Ghost Kitchen - is it a good business idea? | Papu.io

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Ghost Kitchen - is it a good business idea?

Nowadays, the gastronomic market is developing at an alarming pace. There are more and more interesting solutions, and some of them can be called … pioneering! One of the ideas that have been gaining popularity recently is Ghost Kitchen.

Many names, one place!

What is Ghost Kitchen anyway? Cloud, Ghost, or Dark Kitchen – You can find it under many names, but it means one place where you can prepare many personalized meals for delivery.

Is Cloud Kitchen here to stay, or is it a temporary trend?

So what is it supposed to look like?

Companies that want to gain more clients and meet the demand for deliveries do not have to invest in a bigger restaurant space – all they need to do is to enlarge their kitchen or rent it. Virtual restaurants are focused only on delivery.

As the concept is still evolving, there is no exact definition of this phenomenon. There are many types of virtual restaurants, and in many cases, a business named this way may function in a completely different way. 

With that in mind, there are a few common ways to organize a ghost kitchen, and here are a few of them:

  1. Use of common spaces
    The kitchens are not located in the restaurant and are therefore intended solely for delivery. Several independent brands can use a shared kitchen at the same time. Another solution is multiplying restaurant brands that can be run by a single management team.
  2. Launching virtual “spin-off” brands
    Some on-site restaurants are running virtual delivery restaurants using their current kitchens. While your restaurant could continue its normal business, there could be a spin-off restaurant operating in the same kitchen, but selling dishes only for delivery.
  3. Rental of restaurant kitchens
    Another trend we are seeing: some restaurants are renting their own kitchen to accommodate ghost restaurants that need space and equipment, creating an additional revenue stream for gastronomic establishments that may experience lower sales due to Covid.

What are the benefits of running such a business?

Virtual kitchens are a way for restaurants to take advantage of the boom in delivery orders without losing money on unused dining space and all the costs associated with its maintenance. In addition, the costs spent on waiter service can be used to hire the best chefs.

How are customers reacting?

Ghost kitchens are rapidly gaining ground for a number of reasons.

One of them is the current pandemic situation. During the rising tide of Covid-19, there has been a huge increase in delivery orders. Research shows that over 60 million Europeans order food online. Don’t the statistics speak for themselves?

Any catch?

As you know, each solution has its pros and cons. Before implementing the changes, it is worth considering the advantages and disadvantages of the given solutions.

Pros

  • Low costs
    As mentioned earlier, a Ghost Kitchen restaurant is associated with lower costs. Rent usually takes the lion’s share of restaurateurs’ expenses. Ghost restaurants do not have to invest in furniture, decor, or waiter service, which significantly reduces operational costs.
  • Comfort
    Only using the delivery options is much more convenient. You no longer have to worry about service, on-site orders, cleaning tables, and many other issues. Thanks to the cloud system, you can focus on what every restaurant should do – serving delicious food!
  • Additional revenue streams
    Restaurants have the opportunity to generate additional income by renting kitchen space to external ghost establishments or by opening a spin-off restaurant serving only deliveries.
  • Elasticity
    Ghost kitchens can quickly adapt to changing market conditions or customer preferences. Only the menu offers on the website change – you avoid changing the menu card, decor, and training staff on new dishes.

Cons

  • Additional costs
    If your restaurant does not have its own drivers, running a ghost restaurant will require you to hire new staff responsible for delivering orders.
  • Brand awareness challenges
    While online visibility can help a restaurant, it also has to compete with the hundreds of other restaurant brands that are also found there. And because they all deliver, it means that differentiators – such as downtown location or pretty decor – will not necessarily influence the customer’s decision.

How to implement such a solution?

If you’re interested in starting your own Ghost Kitchen restaurant, you’re probably wondering how to get started. While it’s simpler in some ways than starting a traditional restaurant, it’s also a relatively new concept – meaning there are a lot of things you need to think about.

  1. Learn from someone else’s mistakes
    Unfortunately, no one has created the perfect recipe for success, sometimes it takes a lot of effort to achieve the desired effect. However, there are things that should definitely facilitate the decision-making process and reduce the number of mistakes made. It is worth seeking advice from restaurateurs who are experienced in this topic. Contrary to appearances, the subject of Ghost Kitchen is not a figment of recent months. There are definitely people who will be happy to tell you about their experiences!

    You can find lots of useful advice on Facebook groups.

  2. Have an idea and a concept
    With a virtual kitchen, you don’t have to worry about location or service. Now your menu will attract customers. Think about how you want to stand out from other restaurants – create an interesting and consistent menu that you will not be able to tear yourself away from! If You want to find out how to create a well-structured menu, take a look at our previous blog post: How to choose the right pricing strategy for a restaurant?
  3. Find your space
    You don’t have to worry about the location anymore, but the premises are important nonetheless. Remember that your restaurant’s kitchen should be large enough to provide comfort to people who prepare meals.
  4. Technologies are your best friend
    Be sure to create a marketing plan with a strong emphasis on digital technology. Social media, digital advertising, and a polished website – will definitely help you promote your business.

    It is worth considering additional amenities, such as a POS system, which facilitates the process of placing orders and delivery. You can read more about it in our previous blog article.

Does it have a future?

By 2030, Euromonitor predicts Ghost Kitchen will create a global industry of 1 billion dollars.

Already last year, the industry closed capital investments worth 55 million dollars, and large brands are increasingly using this type of solution.

Is Ghost Kitchen for you?

If you love making food, and You are struggling with the high cost of renting a premises, this is an option worth considering. Remember that the POS System can help you a lot with organizing deliveries, thanks to which you will be able to better control the work of your employees and you will always know what is happening in your restaurant. Try the Papu.io system for 2 weeks for free! Fill out the form and we will contact you!

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