What is a Ghost Kitchen? Everything You Need to Know
A ghost kitchen is an unfamiliar concept to some but is one that has been growing in popularity since the COVID-19 pandemic. By the end of 2021, delivery-only restaurants are anticipated to grow by more than 15%. The digital food ordering and food delivery industries have grown rapidly, indicating the potential for most ghost kitchens in the upcoming years.
A ghost kitchen is a food service business without seating or dining areas that offers delivery and sometimes takeout options. Many ghost kitchens utilize third-party delivery services, such as Uber Eats, to take and deliver food orders. Ghost kitchens are also commonly referred to as cloud kitchens, dark kitchens, or satellite kitchens.
These commercial kitchens are designed to meet the high demands of delivery orders. Without a storefront or dining area, staff prepare and deliver food only available for delivery. It is basically a restaurant without a known location. Ghost kitchens have many advantages because they limit operating costs for brick and mortar restaurants and focus on their cooking rather than other restaurant elements. You will also be able to save money on initial start-up costs, building maintenance, and upkeep, as well as staff like hostesses/hosts and waiters/waitresses. However, like all businesses, there are also disadvantages, including the fees associated with third-party delivery apps, which could potentially deter business.
How do Ghost Kitchens Work?
Ghost kitchens generally begin by renting out a commercial kitchen space where delivery orders can be prepped. These kitchens include all of the regular restaurant kitchen equipment but are not attached to any type of dining space. Once you have a space identified, you can move onto the next steps of your ghost kitchen business: starting your online presence. While you can opt to share a space with other virtual kitchens, many ghost kitchens rent their own spaces to keep up with the demand of delivery orders.
There are many different potential ghost kitchen business models. Commonly, an independent ghost kitchen will prepare a menu in a kitchen with no storefront. However, there are other situations where multi-brand ghost kitchens may collaborate to receive and deliver orders.
Ghost Kitchens vs. Traditional Restaurants
Compared to an average standard restaurant, a ghost kitchen could be only a fraction of the square footage. An average ghost kitchen size is between 200 to 300 square feet, where an average restaurant is around 2000 square feet. The same goes for kitchen staff, as traditional restaurants have much more staff, at an average of 25+ where a ghost kitchen may need only a few! Start-up time and costs are higher for restaurants as well, where a ghost kitchen could be launched within as little as one month with minimal start-up costs.
Who Might be Interested in Starting a Ghost Kitchen?
Almost anyone can start a ghost kitchen restaurant. New chefs and entrepreneurs might be interested in trying a ghost kitchen, as it gives a chance to test your concept and skills without extreme start-up costs. In addition, small restaurants looking to expand could try a ghost kitchen to test demand for delivery crowds. Other people who might be interested in starting a ghost kitchen include food truck owners, as they could expand their customer base to a whole new crowd of people looking for delivery rather than walk-up. In addition, college campuses may also seek to create a ghost kitchen as delivery is in high demand in college towns and campuses.
Advantages to Ghost Kitchens
As mentioned above, ghost kitchens have some clear advantages. They allow restaurants to save money on reduced staff, as they limit the number of staff required for the front-of-the-house positions. This allows businesses to focus on their staff that is critical to their cooking, like high-quality chefs, and allows them to focus on the quality of their ingredients purchased. They also have fewer start-up costs associated with starting the business, such as things like decor, tables, chairs, etc.
Another advantage of ghost kitchens is that they allow chefs to change up menus regularly, as they are all virtual. Without the cost of printing new menus, this allows your kitchen to change seasonally, or however much or little as desired.
Disadvantages of Ghost Kitchens
Opening a ghost kitchen can also come with certain challenges. For example, ghost kitchens rely on delivery services for operation. Creating your own delivery system can be complex, so many ghost kitchens rely on third-party delivery services. Oftentimes, these take many fees on each order, which can be a clear disadvantage.
Using third-party delivery services can also cost money, as you need to pay for advertising and to appear on local searches. Securing access to data about customers ordering from your ghost kitchen can be a great way to ensure you can target your marketing towards a specific audience. This can be done by creating an email newsletter, using social media marketing like Facebook or Instagram, or creating a rewards program to draw customers back in.