The Rise of Ghost Restaurants

The Rise of Ghost Restaurants

Restaurant delivery and its benefits

As we’ve explored a few times now, food delivery is an important aspect of food tech. Since eCommerce began to boom in the 1990s, food delivery has also become more and more prevalent across the world. From grocery deliveries to fast food, people everywhere are chowing down on food delivered straight to their door.

Of course, we’re human beings. Nothing’s ever good enough – there’s always a way to reinvent the wheel, or to add onto it little indents that make it work better. Could restaurants not make more money by delivering their food? Well, absolutely! Do smaller restaurants not save money? A smaller building means cheaper rent or tax. What about a restaurant that cuts all the “unnecessary” parts off, such as dining rooms, tables, guest bathrooms, guest parking, the list goes on…

Join us as we explore just what ghost restaurants are and why they’re worth the investment.

What is a ghost restaurant?

If a restaurant without any of the unnecessary bits piqued your interest, you’re in for a treat. A ghost restaurant, sometimes known as cloud kitchens, virtual kitchens or delivery kitchens, are just that. Ghost restaurants or kitchens are facilities where food is prepared for delivery only. No money is spent on dining areas or guest facilities as the buildings aren’t designed for guests to dine at.

The Rise of Ghost Restaurants

Ghost restaurants and ghost kitchens: the difference

You might hear that ghost restaurants and ghost kitchens are different things – and they are, in essence – but they’re mostly the same thing.

The main difference between a ghost kitchen and a ghost restaurant is branding. As you might have guessed, a ghost restaurant carries a specific restaurant name. For example, Outback Steakhouse’s ghost restaurant Tender Shack specifically carries the Outback Steakhouse brand. On the other hand, any unbranded ghost kitchen acts as a meal preparation facility. A number of restaurants can rent the same ghost kitchen and prepare food there at the same time. For more established and specialised brands, a ghost restaurant may prove to be the most convenient as they can pick and choose their tools specifically for their food.

Aside from that, they share similar features. Both may have parking spots not just for staff but for deliverers. Both also lack any inside seating as they focus solely on delivery.

What are the benefits of ghost restaurants?

There’s a reason that so many restaurants are investing in ghost kitchens. Even McDonald’s decided to jump in on the action when it opened its first ghost kitchen in London back in 2019. If you’re not sold just yet, here are a few reasons why ghost restaurants are taking off:

1. Less space, less rent

The Rise of Ghost Restaurants

If a restaurant only needs the kitchen to prepare the food, they won’t need space for a dining area or any other customer facilities such as toilets or waiting areas. Your restaurant can afford to use a smaller building which means saving on rent and tax. Less rent and tax mean a greater ROI.

2. Save money on staffing

Does greater ROI sound good? If no guests dine inside your establishment, you don’t need waiters or waitresses or cashiers. Depending on the size of your ghost kitchen, you might even be able to save money on fewer cleaning staff.

3. Less waste

A single ghost restaurant can deliver to several places and presents the chefs with the opportunity to use as much food as possible to serve a number of people who otherwise might not have dined at your establishment. Furthermore, as customers will be enjoying the food from the luxury of their own home, they’re more likely to save leftovers for a later point, decreasing food wastage.

4. Get ahead of the competition

If big names such as McDonald’s and Outback Steakhouse are opening up ghost restaurants, it’s safe to say there’s a good reason. As more people open up their own restaurant or join a kitchen, there’ll be increased competition. By taking part yourself (sooner rather than later), you’ll already have a head start in a well-established market.

5. Better locations

When you’re setting up a brick-and-mortar restaurant, location is important. It needs to be somewhere easily accessible, somewhere on show, and (preferably) somewhere cheap. Of course, if you’re looking for a great place to set up, chances are you’ll be paying quite a lot to set up in a city centre. This isn’t an issue with ghost restaurants as customers don’t need to visit the establishment themselves, and advertising can still be done in busy places such as a city centre without the kitchen being there. This means your restaurant can be placed somewhere out of the way where rent is cheap with no loss of business.

The Rise of Ghost Restaurants

What are the disadvantages of ghost kitchens?

As with anything in the world of food tech, ghost kitchens have their fair share of challenges. Since your facility focuses solely on delivering, you’re far more likely to make delivery mistakes that present a customer with the wrong order. Of course, if this happens in a brick-and-mortar restaurant, the customer can raise the issue immediately and have their correct order made. With ghost restaurants, this isn’t as straightforward and may lead to several negative reviews.

Furthermore, the standards of food may be inconsistent. Deliverers may need to visit multiple places with different meals, resulting in late deliveries and cold food.

That being said, long delivery times (to an extent) are somewhat expected by many understanding customers and doesn’t completely ruin the dining experience.

There are many reasons a restaurant might be looking to open up a ghost kitchen, and several benefits that come with it. In fact, many places have been functioning just like ghost restaurants throughout the pandemic, delivering food from their restaurant in lockdown while they cannot fully reopen. It won’t be surprising if many businesses now realise the opportunities presented by ghost kitchens and restaurants, and open one of their own even as the pandemic comes to an end.

If you’re interested in reading more about food delivery and the greater world of food tech, be sure to check out the rest of our blog at Food Tech Digest!

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