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Wendy's To Open 700 Ghost Kitchens

A Wendy's restaurant in Wheaton, Maryland

Ghost kitchens are proving their staying power with more major companies joining the trend.

Wendy's will be opening 700 ghost kitchens in the U.S., U.K. and Canada over the next five years in partnership with REEF Technology, the fast-food chain announced on Wednesday. The program started with a pilot of eight delivery-only kitchens in Canada last year and could open up to 50 permanent locations by the end of this year.

Backed by over $1B from equity sources such as SoftBank Vision Fund and a subsidiary of United Arab Emirates sovereign wealth fund Mubadala Investment Co., REEF leases parking lots and installs various extra uses on the land, from mobile healthcare clinics to neighborhood-level logistics hubs, along with delivery-only ghost kitchens through its Neighborhood Kitchens business line.

With the new partnership, REEF will become the first Wendy's franchisee in the U.K. To date, REEF has leased some 5,000 locations in about 30 cities around the world, according to the Wendy's press release. Wendy's has also launched a $100M fund for the development of new brick-and-mortar locations as a way of lowering the barrier to entry for potential franchisees. The fund will use capital raised from a debt restructuring that closed in the second quarter, according to Wendy's quarterly report.

As the coronavirus continues to batter restaurants around the globe, food delivery has retained much of the market share it gained in 2020 when indoor dining was banned in most of the U.S. and elsewhere. Ghost kitchen operators had already been planning to be a permanent fixture in the food and beverage landscape.

REEF has also used some of its capital to invest in other ghost kitchen concepts like Sam Nazarian's Creating Culinary Communities, or C3.