The startup behind MrBeast Burger sees a huge opportunity in influencer 'ghost kitchens' and plans to expand the brand to 1,000 restaurants

  • YouTube star MrBeast launched a virtual restaurant brand, MrBeast Burger, in December.
  • The team is now looking to expand to 1,000 restaurant locations by the end of Q2.
  • Insider spoke to MrBeast’s launch partner, Virtual Dining Concepts, to learn more about the business of influencer “ghost kitchens.”
  • Visit the Business section of Insider for more stories.

When YouTube star Jimmy Donaldson (MrBeast) posted a video about opening a burger joint in December, it seemed like just another stunt to drive video views. 

The 22-year-old creator, known for spending lavishly on subscriber challenges and cash giveaways, created a pop-up “MrBeast Burger” restaurant. He filmed himself handing out free food, piles of cash, iPads, and a car.

But at the end of the post, Donaldson announced that MrBeast Burger was going national.

Fans could order MrBeast burgers, fries, and grilled cheese sandwiches from 300 restaurants across much of the US. Donaldson partnered with Virtual Dining Concepts, a company that works with celebrities to launch delivery-only food brands, for the venture.

“The minute the video came out we opened and we were beyond slammed and ill-prepared for his incredible following and demand that ensued,” Virtual Dining Concepts CEO Robert Earl said. “It was beyond any expectation anywhere.”

Virtual Dining Concepts helped the MrBeast team design a menu, secure restaurant partners, and create training materials so every product would taste the same nationwide. The company enlisted a network of 300 “ghost kitchens” (some that it owned), which paid an all-inclusive platform fee to cook and sell MrBeast menu items. Many of these partner restaurants saw a sales lift from the new source of demand. 

“You’re using your existing kitchen labor force,” Earl said. “You’re using your existing rent and your utilities. So it’s extremely additive and profitable for the restaurant.”

Earl, 69, has worked in the restaurant industry for decades. In addition to running Virtual Dining Concepts, he currently serves as chairman of Planet Hollywood and previously was CEO at Hard Rock Café.

He said his team views MrBeast Burger as a permanent brand, not a one-off stunt. The company is planning to expand to 1,000 restaurants by the end of the second quarter. It recently launched in Canada. And it’s inspired copy-cats. YouTube creator Elijah Daniel launched his own delivery only ghost-kitchen concept, Gay Burger, earlier this month.

Enlisting internet stars to promote food products has been on the rise in recent months.

TikTok star Charli D’Amelio launched a drink with Dunkin’ called “The Charli” in September. The company sold hundreds of thousands of “The Charli” in the first five days of its launch, telling Insider that it contributed to a US sales increase in the third quarter of 2020. And YouTuber David Dobrik said he’s planning to roll out a brick-and-mortar pizza restaurant in the next year.

Experts told Insider that as the popularity of digital creators rises, we’ll see more influencer-branded food items on store shelves. 

“Who is popular and who is famous really has shifted to things like TikTok [and] YouTube,” said David Henkes, a senior principal at the foodservice consultant and research firm Technomic. “I don’t think the idea of celebrity endorsements or partnerships is in any way new. Who they’re going after and maybe how they’re doing it is different.”

Can influencer-branded restaurants last after the initial hype?

Most internet stars are experienced sellers.

They earn a living by promoting products in sponsored posts. Some have dipped their toes into direct-to-consumer sales in recent years as they’ve sought new ways to make money. And selling a virtual restaurant — where all transactions occur on apps like Grubhub and Uber Eats — isn’t much different than selling a merchandise line on Fanjoy.

“The big draw here is when you have a celebrity name in an ecommerce capacity,” said Haley Kabus, a senior strategist at The Culinary Edge, a food and beverage consultancy. “You just have this incredible built-in fan base that’s so valuable when you’re trying to build a social presence all through the tap of a phone. People can browse MrBeast stuff on YouTube and then switch over to Uber Eats and then see him right there.”

But the ease with which a virtual restaurant brand can pop up has led some in the industry to wonder whether they can last. 

“It’s sort of a reflection of today’s short-term attention span,” Henkes said. “You want to create some buzz and get hot for four to six weeks maybe and then you move onto the next thing.”

“I think MrBeast is a little bit more of an anomaly,” said Kevin Gould, CEO at Kombo Ventures, a startup that works on direct-to-consumer products for influencers. “He’s known for doing over-the-top things.”

“These types of brands, or rollouts, go in stages, and I think the early stage is heavily weighted on the one influencer and then over time you start to see it naturally shift more toward the way a normal brand would operate,” he added. 

As the team behind MrBeast Burger looks to expand, other influencer restaurants are already the queue.

Virtual Dining Concepts just launched a new restaurant brand for Food Network star Guy Fieri. Daniel partnered with a startup called House.AI to launch Gay Burger. And others in the influencer industry are eyeing ghost kitchens as an experimental category for direct-to-consumer sales.

Sam Wick, Head of UTA Ventures, which launched YouTube star Emma Chamberlain’s coffee brand in 2019, said his team is actively exploring new influencer food concepts for 2020.

“We strongly believe that ghost kitchens and delivery-only restaurants will increase in popularity,” he told Insider in an email. Like the team at MrBeast Burger, Wick noted the importance of building a lasting business rather than a single product-line drop. 

“Celebrity and talent is just this wonderful opportunity to ignite a brand,” Virtual Dining Concepts’ Earl said. “After that, it’s down to how good your operation is as to whether you get repeat customers.”

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