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In the past few years, the concept of a ghost kitchen has been making waves in the restaurant industry. This concept emerged as a business model to respond to the ever-increasing customer demand for food deliveries. Using a ghost kitchen frees a restaurant from the financial burden of paying rent, and not needing space for customers to sit in the dining areas adds to the benefit. But, getting to the point, what is a ghost kitchen exactly? How does it function? Let’s take a look.
What is a Ghost Kitchen?
A ghost kitchen is a food preparation facility with no dining room, no waiters, and no parking lot. In short, ghost kitchens have no public presence of any kind. Ghost kitchens are built to fulfill orders on online food delivery apps such as Grubhub or DoorDash. And hence, their menus are also available for customers that require food delivery.
Initially, when the concept of ghost kitchens was introduced, they were looked at as virtual restaurants or virtual kitchens. However, after the COVID-19 pandemic brought a sudden wave of business closures, the restaurant industry was hit the worst. Due to safety measures, the streets were deserted and people could no longer enjoy a meal in a restaurant and this led restaurant owners to re-think their business models.
At this point, ghost kitchens were already trending, but the pandemic gave the ghost kitchen model a much-needed push. These kitchens became a necessity for restaurant owners to stay in business. Digitalization played a major role in it too. With more people welcoming the idea of ordering every day, the online food delivery sector is blossoming and ghost kitchens are an integral part of it.
6 Reasons to Integrate Ghost Kitchens into Your Restaurant Business
Less overhead costs
Lower startup expenses
Optimized workflows
Better market penetration
Flexibility to move as per consumer behavior
Ability to evolve your Unique Selling Proposition
Less Overhead Costs
So, what is a ghost kitchen’s strongest suit? It is its ability to run with minimal costs. When there’s no footfall of customers, your overhead costs are significantly low. To put it into perspective, you don’t have to buy chairs, tables, or decorative elements. Moreover, there’s no waiting staff and hence, you don’t have to pay them. Also, with no furniture, there’s extra floor space for lean operations.
You just have to ensure that you meet the standards of the Department of Health and that your permits are totally updated. With these out of the way, you can focus on your menu and ways to streamline your delivery.
Lower Startup Expenses
Generally, to start a restaurant, the restaurant owner has to shell out a lot of money. Apart from the rent, furniture and decorations, kitchen equipment, and waiting staff can be extremely expensive as well. These expenses can eat into your profits and cripple your finances.
If you already own a restaurant, you can split the operations between your virtual and physical restaurant by leveraging your existing equipment, without any extra costs.
Optimized Workflows
Ghost kitchens give you room to focus on the restaurant’s primary objective: catering to customer demands by driving more revenue to your business. If your staff is properly divided into serving the restaurant customers and online orders, your operations will be as smooth as butter.
Better Market Penetration
A ghost kitchen can help you crack into a new market quickly. When you run a brick-and-mortar restaurant, you are limited to your physical location. So, when the customer footfall is low, your revenue is low as well.
This is not the case with ghost kitchens as they help you reach a wider audience. You can even reach customers that are far away from the restaurant. You just need a streamlined delivery system and you can increase your market share.
Flexibility to Move As Per Consumer Behavior
Consumer preferences are changing quickly. Today, consumers look for fast and convenient services. And this is why the food delivery industry has grown tremendously in the last five years. By integrating a ghost kitchen, you can keep up with changing customer food as well as delivery demands. This not only enhances your agility but also your revenue streams.
Evolve your Unique Selling Proposition
With a ghost kitchen, you can customize your menu to your liking. You can change your cuisine choices instantly and test out several food options prior to settling for one category.
If you change your cuisine in a physical restaurant, you have to print out menus and update the signage boards. But, with a ghost kitchen, you just have to change the description in the app. Simple.
Final Words
With more and more people warming up to the idea of ordering food for convenience, ghost kitchens are gaining popularity at a very fast pace. Moreover, with the COVID-19 pandemic, the food delivery industry has flourished and ghost kitchens are a part of this industry.
FAQs
1. What is a ghost kitchen?
A ghost kitchen is a food preparation facility with no dining room, no waiters, and no parking lot. In short, ghost kitchens have no public presence of any kind. Ghost kitchens are built to fulfill orders on online food delivery apps
2. Is a ghost kitchen a good idea?
With ghost kitchens, you don’t have to buy chairs, tables, or decorative elements meaning your overhead costs are significantly low. Ghost kitchens give you room to focus on the restaurant’s primary objective: catering to customer demands. You can start a ghost kitchen with less investment. Moreover, ghost kitchens can help you reach a wider audience.
3. Why is ghost kitchen popular?
Ghost kitchens are getting popular because they lower the input and overhead costs. You don’t have to worry about decorating or maintaining a restaurant, paying a big waiting staff, or furnishing a dining room.