TL;DR - What Is a Ghost Kitchen?

The world of restaurant innovation has never seen such immense changes as it did to survive the the eventual lockdown following the COVID-19 pandemic. Necessity drives invention and the current focus for many brands both large and small is getting on board with the virtual kitchen trend, otherwise known as ghost kitchens.

Ghost kitchens are the embracing of the off-premise dining customers have had to adopt while restaurants adhered to safety requirements meaning dine-in was essentially dead during lockdown. Now companies are able to take the delivery-only side of business and utilize much smaller buildings as they'll only need to house the kitchen.

Choosing to ride the wave of delivery and takeout only opened the eyes of restaurants to the possibility of expansion through untraditional means. Ghost and virtual kitchens get rid of the dining area and only have a kitchen and staging area for delivery drivers to pick up orders. Some do opt to have a small storefront with no seating, allowing customers to personally pick up their food instead.

As with any sweeping change, there are many names that ghost kitchens go by depending on who you ask. They all are meant to mean a kitchen that utilizes restaurant tech to operate without the need for dine-in services. You'll likely see them referred to as:

  • Virtual Kitchen
  • Dark Kitchen
  • Ghost Kitchen
  • Virtual Brand
  • Pop-up Restaurants

It's common practice for a ghost kitchen start up to utilize delivery partners such as Grubhub and DoorDash to fulfill orders, allowing the kitchen to focus more on productivity and quality for each order received. One benefit of this is that most delivery apps can integrate directly into a compatible restaurant SaaS, keeping order activity together in one spot.

Behind the Scenes of a Ghost Kitchen's Operations

Most of us have seen the tiny sliver of building that restaurants were able to use to stage their pickup and delivery orders allowing for contact-free order fulfillment. A door on the side of a building, away from the dining area and with only cooks and one or two employees running orders and the manager taking care of order tracking.

Now, take that small snapshot of a restaurant's operations and turn it into the whole picture. Ghost kitchens are exactly that, bringing many brands the option to expand into new markets at lower costs by helping to reduce:

  • Monthly rent for the commercial kitchen by sharing it with other restaurants
  • Salary and wages due to having no wait staff
  • Upkeep and building maintenance costs
  • Operational costs through use of third-party services

It's also not uncommon for some companies to create additional virtual brands to operate out of their kitchen. Virtual brands exist only in name and branding with the parent company owning both the virtual brand and the brand that owns the kitchen it operates out of. The practice allows established restaurants to test the waters of new cuisine without their existing legacy impacting the reception of new dishes.

What Setting Up a Ghost Kitchen Looks Like

Off-premise dining has seen such a huge surge in popularity that some companies are seeing their success reach new heights compared to where they were prior to the pandemic. The lockdown prompted restaurant tech companies to expedite the progress being made on the fronts of food delivery platforms and restaurant SaaS.

After of more than a year of the virtual kitchen trend, ghost kitchen start up ventures have evolved into four styles of business model. Kitchens will fall under one of the following:

  • Independent - A company decides to start a ghost kitchen using a private kitchen space only they have access to. Often times independent kitchens will add a pickup area to reduce fees brought on by using third-party delivery apps.
  • Shared Kitchen - Having larger commercial kitchens available for multiple companies to use reduces costs and upfront investment. The practice is also common in food halls which are large-scale venues meant to facilitate multiple restaurants and their order fulfillment.
  • Virtual Brands - This style uses another company's kitchen to prepare orders in, giving dining establishments that don't use their kitchen around the clock a way to generate more income while providing a cost-effective kitchen to another brand.
  • Brand Partner - Kitchens looking to minimize their upfront costs may choose to sign on with a delivery company to help facilitate the launch of their kitchen. Partnered kitchens can only go through their chosen delivery app for accepting orders.

Eventually the time will come when an aspiring chef wants to take their passion and turn it into a career, looking to ghost kitchens for a budget-friendly way to break into the market. While making a ghost kitchen profitable can be a challenge, there are more and more alternatives to the big delivery platforms emerging to give kitchens more affordable options for order fulfillment. It's never been a better time than now to explore starting a ghost kitchen so strike while the iron's hot!

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