What Is a Ghost Kitchen and How To Open One

Marketing 20 minute read 18th July 2023

Those in the culinary world know what is a ghost kitchen and how it operates. So, throw away any illusion of spirits or phantoms that may come to mind because of the term “Ghost Kitchen”. If the title of this article led you to believe there is a ghostly cook in the kitchen, rest assured. This is not what the article is about.

It may come as a surprise to know that approximately 1500 ghost kitchens are operating in the United States. They are serving real food to actual people, and the number of ghost restaurants is continuously growing.

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What Is a Ghost Kitchen Concept?

What is a ghost kitchen concept? Many people struggle to understand this. A ghost kitchen trend refers to a specific kind of restaurant that operates solely for delivery or takeout purposes. There is no physical dining space for customers; they just grab and go, or, in most cases, the restaurant delivers. Ghost kitchens are in busy areas where multiple virtual restaurants share space under one roof and operate independently.

Most people find out what is a ghost kitchen through food delivery apps. These ghost restaurants often partner with popular food delivery apps and platforms to reach a wider customer base. So, you can find this restaurant running online, accepting and preparing orders, but without the customer dine-in part. This concept allows for savings on rent and overhead expenses. This makes it an attractive option for both established restaurants and new startups looking to enter the food delivery market.

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History of the Ghost Kitchen

It may come as a shock, but unlike ghost stories, virtual kitchens don’t date back to the nineteenth century. So, the question is, what is a ghost kitchen, and when did it become popular? Ghost kitchens became a hit during the 2000s, but the exact date and year are unambiguous.

COVID, which became a global health crisis, forced many restaurants to close their doors to dine-in customers. Due to this, many eateries went out of business, and unemployment rose. Some were struggling to survive by offering takeout and home delivery. This strategy provided a lifeline, but it wasn’t enough to cover the high rent costs due to empty dining rooms. Many businesses had to close their doors for an indefinite period.

However, the demand for food delivery grew more and more. This customer-based request led to a surge in the popularity of the ghost kitchen trend. Many people did not know what is a ghost kitchen. They only learned about it when the pandemic hit.

As traditional restaurants struggled to adapt, ghost kitchens provided a lifeline for businesses looking to serve customers through online platforms. This sudden rise in demand for virtual restaurants propelled the concept into the mainstream, revolutionizing the food industry.

Ghost Kitchen Meaning Explained

Even after becoming aware of what is a ghost kitchen, the concept is still unclear to many people. It is because the idea is fairly new, and the word “ghost” brings unworldly things to mind. This section is going to explain a ghost kitchen’s meaning by listing down the common features. So, the next time you come across a restaurant with similar traits, you will be able to identify it.

  1. The other name for a ghost kitchen is a virtual kitchen, cloud kitchen, or dark kitchen.
  2. Professional chefs run them.
  3. They operate solely for delivery and takeout orders.
  4. There is no dining or waiting area. Only the virtual dining concept exists.
  5. The restaurant’s website or food delivery services take orders.
  6. Ghost kitchens are in industrial areas or low-rent locations that often house multiple restaurants under one roof.
  7. These kitchens focus on maximizing efficiency by pouring their hearts into preparing a delicious meal.
  8. By reducing their overheads, they can focus on preparing high-quality meals and delivering them on time.

The above eight points highlight the ghost kitchen’s meaning. So, if you ever come across an eatery that claims to be a virtual restaurant, find out its physical location. What is a ghost kitchen physical location? There isn’t one, and if it is true then you can be certain that it is a ghost kitchen.

You can expect taste and efficiency whether you order directly from their website or through a food delivery service. But to be sure, the quality is not up to par, so it’s important to do your research. Check the star rating of restaurants before ordering from ghost kitchens to ensure a positive dining experience.

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5 Ghost Kitchen Advantages

There are plenty of advantages to operating a virtual kitchen, and the pandemic proved it. With numerous large-scale restaurants closing down, ghost kitchens were popping up online. Here are a few advantages compared to traditional brick-and-mortar restaurants:

What Is a Ghost Kitchen - Advantage #1: Cost-Effectiveness

Ghost kitchens often have lower overhead costs compared to traditional restaurants. There is no dining area for customers. Since this type of restaurant industry does not manage customers, there are few staff members. So, these kitchens save money on rent and staff, especially the restaurant manager salary. Moreover, they don’t have to worry about maintenance expenditures or hiring employees. According to research.

This cost-effectiveness allows ghost kitchens to offer more competitive prices and potentially attract a larger customer base. Ghost kitchens can open in more affordable areas, further reducing costs. This allows them to offer more affordable menu options without compromising on quality.

What Is a Ghost Kitchen - Advantage #2: Increased Variety

With multiple virtual restaurants operating under one roof, ghost kitchens can offer a wide range of cuisines and dishes. This allows customers to try new flavors. So, not only is a ghost kitchen beneficial for a startup, but it also offers a rewarding experience to customers. Moreover, the flexibility of ghost kitchens allows for experimentation with unique food concepts. Chefs can tinker with ingredients and prepare something creative. This food trial and error is possible thanks to the low overhead costs.

What Is a Ghost Kitchen - Advantage #3: Faster Service

Ghost kitchens are designed for efficiency, focusing solely on food preparation and delivery. This streamlined approach allows for quicker order processing and delivery. So, a virtual restaurant should be ready to handle a high influx of orders during peak times. It should also efficiently manage takeout and delivery. If it fails to do so, it is not operating as a true virtual kitchen in the eyes of the customer. Customers expect ghost kitchens to provide faster service compared to traditional restaurants.

