The 10 Lasting Restaurant Lessons of COVID-19

Like virtually every other restaurant operator, Rosenthal was forced to adapt almost daily—“We pivoted seven trillion times,” he says—and that included doing takeout packages, hosting pop-ups, even running food deliveries himself. But in the end, it was a newfangled quick-service trick that saved him: chicken sandwiches served out of a ghost kitchen.

“Fried chicken was a way that we’ve been able to … generate revenue so we can keep people employed and keep our main managers and cooks and chefs hanging around,” Rosenthal says, “so that when we get out of this thing, we can succeed.”

The last year has been one like no other for the foodservice industry. And no matter how each restaurant has fared throughout the coronavirus pandemic, one thing has proved true for all operations, from quick service to fine dining: There were lessons to be learned from peers up and down the service spectrum.

Searching for a sustainable business

Before the pandemic, Rosenthal was plotting The Lucky Well’s bright future. Two Philly-area locations were open with a third on the way, and expansion into Chicago was on the docket. People loved the concept—full bar, live music, brisket to die for—and developers were knocking.

The problem was, it wasn’t very profitable. So when COVID hit, it hit hard.

“At the end of the day, when we were doing really well, we would be lucky if we eked out 8–10 percent at the end of the year, between paying live musicians and all that stuff,” he says. And that was before the pandemic, back when restaurants could hit 100 percent capacity. “There are no models being built for 50 percent [or] 25 percent. So it’s been hard. We were losing a ton of money.”

But Rosenthal had a trick up his sleeve. He had a chicken sandwich he’d developed as a bar special at The Lucky Well that had taken on a life of its own with loyal guests. He’d created a brand around the sandwich, Motel Fried Chicken—inspired by his love for dusty old motels lining America’s highways—and early in the pandemic he turned one of his Lucky Well locations into a ghost kitchen serving the sandwich by delivery.

The uplift from the sandwich was significant—so significant that Rosenthal immediately started plotting national growth through ghost kitchens, prioritizing mid-tier markets. The first Motel Fried Chicken opened in San Antonio in January, offering both delivery and pickup and selling the sandwiches with herb-brined, buttermilk-fried chicken, along with waffle fries and other sides.

The pivot to ghost kitchens has completely changed Rosenthal’s perspective on growth, and his attitude toward full service. Gone are the days of 5,000–6,000-square-foot spaces, he says, though he’s committed to the same full bar and (eventually) live-music experience. Takeout and delivery are here to stay. He’s even considering rebranding The Lucky Well around chicken, serving not only the sandwich but also rotisserie chicken. Chicken’s way cheaper than brisket, after all.

“We can’t afford to just make 8–10 percent anymore,” he says. “One shutdown like this puts us out of business. We need more of a sustainable business.”

Like Rosenthal, Kenny Gilbert was riding high with his full-service career before the pandemic. The former personal chef to Oprah, corporate chef of 50 Eggs Restaurant Group, and “Top Chef” contestant was preparing to open Cut & Gather in Raleigh, North Carolina, focused on wood-fired Southern favorites. But the restaurant was scrapped because of COVID.

At first Gilbert started cooking meals for his community out of his Jacksonville, Florida, home, marketing through Instagram. But when a restaurant space around the corner became available, he dusted off his own chicken-sandwich recipe and signed the lease. The space still had furniture and some equipment, so after developing a logo and adding some basic aesthetics, Gilbert was able to get Silkie’s Chicken & Champagne Bar off the ground fairly quickly.

The menu at Silkie’s is upscale—a variety of chicken sandwiches with toppings like bacon onion jam, pickled vegetables, and kimchi watermelon rind, sides like truffle gouda mac ’n’ cheese—but the operation is bare-bones. Gilbert and one other cook are in the kitchen preparing everything and washing the dishes, and a cashier at the counter takes and hands out orders. And that’s pretty much it.

“I think that makes more sense, to go with fast casual, because if you think about it, it’s already going that route anyway,” Gilbert says. And that’s not just because of service trends or social-distance rules, he points out; it’s also because he’s realized how much he can streamline costs. “I think about how much money I spent just on paper in the past, changing out menus, all that kind of stuff.” Any future development, he says, will similarly be a simple, counter-service model focused on a small, affordable menu, though unlike Rosenthal, he’s not biting on ghost kitchens or anything like that just yet.

Gonzalo Guzman isn’t so sold on all of the off-premises bells and whistles that have been ushered in during the pandemic, either. For the last decade, the San Francisco chef has been offering his own spins on dishes from his native Mexico using locally sourced ingredients at upscale casual Nopalito. But COVID was exactly the gut punch it was to many other urban restaurants, particularly in a dense city like San Francisco. One of the two Nopalito units closed in June.

Luckily for Guzman, though, a kitchen facility it was already partnering with for catering had a takeout window that it offered to Nopalito. The team started dishing tacos, totopos (tortilla chips), rice bowls, and soft serve out of the window. “We just needed some sort of income to pay for the bills,” Guzman says.

