Though Local Kitchens is focused on takeout, they also embrace the dine-in experience. | Photo: Local Kitchens
Local Kitchens has raised $40 million to expand its takeout-focused food halls across Southern California. The Series B round was led by existing investor General Catalyst, a venture capital firm.
Local Kitchens was founded in 2020 and currently operates 12 locations in the Bay Area and Sacramento. Each location features approximately eight local or regional restaurant chains, cooking a variety of dishes from chicken sandwiches to tapioca to Mediterranean cuisine in one kitchen. Customers can mix and match from the diverse menu for delivery, takeout, or dining in.
The company offers a smart take on ghost kitchens, the multi-branded delivery-only restaurants that operate out of sight of customers and have largely failed in the wake of the pandemic.
Local Kitchens are often located on main streets close to where people live, and most customers pick up their food themselves, but they also offer the option to order on the spot and eat in the dining room. Co-founder and CEO John Goldsmith wrote in a blog post that this format helps Local Kitchen “preserve the magic of food as a means to bring people together.”
But on the back end, Local Kitchens is as high-tech as a ghost kitchen. They built most of their systems from scratch, including the POS, KDS, and a program called Dynamic Firing that coordinates the cooking process so items from different brands can cook at the same time.
The technology will make Local Kitchens more efficient at operating, allowing it to reinvest in the business, Goldsmith wrote. It will also help increase top-line revenue by consolidating multiple brands into one store. Local Kitchens is now profitable on a per-store basis, Goldsmith wrote.
The company also wants to give a platform for growth to its partner brands, which include San Francisco-based Proposition Chicken (two standalone locations and nine in partnership with Local Kitchens) and Boba Guys, which has 17 locations across all Local Kitchens locations, as well as burgers from The Melt, Mexican from Nopalito Taqueria and desserts from Humphrey Slocombe and Milk Bar.
Each store carries mostly the same brands, with some slight variations depending on the market.
Originally called “micro food halls,” Local Kitchens has now adopted the simpler name of “multi-brand restaurants,” and Goldsmith predicts big things will come from it.
“We believe this type of business model has the potential to grow exponentially and be as disruptive to the restaurant industry as fast-casual was pioneered by Chipotle in the 1990s, and before that, fast-food drive-thru was pioneered by McDonald's in the 1960s,” he wrote.
Local Kitchens' latest funding round follows a $25 million Series A in 2021. Since then, the company has grown fourfold, a representative said in an email.
On the other side of the country, a similar strategy is being adopted by Wonder, a delivery-focused food hall startup founded by billionaire entrepreneur Marc Lore, which recently raised $700 million and plans to open 90 stores by the end of next year.
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