Business & Finance

What Is Ghost Kitchen? How Can You Start One?

What Is Ghost Kitchen? How Can You Start One?
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If you are interested in the food industry, you’d already know by now that ghost kitchens are the talk of the town. Known by many names such as dark, cloud, delivery, shadow, and virtual kitchens, ghost kitchens are a new concept that emerged in the past few years.

However, in 2020, the COVID-19 pandemic made it legit and even an alternative to a full-fledged restaurant.  But, what is a Ghost kitchen exactly? How are they structured? And how can you start one? Here’s an all you ended to know guide; let’s begin! 

What Is a Ghost Kitchen?

To put it simply in one line, ghost kitchens are restaurants without dining space. Their sole focus is to fulfill online orders from third-party apps such as DoorDash, Grubhub, UberEats, or their own delivery service. Thus, they don’t have a visible storefront and just a food preparation facility with no dining room, no waiters, and no parking lot. 

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Why Are Ghost Kitchens Booming?

Pre-pandemic, it was common for masses to order in once or maybe twice a week. Gen Z, on the other hand, ordered food more than three times a week, according to the Nation’s Restaurant News. 

The food ordering numbers went significantly up due to COVID because of the reduced capacity of the restaurants and patrons not willing to step out. Regular restaurants made the most of the situation and started a delivery-only service without losing money on the unused dining space. 

The rise of the gig economy has also propelled Ghost kitchens. These kitchens can hire freelance delivery people at a small cost compared to third-party apps such as UberEats or GrubHub.  

The concept of ghost kitchens is still evolving and a ghost kitchen can still be considered an umbrella term. That being said, here are a few ways a ghost kitchen brand can be structured:

Sharing a Commissary Space

Ghost kitchens are for delivery purposes only and are not located within a restaurant. In one kitchen there may be several shared kitchens functioning simultaneously, or there may be several in-house brands managed by a single team. 

Launching Online “Spin-off” Brands

A few dine-in restaurants are launching delivery-only restaurants by leveraging their current kitchens. With this, the restaurants can continue their dine-in business, as usual, they can also run several ghost kitchens as delivery-only. 

Renting Out Your Current Kitchens 

Some restaurants are renting their kitchens to other delivery-only restaurants to start a ghost kitchen that is in need of space and equipment. Renting out the space creates an additional revenue stream for the current restaurant. 

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How Do I Start a Ghost Kitchen Brand?

A Ghost kitchen can be uncharted territory for a lot of people as it is a relatively new concept. It can be simpler than a conventional restaurant in some ways but there are still some complications. If you are interested in setting up a ghost kitchen, follow these guidelines: 

1. Do Your Research

There is no template to start a ghost kitchen as of now, so you might have to get creative while looking for resources like employees, vendors, and equipment. You could also read blogs or get in touch with other ghost kitchen owners to learn from their mistakes and successes. 

2. Find Your Space

Even though the location does not matter for a ghost kitchen, you still have to think about the space appropriate enough for cooking. Are you going to share a space? Are you going to rent it? Or are you going to your own facility? After that, you have to think about comfortable cooking conditions for the staff, supplies, insurance coverage, safety inspections, and more. 

3. Create Your Menu

When you don’t have to worry about the location and the ambiance, your menu becomes the main attraction. Create a wonderful menu by keeping the competition in mind. Try to stand out from the crowd and make your food takeaway friendly. 

4. Build Online Presence and Reputation

To increase customer loyalty, establish an online presence by building a website, and creating social media accounts for your ghost kitchen. Posting regularly with engaging content is the best way to entice potential customers who are hunting around on Google or social sites!

Remember that you need to share both contact information as well as operating hours so they can easily find what time slots work great with their schedule. Make sure you request users to publish reviews on your Google Business Profile, Facebook, Yelp, and other trusted sites.

5. Take Care of Your Finances

Large-scale restaurants around the world have legal and compliance teams to give them a credit workflow advantage. Smaller operations didn’t have this advantage, until now. 

Ghost Financial redefines what is a ghost kitchen. With the first-ever cash-back credit card for food and beverage inventory, ghost kitchens can get 1 percent cash-back on your inventory expenses. Ghost Financial gives you freedom from operating on cash, which is one of the fastest ways to kill a balance sheet. This 1 percent cash-back can be pretty lucrative. For instance, if a ghost kitchen spends $40,000 a month on inventory, they can easily get $400 cash-back which can be further reinvested in the business. 

Ghost Financial uses an AI algorithm to make accurate and quick financial decisions that provide revenue-generating incentives such as cash-back. Moreover, the Ghost Financial platform provides a low-risk way for emerging ghost kitchens to enter a market and effectively expand afterward. 

Not only this, Ghost Financial is developing API integrations with delivery apps such as DoorDash and point-of-sale systems such as Toast to draw metrics that represent hourly and daily sales, operational health and efficiency, average food preparation times, and ratings and reviews to determine credit limit

What Is the Difference between a Ghost Kitchen and a Dark Kitchen?

Ghost kitchens are often referred to as dark kitchens, cloud kitchens, or virtual kitchens. These kitchens don’t have dine-in space and are only available online with third-party apps such as DoorDash, GrubHub, and UberEats. 

How Does the Ghost Kitchen Concept Work?

Ghost kitchens are just food preparation facilities with no dining room, no waiters, and no parking lot. They are delivery-only restaurants and hence their menus are only available to customers that require delivery.

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Starting a ghost kitchen is not an easy undertaking. Apart from choosing the space and writing the menu, finance is an aspect that can go sideways pretty fast. That’s where companies such as Ghost Financial come in. With their cutting-edge platform and first-ever cash-back credit card for food and beverage, they are going to turn the restaurant industry on its head. 

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