How can you tell a ghost kitchen?

Ghost kitchens are essentially restaurants with no space to eat. Its purpose is to sell and fulfill orders for food online for delivery using third-party applications such as Grubhub, UberEats and DoorDash, or with its own delivery operation. As a result, they usually don't have a visible showcase. The term ghost kitchen classifies food service companies without dining areas that offer delivery and, occasionally, takeaway food.

Sometimes referred to as ghost restaurants, virtual kitchens or satellite kitchens, ghost kitchens use third-party delivery services to receive orders and get meals to customers. In short, ghost kitchens are physical spaces for operators to create food for consumption outside the facility. And in apps like Grubhub and DoorDash, listings of restaurants that operate with ghost kitchens don't usually look different from traditional establishments. For example, where I live in Northern Colorado, there's a restaurant called Rocco's Ravioli that appears on apps.

But Rocco's doesn't have a shop window. It's a food delivery service that makes food in a ghost kitchen. The ghost kitchen can also help your flagship restaurant operate more efficiently by moving all food deliveries off the premises. Since the 5-mile radius around your ghost kitchen is your customer base, it's extremely important to choose a location that suits your company's target audience.

Many grocery stores, including Walmart and Kroger, are also adopting the business model of operator-managed ghost kitchens. According to Greenspan, the possibilities of using ghost kitchens and home delivery as a marketing tool are endless. Yes, we've heard a number of success stories about restaurants that have implemented the ghost kitchen model. Some small food operators used ghost kitchens to gain a foothold in the market at a time when opening a standard restaurant with a dining room would have been unthinkable.

With a ghost kitchen, you rent from an owner in facilities such as Kitchens United or Cloud Kitchens, which are usually found in densely populated areas. If you're like Eric Greenspan, Cassia or Canter's, ghost kitchens could be a great way to expand your brand. Getting on the ghost kitchen bandwagon can be a monumental decision for the future sustainability of your business. When starting a ghost kitchen business, it's an extremely important decision to do a market study of the surrounding areas.

As a newcomer, at first you may not be able to compete with the big brands when it comes to pricing, as you probably won't meet bulk order discounts or spend more than them on advertisements, but there's no better way to learn than by doing, and, with such a low risk, it's no wonder that so many beginners choose to open ghost kitchens instead of crowded restaurants. As with any major business decision, the pros, cons and potential pitfalls are things you should consider before investing money in a ghost kitchen. While the high fees charged by major delivery services could be mitigated or included in the price, food delivery companies that work in ghost kitchens could find a way to make a living. As you can see, this means that ghost kitchens rely 100% on third-party delivery apps, such as Postmates, UberEats and GrubHub, to receive orders.