“Quick summary” Food delivery is clearly the way of the future.
For the time being, enhancing food delivery processes is about as close to the world of the future as we can get with other technology.
Among these new trendy things, a ghost kitchen is one. Imagine you are looking for a great place to dine in with your friends and land at this amazing restaurant with delicious food.
But to your surprise, you came to know that this restaurant doesn't have any dine-in space at all for its diners.
So, these types of restaurants - which have no space for dining - are known as Ghost Kitchens. Ghost kitchens are an excellent complement to the restaurant business, offering the opportunity to expedite the cooking, arranging, and delivery processes.
The global ghost kitchen market is expected to reach $71 billion by 2027, with plenty of room for expansion.
And they are becoming more common as a result of limited real estate, outstanding back-of-house effectiveness, the popularity of delivery applications, and a variety of other causes.
But what precisely is a ghost kitchen, and what is the most efficient method for opening one?
Let's find out!
Contrary to popular belief, a ghost kitchen isn't a room in a haunted house! It's just a delivery-only restaurant that accepts online orders only.
Setting up a Ghost kitchen requires competent cooking and food preparation facilities to cook delivery-only meals without any dine-in facilities. Ghost kitchens are predicted to account for half of the takeout and drive-thru dining sectors by 2030.
The term "ghost kitchen" can also refer to an online-only restaurant known as a Cloud kitchen or Dark Kitchen.
Ghost restaurants commonly use online ordering to assure a cashless transaction system, which can cut overhead expenses and enhance the effectiveness of delivery.
A ghost kitchen makes food for customers in a place with no public dining accessibility.
It is essentially a virtual restaurant.
To prepare meals, ghost kitchens may have their own brick-and-mortar restaurant kitchens. Because you don't have to be centrally positioned to attract customers, you can put up your kitchen where real estate is less expensive.
But who exactly is delivering?
Ghost kitchens are frequently encountered on delivery systems such as Uber Eats, GrubHub, and DoorDash. Other ghost kitchen models use their delivery systems, with in-house employees or drivers handling the delivery.
Let's understand with an example:
A popular restaurant chain, "ABC Burgers," decides to open a ghost kitchen in a city where they do not have a physical restaurant. Instead of opening a new location with a storefront and dine-in seating, they rent a commercial kitchen space for meal preparation and delivery.
ABC Burgers then partners with various online food delivery platforms or even launches its own platform with delivery partners to deliver food.
Customers can order food through an app, and ABC Burgers will prepare the food in their ghost kitchen and have it delivered to the customer's doorstep.
Win-win for everyone!
Making a business plan is the first concrete step to creating a ghost kitchen. Every new restaurant requires a business plan, regardless of whether the ghost kitchen is an extension of an established brand or a completely original concept.
Ghost kitchens typically operate solely through online orders and delivery services, which means that your ghost kitchen's operational system must be highly efficient and reliable to ensure that orders are fulfilled accurately and delivered on time.
Here are the key components of a ghost kitchen to simplify operations:
Before taking any further action, you must choose the kind of ghost kitchen you want to run. The answer to how to start a ghost kitchen may include what you enjoy cooking or what your other restaurants do(if you have). Still, it's also crucial to evaluate what there will be a demand for and where you may get an advantage over competitors.
Keep in mind that whatever food you decide to prepare and sell will need to be something that can be effortlessly packaged and delivered without becoming damaged.
Avoid overly dressed salads, which might become mushy, and finer foods, such as pricey cuts of meat, which might not hold up as well.
Evaluate the types of items people normally order and create your menu after considering everything.
Researching your target market is crucial when starting a take-out restaurant because it helps you to understand your potential customer's needs and preferences to provide tailored services.
Knowing your target audience can help you create menus and marketing strategies catering to their preferences. It will help you establish a loyal customer base that keeps returning to your ghost kitchen. It even boosts your brand awareness and drives more traffic to your ghost kitchen.
Here are some quick tips for researching your target market:
The first step in making it in the competitive food delivery sector is to have an innovative idea that distinguishes it from the competitors.
After deciding on your menu, you must determine your unique selling point to establish a winning, stand-out concept.
For example, if you want to open a pizza business, you may face much competition.
So, how to start a ghost kitchen business and distinguish yourself? You could turn it into a pizza parlor that only serves organic, farm-to-table food. You can be creative with your packing. Your pizza shape could be your unique selling point.
The possibilities are endless. You just need to determine what your target market wants!
You need to research the trending things in the market, such as eco-friendly packaging and organic or healthy meals that appeal to customers a lot.
