand Chipotle Mexican Grill announced its participation in the autonomous delivery company’s Series C funding round, and in April, leading international pizza chain Domino’s announced its trial of robotic delivery in partnership with Nuro in Houston.
For the autonomous vehicle company’s partnership with 7-Eleven, deliveries will take around a half-hour, and vehicles will be accompanied by a human operator, such that these early trials won’t do much to ameliorate the labor-related delivery challenges in the short term.
Shake Shack to Open Its First-Ever Drive-Thru
Fast-casual chain Shake Shack is moving into the QSR space with the opening of its first drive-thru location, the brand announced on Tuesday (Nov. 30). The restaurant, which is in a shopping center in Maple Grove, Minnesota, will open on Dec. 6.
“We’ve been envisioning drive-thru for some time now and have been working diligently to make the experience uniquely Shake Shack,” CEO Randy Garutti said in a statement. “We’ll be learning a lot from this location and will continue to optimize and adapt as we roll out more of these formats next year.”
Research from PYMNTS’ 2021 Restaurant Readiness Index, created in collaboration with Paytronix, finds that drive-thrus matter even more to restaurant customers than managers would have guessed, with 26% of managers and 40% of consumers reporting that they believe the ability to pick up orders at the drive-thru will be important to restaurants’ future success. Moreover, restaurants with drive-thrus outperform those without. Fifty-seven percent of top-performing restaurants offer the ability to pick up orders at the drive-thru, while only 16% of bottom performers do so.
After the opening of this location, Nation’s Restaurant News reports that Shake Shack plans to open 10 more drive-thrus in 2022.
Fertitta’s Attempt to Shut Down SPAC Merger Met With Legal Threat
Nearly 10 months after Tilman Fertitta announced that he was taking his Fertitta Entertainment Inc. company public via a merger with special-purpose acquisition company (SPAC) FAST Acquisition Corp, Fertitta attempted on Wednesday (Dec. 1) to terminate the deal, Reuters reported.
However, FAST has refused, arguing that the reason the deal still has not closed, despite the passing of the termination date, is because Fertitta has been slow to hand over key financial information; as such, the company is not in a position to shut down the merger on its own.
“We intend to take all necessary steps to protect the SPAC and its investors,” FAST CFO Garrett Schreiber wrote in a letter to Fertitta, according to Restaurant Business. “You are hereby on notice of breach and that should your breach not be immediately remedied, we intend to initiate litigation.”