Business isn’t exactly booming; so far, paying for the bills is about all it’s helping to do. But Guzman says it’s forcing him to think more about his future restaurants, which he says will be smaller footprints with more takeout opportunity. What won’t be sacrificed, though, are great ingredients and a dine-in experience.

“Somehow, I want to try to find that balance of still having direct contact with people,” he says. “That’s why I decided to do this career.”

A happy medium

Of course, on the full-service side of the aisle, it wasn’t just chef-led independents that were forced into major evolution because of the pandemic. Chains also confronted a world in which dining-room closures posed a serious threat to their core business. In March, business dropped by 80–90 percent at many of these restaurants, and it still hasn’t fully recovered.

As multiunit systems, though, these chains tend to have more similarities with quick-serve and fast-casual brands, and they were quick to embrace a limited-service mentality. Just look at Eggs Up Grill; the Spartanburg, South Carolina–based breakfast, brunch, and lunch franchise swiftly pivoted to “survivability” mode last March, says CEO Ricky Richardson, which included slashing its menu so that its franchisees could focus more on efficiency and revamping its packaging to make for better off-premises business.

Eggs Up Grill then turned its attention to its ordering platforms. Before COVID, the brand had been testing online ordering in one location, but within three weeks of stay-at-home orders, it was rolled out system-wide. Roughly 20 percent of franchisees had been “dabbling” in delivery before the crisis, Richardson adds, but all climbed aboard the model in March.

The results have been eye-opening. “Seeing the amount of revenue we were able to generate—even as guests started coming back into the dining room—and how sustained that was week over week and month over month, quickly [told us], OK, this could be a long-term benefit for us, a revenue channel that we hadn’t put a lot of thought into in the past,” Richardson says, noting that, by December, sales were back to about 95 percent of pre-COVID levels.

The coronavirus has indeed provided Eggs Up Grill with a big opportunity to learn from quick serves about convenience, removing friction from the ordering experience, and developing takeout processes, he says. The brand even developed a value platform called “Biscuits, Bowls, & Burgers,” which was tailored to direct customers to more portable items.

Richardson says Eggs Up Grill will still hang its hat on full-service dine-in business moving forward, noting that the experience is an emotional one and not something that can easily be transferred through off-premises. But with new ordering channels developed, he says, the pandemic has indelibly changed how Eggs Up Grill will design stores. Pickup stations will become a normal fixture, and one planned location will even have a drive-thru pickup window for online orders.

“Guest habits have changed,” Richardson says. “There are big opportunities, and we’ll continue to make it a priority through quality of execution, through the marketing platforms and programs that we put in place, through the technology that supports that from an efficiency standpoint.”

Red Door Grill in Kansas City, Missouri, likewise faced a learning curve when it adjusted for off-premises business, but it wasn’t a foreign idea for the leadership team; founder Gary Zancanelli was previously a KFC and Taco Bell franchisee before opening the casual-dining brand in 2012. But takeout and delivery weren’t a part of the Red Door concept, as Zancanelli says he wanted to prioritize hospitality and not distract the kitchen operations.

When COVID arrived, his quick-serve experience came in handy. He immediately closed all four of the restaurants, then moved the managers to the location best set up for facilitating off-premises. He opted against third-party delivery and instead contracted with a local delivery service, which hired drivers who wore Red Door uniforms. Then Zancanelli set up a drive thru in the parking lot, with a limited menu of items that could be prepared in 5–7 minutes.

“They would come through the drive thru, place their order, pull into a stall, and within 10 minutes, we’re running that order out, because at that time, we didn’t have any business going on inside,” he says. “We basically set everything up temporarily for this, and it really made an impression on our guests.” Eventually, Red Door installed a new POS system to get online ordering up and running, and it later developed an app.

These new sales channels are just a few of the silver linings Zancanelli sees emerging from the pandemic. Another is the fact that Red Door opened its fifth location in December, and the limited-capacity nature of the opening proved a “blessing in disguise,” he says, in properly getting the restaurant off the ground.

The crisis has also fortified Zancanelli’s commitment to the full-service category. He acknowledges that the off-premises pivot eventually hurt food quality, as the team started to cut corners with its product, which he’s working to walk back now. He cautions other full-service operators from fully embracing the off-premises model, because the urge to simplify operations can easily lead to average food.

“I do think that full service is going to have to become really good at takeout and curbside,” he says. “Do I think I’m going to put a drive-thru window in a Red Door? Probably not. That’s really not our style. But what we’ve taught our [team] is, when [guests] come to curbside, we’re giving them an experience. … You still go out there with the hospitality. There’s still an interaction.”

For at least one chain, the move to a limited-service model will be more than a temporary fix. Bonchon, the Korean fried chicken concept based in Busan, South Korea, with 100-plus locations in the U.S., announced it would soon open its first fast-casual prototype in the Dallas market, and make that model a significant part of its future growth.

