Burger King, Popeyes, Jack in the Box and Del Taco ended their partnership with Reef Technology, a ghost cooking startup.
Representatives of the chain provided the reasons for cutting ties with the SoftBank-backed startup, which prepares food for delivery through licensing agreements with chains, as well as popular delivery-only brands such as MrBeast Burger. Reef operates trailers, which the company calls boats, that prepare food for delivery under licensing agreements.
“I can verify that the pilot assignment that Burger King and Popeyes were testing with Reef is over,” a representative for Restaurant Brands International, which owns both brands, told Insider in an email last week. In July, RBI, an investor in Kitchen United, a rival ghost kitchen operator.
A spokesperson for Jack in the Box, which also owns Mexican fast food chain Del Taco, told Insider, “Our trial program with Reef is over and we continue to compare the long term of ghost kitchens for our business. “
Representatives of the reefs responded to a request for comment.
All 4 chains had in the past announced plans to expand their delivery footprint in several states through execution with Reef.
Its launches, shown last week via Insider, come after Wfinishy scaled back its expansion plans with Reef. Last year, Wfinishy announced plans to open 700 delivery locations with Reef alone. 100 to 150 sites by the end of 2025. When Wfinishy scaled back its expansion plans, Reef said the company aimed to increase productivity by leveraging multiple brands on a food trailer.
“As we rolled out our multi-brand model, we’ve already noticed that consistent average sales with the kitchen doubled over the past year,” the company told Insider at the time. Reef recently announced that it opened a virtual food corridor at Raleigh-Durham International Airport with nine food brands and continues to operate with smarter brands such as Donatos, TGIFridays and Qdoba.
But a former chief operating officer who was working at Reef when the startup signed deals with fast-food brands called its exit a “blow” to the company’s business model. He spoke on condition of anonymity for fear of professional repercussions. His identity is known to Insiders.
“Honestly, I don’t see how they’re going to move forward, because for a company like that to sustain itself, you want corporate brands. You want great franchises,” he told Insider on Friday.
Before leaving the company in September 2021, he said Burger King and Popeyes had more than 30 sites operating with Reef.
The big chains are the only restaurants that leave Reef.
Last December, celebrity chef David Chang pulled his fried restaurant, Fuku, from Reef’s trailers. Chang now works with Kitchen United.
Eric Silverstein, owner of a multi-unit dining place in Austin, Texas, told Insider in a recent interview that he pulled his logo from kitchen trailers in April 2022 after working with Reef for about a year. He said the cooks, a single user preparing multiple menus in a single trailer, couldn’t get the right orders for their menu, Fat City. The logo serves ruinous burgers the length of a slider.
“Where the wheels fell is at the level of the ship. They shouldn’t execute,” said Silverstein, who founded restaurant group The Peached Tortilla.
It got rid of the logo after an Instagram influencer posted a complaint about getting a meatball on a muffin. “Instead of crushing it,” Silverstein said.
When he arrived in Reef to terminate his contract, he told them, “We have a place to eat in Austin. I invested six figures in that. They are destroying my reputation. “
Reef is wasting consumers while struggling with operational and licensing issues.
The startup has been cited for operating licensed trailers in several U. S. cities. UU. La company has also been accused of violating food protection protocols.
Last month, Insider reported new closures and trailer violations at startup backed by SoftBank. Health inspectors in Austin, Texas, suspended 4 trailers of Reef food after a recent inspection last month. In mid-September, Philadelphia inspectors cited a Reef kitchen trailer for having the retail license, according to food protection inspection records.
At a city corridor assembly last week, Ari Ojalvo, Reef’s chief executive and co-founder, suggested staff report internally on behaviors that would possibly violate fitness and licensing standards.
The company said its traditional ships are difficult for cities to identify and sort through because cars aren’t food trucks, they lack engines or classic restaurants.
Are you a reef expert eager to share? Contact this reporter by email at nluna@insider. com or Signal at 714-875-6218.