Do you often order food for delivery through apps like GrubHub or DoorDash? If you do, there’s a pretty good chance you’ve unwittingly purchased food from a ghost kitchen.
“Ghost kitchens” might sound creepy, but they have nothing to do with the paranormal. A ghost kitchen is simply a “restaurant” that prepares food for delivery only, with no accommodation for sit-down or take-out customers.
Ghost kitchens are a big business and getting bigger. The concept has spawned an entire cottage industry that includes hundreds of thousands of food entrepreneurs along with venture-backed service providers like CloudKitchens, whose all-star co-founding team includes serial entrepreneurs like Sky Dayton.
The ghost kitchen trend affects everyone who needs to eat, not just foodies. Here’s what you need to know about it and how it’s already changing the restaurant industry.
What Are Ghost Kitchens, Anyway?
Ghost kitchens are also known as virtual restaurants or cloud kitchens and by some other less common names too. An individual ghost kitchen is equivalent to an individual restaurant, but it’s more likely to share food preparation space with other users (often other ghost kitchens).
Most ghost kitchens share these key features:
- No physical location that’s open to the public
- No sit-down or take-out service
- Reliance on delivery personnel who usually work as third-party contractors for multiple ghost kitchens rather than employees of a single ghost kitchen
- Reliance on mobile delivery apps like GrubHub and DoorDash
- Lower operating costs, though app fees can eat into profits
Some ghost kitchens also have traditional brick-and-mortar restaurant locations. Often, the ghost kitchen comes first, and then the operators open a second location with sit-down or take-out service as they find traction.
Who Uses Ghost Kitchens?
Ghost kitchens tend to have lower overhead expenses and smaller menus than traditional restaurants. Not surprisingly, they appeal to food entrepreneurs who don’t want the expense or headache of operating a sit-down eatery.
But that’s a pretty broad group of people, and they’re not the only ones who use these kitchens. Other ghost kitchen users include:
- First-time restaurateurs with limited capital
- Operators who want to try out new concepts in a lower-risk environment
- More experienced restaurateurs who want to add delivery to existing restaurants without overloading the kitchen
- Experienced restaurateurs moving into new cities or new parts of a bigger city
- Food entrepreneurs who want to launch multiple concepts simultaneously without having a food truck or physical location for each
Are Ghost Kitchens the Same As Commercial Kitchens?
The “ghost kitchen vs. commercial kitchen” distinction is a confusing one for many people who aren’t food industry experts. The easy answer is that ghost kitchens often use commercial kitchens to prepare food, but not all commercial kitchens are ghost kitchens.
And what are commercial kitchens, exactly? Basically, they’re licensed food preparation hubs where individuals or businesses can rent space (or time) to make food for resale. Anyone can use a commercial kitchen if they’re willing to pay for it, but to sell food made there, you may need your own permit from the local health department or business licensing division.
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Can You Start a Ghost Kitchen Business?
In conclusion, an answer to the question that’s been on your mind this whole time: can you start a ghost kitchen business yourself?
The best answer to this question is actually another question: how badly do you want it?
If you’re seriously thinking about opening a restaurant, or you’ve watched restaurant-themed shows like The Bear, you know that running a food service business is hard work. Really hard work. Opening a ghost kitchen is a bit less complicated and maybe less expensive too, but it’s still no walk in the park. Not even close.
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