This startup wants to make it easier for local restaurants to expand beyond their hometowns

While a typical food court features a sea of off-white cafeteria seating, fast-food stalls with lit-up signs and pre-made pizza and soft pretzels behind glass panels—plus lines wrapped along the counter to the cash register—micro food hall Local Kitchens is a little less chaotic.

There are no stalls or golden arches, simply a glass door with restaurant partner decals and, in some locations, a smattering of tables and chairs.

Inside, two arrows point consumers to pick up their online order at a cubby, check its status on a mounted screen, or place a new one on an iPad nearby. Walls are adorned with founder stories, sharing the origins of Israeli street food restaurant Sababa or Filipino party food truck Señor Sisig.

Local Kitchens cofounder and COO Andrew Munday, an early DoorDash employee leading operations, said he’s “more personally a fan of improvements than inventions.” The California-based startup doesn’t want to upend the food court—it wants to make it easier for local restaurants to expand beyond their hometowns.

When the pandemic hit in 2020, Munday and his co-founders—former DoorDash software engineer Jon Goldsmith (CEO) as well as Jordan Bramble (CTO), whose data and software career has spanned Cava and the White House—quickly noticed that local restaurants didn’t have any allocated space for the huge uptick in takeout and delivery orders that were coming in, let alone resources for expansion.

“We were asking ‘Why are you guys not in the Bay, or San Jose, or the North Bay, or all these different parts like Sacramento?’” Munday told Retail Brew. “We kept running into the same answer, which was, ‘Every time I open a brick-and-mortar, I don’t see my family for 9 to 12 months.’ We tried to dig a little deeper and think about, why is that?”

Ghosting: Local Kitchens evaluated ghost kitchens as a possible solution, but while a typical ghost kitchen provides a building and space, businesses still need staff, management, food procurement…the list goes on. So Munday and his co-founders sought to create a biz that offered an all-in-one deal.

• Local Kitchens has since grown to six locations (opening its latest in Roseville on Tuesday), each featuring 8–10 local restaurants, and raised $25 million last June from VCs, including Stephen Curry’s Penny Jar Capital.

Despite the similarities, Local Kitchens “never” refers to itself as a ghost kitchen, Munday said, largely because ghost kitchens aren’t optimized for pickup and typically focus on new, rather than existing brands.

• Local Kitchens prioritizes the in-person experience and hospitality, Munday said, with a greeter at locations to direct “guests” (that’s what they call consumers). Some locations also feature indoor and outdoor seating.

“We had such a hard time describing what we did early on,” he said. “The best advice for someone to describe something new is actually have your guests describe it.” (On the cutting room floor: “a rollercoaster of tasty delights.”)

That “rollercoaster” includes mix-and-match cuisine options. Local Kitchens allows guests to do so by ordering through its website. Its Cupertino location, for example, features Indian, Thai, Filipino, Vietnamese, and Mediterranean food, plus burgers, salads, and ice cream.

• They can also place orders for single restaurants through DoorDash and Uber Eats.

The company selects restaurants and cuisine types to partner with based on data such as consumer polling, the area’s demographics, and Yelp reviews, Munday said. It also focuses on the suburbs, where there’s typically a lower volume of restaurants, particularly local ones, and where it’s found people have more of a penchant for pickup, rather than delivery.

Cooking with gas: The ultimate goal is to help resource-strapped restaurant owners grow their biz, and some of its 19 partner restaurants are on track to reach $3 million in annualized sales just from Local Kitchens, Munday said.

“We want to help people expand across the US,” Munday said. “We want to bring someone from being in two locations to 100.”

Local Kitchens operates a licensing model, Munday said, so it pays owners a royalty and they work together on menus that feature 90%–95% of their restaurant’s offerings.

• The startup said it grew its annual recurring revenue 10x last year, and is on track to do the same in 2022. It declined to disclose further financial details of its restaurant partnerships.
• It also works with restaurants to create training materials for Local Kitchens employees (there are typically five to 10 workers at a time in a location, depending on the shift) that some go on to use in their own restaurants, Munday said.

“The exciting day will be when one of our partners is doing, let’s say $10 million through us. And then the next milestone, maybe like $100 million—that’s like real value that you’re putting into an entrepreneur’s pocket.”

Next up: It’s still focused on California for now, “filling out” the rest of the Bay Area first, with additional spots in Davis and Los Gatos on deck, before it expands to Southern California in areas like San Diego and Los Angeles. Its first location outside the Golden State will likely be Texas, he said. (It already has a Texas-based Real Estate Manager job opening on its site.)

• Plus, Munday said Local Kitchens aims to triple its 180-person team this year. It’s hiring across engineering and kitchen ops, along with a market launcher—sounds intense, but they’re essentially “quarterbacking” store launches, a role he said was “one of the most sought-after” gigs in his DoorDash days.

With such a new concept, growth and expansion won’t be a piece of cake, he noted, but the team’s background should help.

“We’ve proven through experiences with DoorDash and others that we can scale a company,” Munday said. “It’s a new test, and it’s gonna be really hard. But if there’s a team to do it, we’re a pretty good team to bet on in this space.”