Ghost Kitchens Explained

Ghost kitchen: It’s the buzzword on everyone’s lips in the restaurant industry lately. But what exactly is it? Basically, it’s a commercial cooking space rented by either virtual restaurants or traditional restaurants. They exclusively focus on creating food to be delivered to customers. Unsurprisingly, interest in them has surged since the onset of COVID-19. However, this trend has actually been growing and attracting investors for years now. So why are they so popular, and what does their future look like?

It’s A Head Start for New Restaurants

Low overhead costs make ghost kitchens particularly appealing for businesses of all sizes. But they especially give new restaurant brands a leg up in their start-up phase. Restaurant owners need less upfront capital since they won’t need to hire front of house staff or pay rent on space for a dining room. With reduced overhead, there’s less standing in the way of passionate restaurant owners to enter the market.

Most startup restaurants will take advantage of one or more of the many delivery apps available. This automates the entire customer service aspect of running a restaurant. So new restaurants can put more of their focus on producing delicious food. This means customers have even more access to unique chef-driven concepts.

They Let Existing Brands Branch Out

Ghost kitchens are useful for existing brick-and-mortar restaurants looking to experiment and try new things. They can use ghost kitchens to break into new neighborhoods that might be too financially risky to invest in a dine-in space. They can also create hyper-specialized menus for certain areas, or even brands-within-brands, to target specific customers without muddying their existing brand image or overcomplicating their current operations.

Some larger, more established brands have even cut out the delivery middle-man and created their own proprietary apps with in-house delivery people. And since most orders are placed online, customers probably have no clue that their food was prepared in a ghost kitchen, not the brick-and-mortar location.

The Drawbacks

Marketing a brand with no physical footprint is a tall order. Some third-party delivery apps help out by suggesting brands based on customer searches. However, this approach only reaches existing app users. Virtual restaurant brands need their own strong web presence to engage more customers.

On top of that, quality control is much more logistically complicated than it would be in a traditional restaurant. Because of this, there is even less margin for error in the kitchen. Kitchen management and staff need to have a high level of attention to detail. Adding to that, ghost kitchens using a delivery have even less control once the food leaves the facilities. They have no say in the delivery route, food handling, and customer communication.

What’s Next for Ghost Kitchens?

While ghost kitchens certainly won’t replace brick-and-mortar restaurants entirely (how else will people post pictures of their beautifully plated meals to Instagram), we will still see more of them after the pandemic. Since these kitchens focus entirely on preparing food to go, they were already poised for success goin into the pandemic. Their menu items were already developed with transportability in mind. The low overhead and payroll expenses kept profit margins and staffing stable. And, ghost brands with an strong customer base can consider opening a brick-and-mortar location in the future.

When Should a Restaurant Consider a Ghost Kitchen?

There are so many factors to consider, and restaurant owners need a clear direction and strategy. Since traditional front-of-house roles would be obsolete, having talented culinary, marketing, and operational management becomes even more central to the success of the business. The restaurant recruiters at Horizon Hospitality have access to the top talent in the industry and can help virtual restaurants and ghost kitchens keep up with the growing demand for food delivery. Contact Horizon Hospitality to learn more.

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