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Pokéworks Defies Trends, Ramps Up Restaurants

Pokéworks started in what some might call a hallway in Manhattan, but it’s since risen to 54 locations with more than 130 on the way.

The Irvine-based fast casual poke concept, which relies on its savory sauces and fresh ingredients to differentiate itself, is growing through franchising, set to test a new Cruise-Thru lane, expanding its app services and has plans to grow its ghost kitchens following the opening of a Chicago location this year.

The business, whose parent is Beyond Franchise Group LLC, has opened 10 restaurants so far in 2020 with three more slated to open by year’s end. That keeps the company on target for a 2027 goal of getting to 300 doors. It currently has two local spots, in Irvine and Laguna Niguel.

“It was around the end of 2016 when we realized poké is not a fad. It’s not a trend. It’s something that would develop into its own category, and we felt like our model and how simple it is and the investment required to start it up was very attractive,” said Pokéworks co-founder and Chief Development Officer Peter Yang.

Currently, about 15% of the restaurants are company owned with the rest franchised. Franchisee costs to open a restaurant range anywhere from $260,000 to $660,000.

An individual restaurant, on average, had annual gross sales of $1.3 million in calendar year 2018, the most recent information available through state documents. The company declined to provide financial information.

Earlier this year, Pokéworks inked a deal with Chicago-based ghost kitchen operator Epic Kitchens for its first ghost kitchen in the Windy City, with plans to continue to expand that network in the coming years. The point would be to ensure faster delivery, particularly in urban markets where there may not be as much space for a full restaurant buildout and there’s high demand among a consumer base looking for delivery.

Pokeworks

Power of the App

The ghost kitchens will be anchored by the company’s mobile app, which will see an in-app delivery option added next year.

Orders through the app are also tied into a new Cruise-Thru lane that will be tested at a Knoxville, Ky.-based Pokéworks next year and added to more restaurants, in places such as the suburbs and other areas where there’s more land.

“It’s not your traditional drive-thru,” Yang said. “It’s designed so guests can place an order on the app and, once they arrive, rather than waiting in line or finding a parking spot for curbside, they cruise through.”

The idea had been brewing for a bit of time, but as with many operators, Pokéworks found the pandemic accelerated the timing for the lane.

“The pandemic just put everything on a super speed track. For example, we definitely knew ordering from apps was going to be a norm in the future,” Yang said. “We started investing in that back in 2017 and I’m glad we did because we’re definitely seeing that pay off this year.”

The company opened a Laguna Niguel Pokéworks in March, just before the state’s stay-at-home order, and the franchised door has done well for itself, officials said.

Part of the company’s successes this year has been in third-party delivery, which has more than doubled, allowing for the company to capture most of its lost dine-in business, according to Yang. The company said it’s also trimmed about 14% on the buildout of new locations via menu consolidation and other slight tweaks.

Pokeworks Cruise-Thru lane

Starting Small

The momentum now surrounding the business is a big payoff for a couple sets of brothers and college friends who took a chance on Pokéworks when they launched it in 2015. The four came from families in the restaurant business.

“We’ve always been in that environment and just naturally we love food and we love not only playing with the flavors, but we love the art.”

Poké seemed like an interesting proposition.

“We’ve all been to Hawaii. We really enjoyed the food and we saw the opportunity of bringing a QSR concept back to the mainland,” Yang said.

They began tinkering, he said, in the makeshift test kitchen he set up in his Irvine garage, using a sandwich table as the four concocted different sauces. That’s where the company’s signature sauces—umami shoyu and a sweet chili gochujang, for example—still used today were developed.

The four signed leases that same year in New York City, Irvine and Mountain View. Manhattan came online first. It was a 600-square-foot, narrow space with only enough room for six stools for dining in. It didn’t matter since many customers were office workers looking for food to go.

“It was a very humble, tiny storefront,” Yang said. “We opened on Dec. 13 when pretty much half of Manhattan had left for the holidays. We had a couple people come in and say ‘What is that? What are you guys selling?’ No one knew what poké was at the time. When everyone came back to the city in January, the line kept building and building.”

The business was self-funded in the beginning and in 2018 drew an undisclosed investment from Japan-based restaurant operator Toridoll Holdings Corp. when Pokéworks totaled 21 locations.

Restaurant sizes can run as large as 1,500 square feet, although the ghost kitchens can be smaller. While delivery and pick up are hot right now and may continue to grow, Yang said in-restaurant dining will still be an important component to growth and the brand in future buildouts.

“There’s beauty in the hospitality of things, being face to face and giving them that experience,” Yang said. “That’s always been our passion and I’d like to believe that we’ll get through COVID together and when we return to a normal sense where dine in comes back.”

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