Council Post: Ghost Kitchens: Reasons To Adopt This Type Of Food Delivery Model

CEO and Founder of the Profitable Restaurant Owner Academy, the ultimate resource in starting a profitable restaurant.

Ghost kitchens, sometimes also called cloud or virtual kitchens, are essentially commercial kitchens optimized for food delivery. This means no storefront, no dine-in area and no front-of-house. 

While some offer takeout, delivery is the main focus, with nearly all orders routing through third-party apps like Uber Eats, DoorDash or Grubhub. Although this business model didn’t even exist 5 years ago, it has taken the industry by storm.

The pandemic has only skyrocketed ghost kitchens’ success, becoming one of the only growth areas in the industry and a saving grace for many struggling restaurants. While the stats about small business closures are already staggering, just imagine how many more would fail without offering delivery. Diversifying income is one of the four tips I’ve uncovered to help keep restaurants afloat in these uncertain times. 

Why are they so successful?

Everyone’s eating habits and priorities have drastically changed. People aren’t interested in visiting a physical restaurant anymore because of social distancing. Even if they wanted to, government regulations are always changing, and dine-in is no longer a guaranteed or sustainable option. 

What people do want is a restaurant-quality meal on their own table in their own home. The safety, convenience and popularity of these third-party apps put ghost kitchens in a great position for success both now and after the pandemic. This is why offering food delivery can determine a restaurant’s success in today’s economy. 

What are the benefits?

From a business standpoint, opening a ghost kitchen is a far safer venture than a traditional restaurant. A smaller footprint and no location constraint means cheaper rent, while having no front-of-house saves big on staffing and interior design budgets. Objectively, a lower investment cost equals lower risk.  

They’re also faster to build, which means faster profits. The third-party apps’ infrastructure can automatically expose ghost kitchens to a wide customer audience, especially if you partner exclusively with one service. 

Some even test and serve multiple food brands from one location. What if Donna’s Donuts and Pete’s Pizza were delivered from the same kitchen? This potentially can appeal to twice as many people, doubling profits. 

Why should I be interested?

Regardless of the pandemic, customers have already become accustomed to the accessibility of food delivery; their habits have fundamentally changed. I predict this will have a huge effect on the traditional food service industry and its supplementary services like marketing and design. 

The restaurant business is already extremely competitive with razor-thin profit margins. On top of this, Covid-19 has left thousands struggling, making this cultural shift extra threatening for mom-and-pop shops and owners who are less than tech-savvy. 

The scary truth is: I believe you’ll lose an edge in the industry if you’re not prepared to adapt to this future.

How can I adapt?

The good news for restaurant owners is that it’s not very difficult to integrate delivery into your existing business. With the ghost kitchen’s model and the logistics and efficiency of third-party apps, this new reality offers a tremendous opportunity for success to those who know what they’re doing.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?