On the Line / Operations / What is a Ghost Kitchen?

What is a Ghost Kitchen?

Don’t let this buzzword spook you – we’re taking the mystery out of ghost kitchens.

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Ghost Kitchen vs Cloud Kitchen vs Virtual Restaurant

DISCLAIMER: This content is provided for informational purposes only and is not intended as legal, accounting, tax, HR, or other professional advice. You are responsible for your own compliance with laws and regulations. You should contact your attorney or other relevant advisor for advice specific to your circumstances.

What are Ghost Kitchens?

Ghost kitchens, also known as cloud kitchens, forgo table or counter service for 100% delivery. The customer might never know who’s preparing their takeout burger, which is why the mysterious “ghost kitchen” moniker is spreading like wildfire.

Ghost kitchens either operate a 100% delivery restaurant or dedicate a portion of their brick-and-mortar restaurant to producing food built to travel. Whether trying something new with a pop-up or slinging tested staples, a ghost kitchen offers opportunities for growth and expansion.

Virtual restaurants aren’t the VR eateries you’re thinking of, where you can be immersed in a digital world while eating dinner. That doesn’t mean they aren’t just as cool and a great tool for your restaurant. Virtual restaurants might help you make the most of your kitchen’s take-out window.

We're providing everything you need to know about delivery-focused virtual restaurant brands and concepts with this detailed guide.

This detailed guide gets up close and personal with real ghost kitchens to unveil their mysteries:

  1. What is a Ghost Kitchen?
  2. How do Ghost Kitchens Work?
  3. What are the different kinds of Ghost Kitchens?
  4. How can a Ghost Kitchen help my restaurant to grow?

Why are Ghost Kitchens growing in popularity? What are the trends helping this growth?

Delivery-only restaurants became popular as food service markets adapted to the COVID-19 pandemic. Customers demanded delivery options, and delivery services partnered with restaurants to create excellent experiences.

Virtual restaurants and other delivery-only concepts fill an important niche in local foodways – they help customers who can’t or prefer not to return to restaurants in-person access great meals.

As people extend their work-from-home indefinitely, there’s more demand than ever for convenience. Delivery-focused virtual restaurants provide options at all times of the day, from breakfast to late night snack.

On top of that, the delivery-only model is flexible and encourages creativity and experimentation. Chefs who want to play with new flavors, textures, and cuisines can test them with less risk. 

Ghost kitchens provide flexible solutions for targeting specific delivery markets, so you can reach them with your tested brand to deliver a new experience.

What are the advantages of a Ghost Kitchen concept compared to a traditional restaurant?

Ghost kitchens don’t have to worry about a lot of the costs of keeping up a dining room – there’s no need for decor, repairs, cleaning, or FOH. That frees you and your staff up to focus on preparing great food for delivery.

Marketing for your brand is built into the business model, so you don’t have to worry about attracting customers to your storefront. Just be sure to list your ghost kitchen brand on all the popular local delivery apps.

Since there’s no branded storefront, ghost kitchens have the flexibility to test menu items or even full brands from their kitchen space. 

What are the disadvantages of a Ghost Kitchen concept compared to a traditional restaurant?

Keeping customers at a distance is a disadvantage for finely-tuned restaurant brands. Ghost kitchens require business owners to relinquish a lot of control over the guest experience.

The absence of a dining room full of picky customers might seem like a dream to some restaurant owners, but sometimes the personal elements are what makes a restaurant successful.

Building dishes that travel well also means not having complete control over the menu. You can’t put sea kelp foam in a to-go box and expect it to be presented thoughtfully to the customer 40 minutes later.

Differences between Ghost Kitchens and Virtual Restaurants

If ghost kitchens and cloud kitchens are delivery-only restaurant concepts, then what are virtual restaurants?

Virtual restaurants are ghost kitchen concepts that are operated in brick-and-mortar restaurants. The concept and menu is tailored to delivery just like ghost kitchens, but from the familiarity of their restaurant’s storefront.

The main difference is that ghost kitchens are delivery-only, whereas virtual restaurants operate from a hybrid dine-in and delivery space.

How does a Ghost Kitchen work?

Logistically, delivery-only restaurants take advantage of the popularity of third-party delivery services to create or expand operations. 

  • Your shared kitchen, commissary, or kitchen pod sets up an online store with menu items you can prepare for delivery.

  • Partner with third-party delivery services and list your ghost kitchens on app marketplaces.

  • Your ghost kitchen prepares meals and hands them off to delivery drivers.

Plated to Deliver

Let’s face it – that pork entree with the perfect balance of profit and pizzaz won’t pack the same punch in a plastic takeout tray. Ghost kitchens craft menus that deliver a restaurant-quality experience at home.

Think about things like the temperature of your dishes – the toastiness of the bun or the crust on that steak – and how the construction will hold up in transit. Craft a menu that lets you deliver great experiences to keep customers ordering more.

What are the different kinds of Ghost Kitchens?

Commissary or Shared Kitchen

The most common type of ghost kitchen is run from commissaries or shared kitchens – fully-loaded prep and cooking spaces without a branded storefront. There may be shared kitchen spaces available for rent in your area that are specifically designed to be ghost kitchens.

Incubator or Pop-up

Culinary masterminds like to be able to test recipes and concepts in low-risk environments.  Ghost kitchens are perfect for testing a limited run of a menu or restaurant concept.

Customers interface with ghost kitchens entirely online, which can make it easier to get customers to provide feedback about the food or brand. So, ghost kitchens and virtual restaurants provide another option for business owners looking to test everything from dishes to entire brands.

Kitchen Pods

Also known as “dark kitchens,” kitchen pods are pre-fabricated, plug-and-play kitchens that, once purchased, can be set up in almost any retail space. They come with all the equipment and storage you need to install your ghost kitchen concept.

Kitchen pods can make ghost kitchens accessible to new business owners. And with the right concept, ghost kitchen pods have the potential to shake up the local delivery scene. 

How can I start a Ghost Kitchen?

Building a delivery-only ghost kitchen from the ground up requires the same research and planning as a traditional restaurant:

  • Conduct a market analysis – before you build a business, you want to check out the competition and local demand for your concept.

  • Build a business plan – business plans set you up to respond to all of the risks and contingencies that come with operating any kind of food service business.

  • Hire and/or train a staff – ghost kitchens might be able to run on skeleton crews, but be sure that you have enough skilled people for your business to operate consistently.

  • Build a sample menu – for testing, training, and fundraising.

  • Finance your ghost kitchen – while the startup costs don’t include a dining room, the right financing ensures a ghost kitchen’s success.

Your state, county, or city might have special laws about the delivery of prepared food, so be sure to research the laws in your area.

Head over to our full article on how to start a ghost kitchen for a detailed guide to writing a ghost kitchen business plan.

How can a virtual restaurant help my restaurant to grow?

When you operate a ghost kitchen out of your existing restaurant, you gain access to a section of the market that is different from who you serve in your restaurant. You’ll sell different food to different people and gain new, loyal customers.

Ghost kitchens stand out on delivery marketplaces because their menus and prices match the market – i.e., the needs and wants of a section of consumers.

Examples of Ghost Kitchens

Sam’s Crispy Chicken is one of the brands owned and operated by C3 or Creating Culinary Community, which operates several other virtual brands like Umami Burger and Krispy Rice. Some common features of C3 brands focus on simplicity paired with clever culinary fusion.

WowBao is an Asian street food brand that started in Chicago but was able to rapidly expand into 500+ dark kitchen and ghost kitchen locations. Steamed buns don’t require much equipment to prepare. Plus, their simple branding ensures they succeed in every market they reach.

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