What Is a Ghost Kitchen - Advantage #4: Greater Online Presence

Ghost kitchens heavily rely on orders coming from food delivery apps. So, it is crucial to focus on having a strong online presence. You should make it easier for customers to find them through food delivery apps and websites. This increased visibility helps them reach a larger audience and attract more customers.

Having a strong online presence means having a large market share. A large market share will provide a ghost kitchen with two opportunities:

  1. Expansion: the ability to open new locations or expand their existing operations to cater to a wider customer base. This can lead to an increase in revenue and growth for the virtual restaurant.
  2. Customer database: the ability to collect valuable customer data, such as preferences and ordering habits. With valuable customer data at its disposal, a ghost kitchen can use it to personalize its marketing efforts. They can study their patrons and improve customer satisfaction, ultimately leading to increased loyalty and repeat business.

What Is a Ghost Kitchen - Advantage #5: Quick Startup

One of the major advantages of ghost kitchens is their ability to have a quick startup. Unlike traditional restaurants, ghost kitchens require less initial investment and a shorter time to set up. This is because:

  • Setting up the kitchen space does not require a lot of investment.
  • It takes less time to buy, renovate, install, and furnish a property.
  • Little to no staff reduces the hiring time.
  • They bypass the lengthy process of getting a license because there are fewer requirements.

This allows entrepreneurs to enter the food industry with lower risks and start serving customers faster.

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4 Ghost Kitchen Disadvantages

While ghost kitchens offer numerous advantages, they also come with a few disadvantages. It is crucial not to drool over the pros and ignore the cons. For a virtual restaurant to operate and flourish, a true entrepreneur will look at its advantages and disadvantages.

What Is a Ghost Kitchen - Disadvantage #1: Lack of Physical Space

The lack of a physical dining space may limit the customer experience and prevent the opportunity for in-person interactions.

What Is a Ghost Kitchen - Disadvantage #2: Limited Customer Base

The number of ghost kitchens is increasing day by day due to popular demand. However, that doesn’t mean that the entire market is under their thumb. After the pandemic died down, restaurants that were able to survive the lockdown underwent marketing and cost-effective strategies. Foodies, who prefer to dine out instead of using the virtual dining concept, returned to their usual eating establishments. Ghost kitchens, which once held the market for a couple of years, began to face competition from restaurants. They were not able to reel in customers who loved dining. So their customer base began to shrink.

What Is a Ghost Kitchen - Disadvantage #3: Rival Virtual Kitchens

In the United States, the percentage of ghost kitchens is approximately 51% and rising. As their number continues to rise, the competition among them becomes more intense. With an increasing number of rival virtual kitchens, it becomes even more challenging for ghost kitchens to attract and retain customers. This heightened competition puts additional pressure on virtual restaurants to differentiate themselves.

What Is a Ghost Kitchen - Disadvantage #4: Excellent Marketing

Another disadvantage is the need for excellent marketing strategies. A ghost kitchen operates online and doesn’t have a physical presence because of the virtual dining concept. The lack of actual locations makes it difficult for customers to connect with restaurants. So, they need to have excellent strategies to create a strong marketing presence.

How To Open a Ghost Kitchen

If you believe the advantages outweigh the disadvantages and are confident you can operate a ghost kitchen, then do it. Here is a step-by-step guide on how to open a ghost kitchen.

  1. Calculate your startup cost: You need to calculate the startup cost of opening a virtual restaurant. Once you have an estimate, compare it with your initial investment. Make sure you have enough funds to cover the obvious expenses. If your initial investment falls short, consider scaling down. Seeking additional funding through loans or investors.

  2. Find a location: What is a ghost kitchen recommended ideal location? The location can almost be anywhere. This could be a space in an existing restaurant, a commercial kitchen, or even a food truck.

  3. Equip your ghost kitchen: You need to set up your virtual restaurant with the necessary tools and equipment. This includes industrial-grade cooking appliances, storage facilities, and efficient delivery systems. You can handle delivery yourself or hire the services of third-party companies.

  4. Develop a menu: The menu should cater to your target market’s preferences and demands. Make sure the ingredients are readily available, and the food you prepare is of high quality. Consider offering a diverse range of menu options, but make sure you have the appliances to prepare the food.

  5. Get the license: A virtual kitchen is easy to establish and takes a considerably shorter time. However, that doesn’t mean you can operate without a license. If you are not sure what is a ghost kitchen license, you need to make sure of the following:

  • The kitchen must comply with health and safety laws.
  • The kitchen must pass the health department’s inspection.
  • You need to apply for a business license.
  • You need to be aware of the taxes in the city where you are operating.

How To Market Your Kitchen?

Marketing is the most important part of opening a virtual restaurant. Since the online presence is the lifeline of the establishment, you must make sure to focus on marketing. If you don’t know what is a ghost kitchen online marketing technique, here are a few steps you should follow:

  • Partner with food delivery apps to reach customers online.
  • Advertise on social media platforms by posting mouth-watering food pictures.
  • Offer various promotions from time to time.
  • Launch and regularly update your website.
  • Collaborate with food bloggers to increase your online visibility.
  • Share positive reviews.

Use Beambox to start a ghost kitchen if you don’t know how to market it or keep customers happy. Beambox is a platform that can assist you in managing your ghost kitchen. Beambox can help you track customer preferences, optimize your marketing campaigns, and improve the overall customer experience. Start your Beambox free trial today.

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