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Grubhub Partners With a Virtual-Kitchen Company

By Rhian Hunt – Jul 21, 2020 at 11:30AM

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Grubhub will pay for the marketing of some of Franklin Junction's larger clients.

Food delivery company Grubhub (GRUB) has inked a new partnership with Franklin Junction, a virtual-kitchen company, according to a press release on Monday. As part of the deal, Grubhub will help several of Franklin Junction's bigger client restaurants advertise their products and services during Q3 2020, paying at least partly for the marketing of the Order XOXO and The Captain's Boil brands.

Franklin Junction provides a digital service enabling restaurants with extra kitchen capacity (a common situation in the era of COVID-19) to use that idle kitchen space to prepare branded foods for sale online to customers across the country. This effectively allows food brands to greatly expand their footprint without needing restaurants or kitchens of their own, while the restaurants benefit from additional business by "hosting" other food brands.

A restaurant kitchen in operation.

Image source: Getty Images.

The company's founder, Aziz Hashim, said, "Franklin Junction allows the units to drive incremental revenue without disrupting current operations and requires no capital expense nor significant alterations to the existing space." The Captain's Boil, a seafood brand, is one of the more successful examples of the business model. A Canadian brand, it was initially hosted in just a dozen Georgia restaurants, but as of this month is hosted at 250 U.S. restaurant kitchens and will be featured at several hundred more by year's end.

Grubhub's online food ordering infrastructure and delivery services appear to be a natural fit for Franklin Junction's concept, though the companies have not yet revealed exactly how the partners' business models will mesh beyond the funding agreement for some of the virtual-kitchen company's leading brands.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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