The Benefits of Ghost Kitchens: How They Solve Restaurant Problems

Running a successful restaurant is no easy feat. From managing staff to ensuring customer satisfaction, there are many factors that can make or break a business. But what if there was a way to reduce costs and increase efficiency? Enter ghost kitchens. Ghost kitchens allow restaurants to outsource the preparation of their takeaway and home meals, without cannibalizing stoves, walk-in facilities and preparation areas needed to serve diners seated outdoors or indoors.

Anyone who has received a cold, soggy delivery on their doorstep knows that delivery is a challenge for many brands. Entrepreneur reports that apps can reduce the cost of each order by 20 to 30%, but this doesn't include credit card fees. Most restaurants operate with small profits, so any loss in their margins can be devastating. This is where ghost kitchens come in.

They are supposed to solve this problem by eliminating other costs, such as additional labor. Ghost kitchens are an easy and inexpensive way for restaurants to grow their business. Making changes to a traditional restaurant takes time, but the speed with which changes can be implemented in a ghost kitchen makes operating one very attractive. Ghost kitchens emerged as a concept half a decade ago, based on the idea that groups could buy or lease cheap real estate and use it to incorporate several independent kitchens, says Phil Colicchio, executive director of Colicchio Consulting. Colicchio explains that ghost kitchens were never going to completely replace restaurants, but they have become “good accessories for restaurants and, in many ways, serve as training grounds for restaurateurs to learn the ins and outs of social networks, collection and delivery operations to third parties”. Ghost kitchens can work with less space and don't need to be in a popular location with a lot of foot traffic. The idea that you would take shoddy real estate and add all this value through ghost kitchen apps was overstated.

Ghost kitchens add the complication of selling under several names on the same platform or on different platforms, effectively preventing poor ratings from health codes. Operators must act with due diligence with the owner of the ghost kitchen, just as they would with any commercial transaction. When restaurants closed so they could eat indoors during COVID-19 and people went on to pick up orders and deliver at home, ghost kitchens became the concept of the day, helping both restaurant operators and retail owners survive the pandemic. Ghost kitchens have many different models that are affected differently by people returning to eating indoors. While ghost restaurants can technically increase the cost of the dishes on their menu, the additional surcharge doesn't make much sense since customer safety is less at risk when ordering at a ghost restaurant. Ultimately, however, the success of most ghost kitchens will be determined by their offerings in terms of convenience and price.

Other major national restaurant chains turned to ghost kitchens during the pandemic due to their lower capital investment. Nowadays, there are more and more ghost kitchens that opt for the concept of a dining room, with a space and access that allow customers to be picked up and delivered in person. Ghost kitchens have a unique opportunity to minimize food waste and reduce inventory costs to be more economical.

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