One could argue that no industry has felt the financial pains of the COVID-19 era like dine-in restaurants. Whether it's on-again, off-again government-mandated lockdowns or limiting indoor seating capacity — sometimes as low as 25% — brick-and-mortar restaurant owners are doing all they can to stay afloat, including taking advantage of the rise in demand for delivery and takeout.
This same rise has led to an explosion of new ghost kitchens, also known as virtual kitchens, cloud or dark kitchens, offering customers the option of a virtual dining experience. A ghost kitchen is no different from a dine-in restaurant, minus one factor — a dining area. While ghost kitchens existed in the pre-COVID-19 world, the number that have opened since then is staggering. Many entrepreneurs saw the void left by shuttered or partially shuttered dine-in restaurants and jumped at the opportunity to fill it.
If you're contemplating whether to open a dine-in restaurant or a ghost kitchen, as with most things in life, there are pros and cons to each. Let's break those down and explore some of the exciting new technology involved in running a ghost kitchen.
Opening a Dine-in Restaurant
There have certainly been better years to open a restaurant than 2021. COVID-19 has presented unprecedented challenges to restaurant owners, with many struggling just to get by. Others are making it work through a combination of outdoor seating, limited indoor dining, takeout and delivery. At the same time, a large number have unfortunately closed their doors forever.
Nonetheless, new dine-in restaurants are opening and will continue to do so, despite the current challenges. Opening a restaurant during a pandemic presents multiple obstacles, from the difficulty in forecasting sales to uncertainty over the supply chain. One thing these new restaurant owners have going for them is the ability to adapt, reimagine and do everything possible to follow CDC guidelines thoroughly, creating an environment where guests feel safe enough to become regulars.
Is Opening a Dine-in Restaurant Right for You?
Whether or not you should open a dine-in restaurant depends on several factors, especially in 2021. Here are a number of pros and cons.
- Walk-in traffic is cheaper than advertising
- As more restaurants close, there is less competition
- Providing an intimate dining experience could attract more customers.
- Can offer dine-in experience and takeout/delivery at the same time
- New surge in customers post-pandemic
While dining in may not be an option for many people right now, there's no doubt that the standard restaurant provides an experience that you don't get with takeout. Moreover, once the pandemic does end, it's likely that people will flock to restaurants to make up for all those months they didn't get to eat out.
- Uncertainty about the future of COVID-19 shutdowns and capacity restrictions
- Higher overhead costs than ghost kitchens
- Insurance is more costly than ghost kitchens
- Usually, a lack of profitability for at least one year
Because a dine-in restaurant offers more options than a ghost kitchen, it tends to be a more expensive investment--especially in an environment plagued by a pandemic that continues to shape the industry every day.
Is Opening a Ghost Kitchen for You?
Ghost kitchens are by no means new, though the challenges of COVID-19 have opened the door for their rise in popularity. With so many people staying home, combined with the limitations placed on dine-in establishments and the drastic increase in delivery and takeout orders, ghost kitchens could be the answer for those looking to cut their teeth in the restaurant business or even add to an existing project. Here are some of the pros and cons involved.
- Less overhead
- Current uptick in delivery and takeout.
- Rising trends
- Can manage multiple businesses at once
- Less competition
- Lack of walk-in traffic
- Lack of intimate dining experience
- Lack of support staff when needed
- Difficulty managing online orders
It makes sense that ghost kitchens combined with more online ordering options would gain popularity and disrupt the system in the digital age. COVID-19 has only sped this process up. However, the difficulties associated with ghost kitchens--namely managing online orders with a limited staff-- have not changed. Ghost kitchens are 100% dependent on these orders, so it's important that they're handled properly.
New restaurant technology offered through platforms like Cuboh is streamlining the online ordering process for restaurants and ghost kitchens by combining all of their online orders from various delivery services into one dashboard. Having everything in one place improves efficiency and customer service.
But that's not the only technology offered by Cuboh for ghost kitchens. Anyone who has ever been in the back office of a restaurant or ghost kitchen has seen the never-ending onslaught of receipts, invoices and other paper records. Things become much more efficient once restaurant sales reports, restaurant analytics and account information are combined into software that enables owners to access this information easily from a digital device.
Making The Right Choice For You
For owners of ghost kitchens and those looking to open one, the pandemic has presented never before seen opportunities for non-traditional restaurants. Prior to COVID-19, the risk to not only survive as a ghost kitchen but thrive as one, was not a chance many would have taken. But now, with the popularity and ease of online ordering, delivery and takeout, many naysayers are taking a second look at ghost kitchens.
So should you open a dine-in restaurant or a ghost kitchen? What is right for you depends on a number of factors. Perhaps you're a chef who has always wanted to open your own place, but the costs were too high. A ghost kitchen could be the answer to fulfill your dreams of feeding the masses with your culinary talents.
Or maybe you're a current or hopeful restaurant owner and feel the time for action has arrived. Opening a dine-in restaurant in today's climate presents numerous challenges. That said, once the pandemic is behind us, these restaurants could see a considerable increase in regular business.
Whether you open a traditional dine-in restaurant or a ghost kitchen, there's no doubt that you will need to rely on online orders for a solid percentage of your income. Thus, it's important these orders are handled efficiently and swiftly, otherwise you risk damaging your reputation and losing out on customers.