'Virtual' restaurant brands are all the rage. Here's why stir-fry chain Genghis Grill created an almost-identical delivery-only brand.

• Stir Fry Chef is a "virtual" delivery-only restaurant brand created by Genghis Grill.
• All of Stir Fry Chef's food is prepared in Genghis Grill kitchens.
• Adding the Stir Fry Chef brand helps Genghis Grill reach different customers, an exec told Insider.

Genghis Grill is a Mongolian restaurant chain that specializes in customized stir-fry dishes. Stir Fry Chef is a Mongolian restaurant chain that also cooks up stir-fry, minus the customization.

To the customer, they're two completely different restaurant brands. Yet, the food comes from the same kitchens.

Genghis Grill and Stir Fry Chef are part of a growing breed of so-called "virtual" delivery-only restaurant brands that are run out of the same kitchens, by the same owners. Other examples include Pasqually's Pizza, owned by Chuck E. Cheese, and Neighborhood Wings, owned by Applebee's.

Genghis Grill launched its Stir Fry Chef brand in the summer. Doug Willmarth, Chief Brand Officer at Genghis Grill, told Insider that Stir Fry Chef was helping his franchisees to boost sales.

Although Genghis Grill has some set dishes on its menu, it makes most of its sales from custom dishes where diners can choose which base, toppings, spices, and sauces they want. To many customers, the brand is primarily a create-your-own chain, Willmarth said.

Stir Fry Chef's menu is, on the other hand, made up solely of pre-set dishes. This helps the business cater to a different group of customers, Willmarth said: customers see Stir Fry Chef as "a regular restaurant where I can just order off the menu."

Stir Fry Chef dishes are made in 40 of Genghis Grill's 51 kitchens across the US, using the same equipment and similar ingredients, but slightly different recipes, Willmarth said. It costs existing Genghis Grill restaurants less than $1,000 to kit out their kitchens so they can make Stir Fry Chef food, he said.

"Both our stores and our franchisees can leverage existing food they have in the restaurant, the labor and cooking skills that are in the restaurant, the equipment they have," Willmarth said.

More and more restaurant chains are creating virtual brands amid high demand for food delivery.

Brody Sweeney, CEO of Thai chain Camile Thai, told Insider that virtual brands were created to "sweat assets better."

He said that Camile Thai was operating a virtual brand called Shanghai Sally in London, and its dishes share the same core ingredients as Camile Thai. This makes it easier to operate both brands in one kitchen, Sweeney said.

Some virtual brands are ran out of ghost kitchens, which don't have dining rooms and cook food solely for delivery. Hot-dog chain Dog Haus has, for example, launched a slew of virtual brands including Plant B and Mutha Clucka, which are run out of both brick-and-mortar restaurants and ghost kitchens.

Dickey's Barbecue Pit told Insider it's even opening a brick-and-mortar restaurant for Wing Boss, which it first launched as a virtual brand.

Genghis Grill's Willmarth said that physical restaurants were "certainly is a consideration" for Stir Fry Chef, but not for a while.

Rather than launch virtual brands themselves, some restaurants have instead hosted them for other companies. Franklin Junction, for example, matches restaurants with spare kitchen capacity to brands looking for space to prepare delivery-only food.

"Restaurant kitchens are very multi-purpose vehicles," CEO Rishi Nigam told Insider. "They've artificially been limited by putting a $5,000 sign out front that says: 'We only make this kind of food.'"