E-commerce was already on the rise before 2020, but its growth was accelerated by the COVID-19 pandemic. Businesses of all types were suddenly dealing with lockdowns and other restrictions, and online sales allowed them to stay operational. In the restaurant industry, this has been reflected by the fast growth of ghost kitchens: commercial kitchens that are fully dedicated to takeout and delivery, without a walk-in service.
Ghost kitchens are also known as “dark kitchens” or “cloud kitchens”, and they offer many advantages for restaurant owners who want to focus on the delivery market. In this article, we will discuss 3 major advantages of having a ghost kitchen. They have lower operating costs than traditional restaurants, while being more adaptable. A single ghost kitchen can be used for several menus, and it can be easily repurposed if you rebrand an online restaurant.
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1) Ghost Kitchens Have Lower Real Estate and Operation Costs Than Restaurants
Compared with opening a brick-and-mortar restaurant, starting a ghost kitchen is a much smaller investment. First of all, you save all the costs associated with the dining area; this not only includes real estate costs, but also energy and water bills. This is a major advantage of ghost kitchens, considering that rentals and energy prices are on the rise throughout the US.
Other than using less space than traditional restaurants, ghost kitchens also have lower fitout costs. For a restaurant, you need to design and build a storefront that will attract customers. This is not necessary for a ghost kitchen, since marketing efforts will be mostly focused on delivery apps and social media.
Ghost kitchens also save on real estate costs thanks to their location flexibility. Traditional restaurants greatly depend on being visible and easy to reach, and commercial spaces that meet this description are generally more expensive. On the other hand, a ghost kitchen only needs online visibility.
2) You Can Start Multiple Restaurants With a Single Ghost Kitchen
Another advantage of ghost kitchens is being able to operate many online restaurants with the same commercial kitchen equipment. Restaurants typically design their brand image according to the food they serve, but this can also limit their ability to expand their menu. For example, if your restaurant has been branded around pizza and you add tacos to the menu, they are less likely to be ordered. Opening a second restaurant with a different brand image is an option, but this with higher costs and financial risks.
Expanding your menu is much easier when you have a ghost kitchen. In this case, you can open a second “online restaurant” without renting another space and setting up a separate kitchen. You can use the same kitchen to prepare different types of food, and they can be offered on delivery apps under different restaurant names.
When you split the menu of a ghost kitchen into different restaurant concepts, customers can also pick their dish more easily. Instead of having a generic brand image with a long menu and different types of food, you can split your business into several brands.
3) Ghost Kitchens Offer Flexibility and Adaptability
Compared with traditional restaurants, ghost kitchens can adapt to more locations. As mentioned above, a ghost kitchen only needs an online presence to be successful, and you don’t need an attractive storefront on a busy street. The small size and location flexibility of ghost kitchens can also be used to your advantage: you can operate closer to customers, reducing delivery times.
Since ghost kitchens are smaller and more discreet than restaurants, they can be set up more easily in residential areas. Large commercial projects may face permitting issues and opposition from neighbors, but a compact ghost kitchen is more likely to get approved. Thanks to their smaller size, ghost kitchens can also adapt to commercial spaces that might not be suitable for a restaurant with dining tables. Setting up ghost kitchens is also a viable strategy for established restaurant chains who want to serve the home delivery market more efficiently.
A ghost kitchen can also be repurposed more easily if an online restaurant concept is not successful. When this happens to a traditional restaurant, rebranding can be very expensive; the costs include designing a new brand, renovating the existing space, or even moving to another location. When using a ghost kitchen, all the rebranding happens online with much lower costs.