Business

Understanding Ghost Kitchen Business Models

Understanding Ghost Kitchen Business Models

The ghost kitchen is a relatively new concept in the restaurant industry.

With more and more people choosing ordering out over dining in, restaurants have started looking at establishing virtual kitchens that can be a whole lot affordable and efficient.

Virtual kitchens are kitchen spaces with fully integrated technology solutions that can help restaurants overcome their food preparation challenges in the delivery boom.

These companies collaborate with restaurants and locate their kitchens based on their customer preferences.

The food will be prepared and delivered fast and fresh, without any mistakes on orders.

 

  1. Benefits of Ghost Kitchens

Whether you are starting a new ghost kitchen or adding one as a side operation to your restaurant, you can reap many benefits while lowering your costs and reducing your footprints.

Here are a few that you can consider:

  • Minimal Operation Costs: By starting a ghost kitchen, you can minimize your expenses by renting out a larger space, labor cost, decor, and remodeling.
  • Lower Risk: Since a ghost kitchen is all about delivering food, the upfront expenses that you would require to launch your venture would be very low. It could be an excellent option for start-ups and small restaurants.
  • Higher Profits: Since the operation costs are low, the profits will be higher in the case of ghost kitchens. These profits can be used to offer more competitive pricing to your customers.

You can use your existing staff and even use an unused portion of your space for food storage and preparation.

The incremental revenue and learning opportunity for your personnel can make this an exciting and successful venture.

 

  1. The Best Types of Restaurant for Ghost Kitchens

Many restaurants have already started experimenting with ghost kitchens, and a couple of them have also achieved success.

This list includes restaurants with established brands, restaurants that have seen a surge in their take-out orders, and restaurants looking at entering a new market or testing out a new idea that requires them to operate on leaner margins.

  • Oyster Bah has a ghost kitchen called Seaside through which it offers ribs as well as fried chicken to its customers. 
  • Gabriellas offers ghost kitchen facilities to 6 restaurant brands, giving the same American style pizza with traditional toppings. 
  • Chick-fil-A has its own “fulfillment centers,” through which it handles all of its catering and overflow orders.

Chipotle, Inspire Brands, and C3 have also jumped this bandwagon and reaping the benefits of ghost kitchens.

 

  1. Understanding Ghost Kitchen Business Models

There are different models of ghost kitchens you can try, depending upon your budget and resources available.

  • The Single Kitchen-Single Brand Model: A space of about 500 to 600 sq ft. should be good enough to start this kind of ghost kitchen. You will be catering to a single brand without any storefront.
  • The Single-Kitchen-Multi-Brand Model: In this model, you cater to several brands through a single kitchen. You prepare the most-ordered cuisine in a neighborhood where the restaurant options are limited. This also comes with no physical storefront.
  • The Single Kitchen, Multiple Outlets Model: Somewhere between a cloud kitchen and a takeaway restaurant, this model comes with a storefront where customers can view the process of food preparation. You are a single brand with a separate kitchen. 
  • The Multi-Brand Co-Working Kitchen: This is an optimally located ghost kitchen with minimal infrastructure. Many restaurant brands can rent out your space and address their delivery challenges through online ordering apps. They bring the necessary equipment, raw materials, staff members, and recipes. 
  • The Multi-Brand Rented Kitchen With Storefront: This is a rented kitchen with all the equipment and processes. They come with a storefront and cater to multiple brands.

 

  1. Deciding on Delivery

Delivery service forms the last part of a ghost kitchen.

You can start your delivery service or choose from the established platforms.

However, make sure you integrate this option with your Point of Sale Software. 

Most ghost or dark kitchen restaurants prefer to have their delivery services.

However, you need to consider time and temperature aspects if you don’t wish to compromise on the food quality.

 

Make the Right Decision

An optimal space is one of the most critical requirements of a ghost kitchen.

However, you can also work out of an existing commercial kitchen if you want to save on your operating costs.

Explore your options and weigh their pros and cons before making your decision.

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