CEO Flynn Dekker says the evolution was in the works before COVID, as the company was looking for ways to offer franchisees better ROI by shrinking store footprints and speeding up service, all the while maintaining quality. The pandemic was the perfect opportunity to prove the model. Before the pandemic, about 55 percent of business was dine-in, 11 percent was through third-party delivery, and the brand didn’t have its own online channels. Starting last March, Bonchon “stripped a lot of the excess” out of the brand, Dekker says, and doubled down on its tech stack, prioritizing web and mobile ordering. By the end of the year, dine-in accounted for about 10–11 percent of sales, delivery about 35 percent, and about 40 percent of the remaining takeout business was requested curbside. Some 16 percent of sales were coming through the company’s own proprietary channels.

Even after losing most of its dine-in business, Dekker says, the company hasn’t missed a beat. “We’ve completely pivoted. Our sales are better than they’ve ever been, and they were always good to begin with,” he says. “So we continue to grow our business without really any sort of inside service at all. Our delivery and our carryout, those numbers are off the charts, and we’ve replaced all of the dine-in business that we lost and then some.”

Dekker says there are limits to the brand’s evolution. Drive thrus and ghost kitchens likely won’t be a part of its future. But the evolution it’s undergone for the last year—which also includes some rebranding—will help the brand stay flexible with real estate and expand into new parts of the country.

“We’ll see how that all shakes out in the end,” he says, “but I think that everybody’s got to find their happy medium.”

Some things never change

It’s been clear since the beginning of the pandemic that those brands with robust off-premises strategies and online-ordering channels would fare better through the crisis—in other words, that quick-serve and fast-casual brands were best positioned to weather the storm.

But while much of the full-service industry looked to counter-service types for off-premises tips, it didn’t preclude limited-service operators from learning from their counterparts, too. Indeed, many fast-casual brands are pushing back against the notion that the industry might soon become nothing more than a faceless virtual transaction driven by ghost kitchens and delivery. And the pandemic has provided an opportunity to reconsider what hospitality and service can look like in a fast-casual setting.

Count Aaron Lyons among the fast-casual operators who fully embraces a dine-in future. His Houston-based brand Dish Society boasts a hybrid model of counter service by day and full service by night, with about 25–30 percent of its business being off-premises before COVID-19. When the six-unit concept reopened dining rooms in the summer, it initially did so with counter service only but later adopted a model where dine-in customers could order from their phones in order to limit interaction with staff.

Whether through technology or expanding patio seating, Lyons has been committed to maintaining dine-in service—even while his digital sales are up 600 percent, he says, and even as he explores ghost kitchens as a mode for expanding into new markets. In fact, he’s so committed to the dine-in experience that he’s developing a whole new full-service concept. “When this is all said and done, I think people are going to miss eating out. They’re going to really appreciate it and value it more and treat it as more of an experience, and not take it for granted as they once did,” he says. “At the end of the day, people want to go out, they want to interact with their friends and other people, and they want service, they want hospitality. That will never change.”

Charles Bililies is founder and CEO of Souvla, a Greek concept that identifies as “fine fast,” offering counter service but also boasting wine on the menu and candlelit café vibes at night. A veteran of the fine-dining world before opening Souvla in 2014, Bililies shares Lyons’ belief that the pent-up demand will lead to a resurgence in dine-in business—some day.

“I think we’re probably about two years out for that to really happen,” he says. “I’m just trying to be realistic here. Even with all of the vaccine news and all of that stuff, we’re going to be operating in our current state for quite some time.”

With four locations in the heart of San Francisco, Souvla’s business plunged in the immediate wake of the coronavirus. Bililies made the decision to close the restaurants temporarily as a way to protect his workers, and reopened in June as an off-premises-only operation. As of December, sales were still down 40–50 percent, he says, but not for lack of demand; online sales have been so strong that the ordering system Souvla implemented to facilitate them at one point was erroneously telling customers their orders wouldn’t be ready until the next day.

Bililies is spending his time thinking about survival but also about what the Souvla of the future might look like. It’s not a ghost kitchen or a drive-in or an automat. Rather, he’s looking to full service for some hints, thinking more about a design that prioritizes outdoor and open-air seating, and a dual model in which off-premises operations are facilitated by a satellite kitchen set off from the main one.

It’ll be a long time before those visions become reality. For now, Bililies laments the nights when his restaurants were dimly lit, the candles were aglow, the wine glasses were clinking. Those same dining rooms today are filled with to-go containers and standup fridges. And it’s not just the experience that is gone; so, too, are dreams to soon expand into other iconic cities, starting with New York.

But Bililies isn’t deterred. He’ll still push ahead, and learn from his peers. That’s why he’s planning to take a look at an unfamiliar market: the suburbs.

“This does provide us an interesting opportunity,” he says, “to test the waters.”