Wendys closing at least 15 of its 'ghost' kitchens less than two years after announcing major exp
WENDY'S has announced the closures of at least 15 digital locations less than two years after a major expansion.
During an earnings call last month, Wendy's executives noted that its units in partnership with Reef Technology will shutter their doors in the United States.
CEO Todd Penegor explained on the call that the decision and continued development for the fast food chain's traditional locations would prevent the company from reaching its net unit growth until the second half of 2023, per Restaurant Dive.
“In the second quarter, you’ll see [about] 15 US Reef closures,” Penegor said.
In August 2021, Wendy's announced the building processes for 700 Reef units in the United States, Canada, and the United Kingdom.
Known as "ghost kitchens," the Reef stations are digital kiosks that allow customers to order from some of their favorite restaurants for delivery only.
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Stadiums and airports like Raleigh-Durham International Airport in North Carolina implemented Reef locations over the past year or so, Restaurant Business Online reported.
Wendy's originally had lofty goals for the Reef "ghost kitchens," plotting out at least 8,500 locations around the globe for 2025.
In 2022, the fast food chain cut back significantly on its projections, noting only 100 to 150 domestic units by 2025 instead.
The first quarter of 2023 also saw Wendy's suffer a net loss of five stores, according to data from the earnings call, although Penegor noted that some were shut down for remodeling.
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Now, closures have begun, with interest rates and delivery fees being possible reasons for the chink in Wendy's plans.
Some experts believe that the March 2022 increase in interest rates by the Federal Reserve, the first since the COVID-19 pandemic began, contributed to Wendy's losses with their "ghost kitchens" as it greatly impacted the tech industry.
The Federal Reserve made the decision in an effort to slow inflation, but the side effect was significant layoffs in tech.
Reef Technology allegedly cut five percent of its workforce that year alone, according to Restaurant Dive.
High delivery fees, along with customers now returning to and frequenting in-person establishments, may have also given deliver-only services little room to profit.
The U.S. Sun has contacted Wendy's and Reef Technology for comment on the announced closures.
The renovations that Penegor mentioned also might be closer than customers think, as Wendy's recently revealed its blueprint for an underground delivery system at restaurant locations to get food to vehicles faster.
The fast food chain partnered with Pipedream, a hyper logistics company, to create and manage the robotic system with the idea of delivering meals to customers in seconds.
Impressively, the technology would use robots to transport meals underground and deliver them to the car-side Instant Pickup portal.
Deepak Ajmani, the US chief operations officer at Wendy’s, explained that the "Instant Pickup system has the potential to unlock greater mobile order speed of service and accuracy, enabling us to consistently deliver hot and fresh Wendy's products to our fans.
"We know that serving orders quickly and accurately leads to increased customer satisfaction."
Wendy’s plans on integrating Pipedream’s system into one of its existing restaurants later this year.
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For more related content, check out The U.S. Sun's coverage of the fast food chain's major change to its drive-thru service.
The U.S. Sun also has the story of why customers are heartbroken after a famed Wendy's side dish disappeared from the menu.
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