At the height of its popularity, in 2020, the ghost kitchen business looked like it might become a $1 trillion industry within a decade, according to Euromonitor. Since then, restaurants built for delivery and takeout have floundered, and the investment dollars that fueled them have dried up. If the ghost kitchen business is shattered, SBE founder and CEO Sam Nazarian is sweeping up the pieces and reassembling them into something new. 

The notable hospitality and nightclub operator, who launched a virtual restaurant business of his own just before the pandemic, is taking over assets from Kitchen United, a onetime ghost kitchen leader. Kitchen United, which had opened more than a dozen outposts since its founding in 2017, shuttered its locations late last year. It’s Nazarian’s second acquisition in the space after last summer’s takeover of Nextbite, which created and ran virtual brands out of existing restaurant kitchens. Investors including Softbank and Google Ventures had collectively poured more than $300 million into Kitchen United and Nextbite before they failed. 

“You’re left scratching your head,” Nazarian says. “How are these great companies like Nextbite and Kitchen United not in a position to be successful on their own?” 

This isn’t a rhetorical question. Nazarian is snapping up the best parts of these businesses that were once on top and taking advantage of their relationships with huge food brands to build an empire of next-gen restaurants. They’ll inhabit physical spaces, digital ordering platforms, and grocery-store shelves. 

It’s telling that Nazarian likes to refer to these restaurant brands as IP, or intellectual property. This IP includes the food, of course, but also the brand and often the chef or influencer behind it. Concepts are built for target demographics: millennials, Gen Z, and the fast-growing U.S. Hispanic population, among them. To develop the IP, Nazarian says, “We’ll bet on presumed categories, and then we’ll bet on partners who we think will amplify that category the best.” 

Often, these partners are major celebrities who can lend instant credibility. For example, Nazarian tapped star actress Sofia Vergara and her son Manolo for Toma, a soon-to-launch concept in New York and Atlanta that Vergara calls a “love letter to Latin food.

Then Nazarian floods the zone. Last year’s Nextbite deal came with a handful of virtual concepts that the startup had developed, Packed Bowls by Wiz Khalifa and Nestlé Toll House Cookie Delivery among them. (Nazarian tapped Nextbite’s former chief growth officer, Geoff Madding, to run Everybody Eats as COO.) But most importantly, Nazarian now controls Nextbite’s ties to major brands and distribution channels, like IHOP and 7-Eleven, and its relationships with hundreds more small- and medium-size restaurants that served Nextbite brands to diners. 

In Kitchen United, Nazarian inherited relationships with the grocery store Kroger, where KU operated ghost kitchens, and Alimentation Couche-Tard, the company behind Circle K convenience. Both of those companies once invested in Kitchen United; now they might offer prime shelf space for Everybody Eats’s packaged food. 

In January, Nazarian announced his return to the hotel business through a deal with Wyndham. He sold his remaining stake in SBE’s hotel business, including the Delano and SLS, to Accor in 2020, leaning on the company’s restaurant brands to get through the pandemic. He plans to open as many as 50 new hotels under the working title “Project HQ.” Each hotel concept will be anchored by an influencer- or celebrity chef-led restaurant, yet another distribution channel for Everybody Eats.

“When I started 20 years ago . . . all the big hotel chains wanted nothing to do with integrated food and beverage,” he says. “And look at it now: It’s the fastest-growing and most relevant part of hospitality, everyday lifestyle.”