You can leverage it for your pizza shop and attract your target market.
The cost of running a ghost kitchen can vary greatly depending on several factors, such as the size of the kitchen, location, operations, and marketing expenses.
Check out some of the estimated costs of running a ghost kitchen:
Ghost kitchens require a plan for how food will be delivered to clients.
Providing pickup or drive-thru alternatives has economic advantages. For instance, if a third-party delivery application costs a 30% delivery commission, you might give your customers a 10-15% discount on take-out orders.
The other choice is which delivery partners to use! However, not every delivery app is appropriate for every ghost kitchen, so third-party solutions should be weighed for advantages and disadvantages before joining up.
As an alternative, ghost kitchen companies can use in-house delivery methods to save third-party commission expenses. The disadvantage is that restaurants lose exposure and opportunities for new client acquisition through third-party's delivery service providers.
Whatever delivery method is used, meals must be sent out of the kitchen in takeout-friendly packaging that maintains food at the proper temperature and separates specific ingredients.
Building your brand is essential for the success of your ghost kitchen. A strong brand can help you differentiate yourself from competitors, attract and retain customers, and increase brand loyalty.
According to a study by Edison Trends, Sweetgreen has grown 124% since 2019, demonstrating the power of a strong brand in driving business growth.
Here are some interesting steps to build your personal brand:
Check out the list of pros & cons of starting your ghost kitchen:
Here's a quick checklist that you need to start your ghost kitchen; let's find out about it:
In broad terms, a city's health and planning departments will govern restaurant activities, and the exact same holds true for ghost kitchens since all business and health regulations and codes continue to apply to the business operations of a ghost kitchen. Furthermore, it is possible that you will need to secure any licenses or permits from the government to carry out the activities of the ghost kitchen.
These licenses may include the following:
You will also need to update the licenses on an ongoing basis. Of course, simply obtaining the license does not guarantee that you will be able to preserve it, so it is vital to comprehend any additional requirements linked with your licensing.
As the saying goes, location is everything. Even with a non-dine-in establishment that only accepts online orders and does not rely on foot traffic? Yes, even if you are working in a ghost kitchen, you must concentrate on selecting the best location.
Locating your ghost kitchen in the zip codes and communities where your particular cuisine is ordered the most can promote your restaurant as the best option for them. They'll notice your commercial on their favorite meal delivery application and understand that their order will come in a matter of minutes, with the food still fresh and warm.
In a society where everyone prioritizes everything on the move, the most convenient option frequently triumphs.
Setting up a ghost kitchen in different locations can be a smart move for businesses looking to expand their reach and increase their customer base. However, it also requires careful consideration of the costs and logistics involved.
It's important to research and understand the local real estate market, equipment and supply needs, staffing requirements, permit and regulatory requirements, and marketing and advertising needs in each location before proceeding.
Here are the key considerations when setting up a ghost kitchen in different locations:
A ghost kitchen's choice of site refers to its original idea and, of course, your budget as well as needs. Suppose the ghost kitchen business is an extension of the brand. In that case, you can use an actual area in your existing restaurant's kitchen to process online orders, saving money on the expenditures of finding a new location.
Alternatively, lease space in commercial kitchens that are less expensive, licensed, have manageable delivery distances and are appropriate for your ghost kitchen menu.
For new restaurateurs, the sole choice is to choose a distinctive location. The decision on where to operate should be contingent upon the availability of kitchen space and a feasibility assessment to see whether the idea will work in its proposed location.
Choose the right ghost kitchen space that fulfills your needs while being within your budget. You can consider the delivery time, location of your targeted customers, costs associated with delivery, rent of space, salaries of chefs based on location, and other related things.
The specific equipment and appliances needed may vary depending on the type of cuisine and menu offerings of the ghost kitchen.
Check out the list of equipment and appliances that you need in your ghost kitchen:
It is the general list of equipment or appliances you need in your ghost kitchen. So, you don't need to stock all of it; consider your requirements and buy the right ones.
Ghost kitchens have low-profit margins and a high volume of sales. You'll need to collaborate with reliable suppliers to get quality products and equipment for your ghost kitchen.
Because storage space in a ghost kitchen is limited, search for providers who deliver numerous times per week to avoid overburdening your freezers and shelves.
Your suppliers play a significant role in cost management, and choosing between the price of goods and quality might be your most crucial choice. One of the most crucial components of the ghost kitchen business is finding reliable suppliers who offer reasonable pricing without compromising the quality or safety of their food.
You will also need to purchase supplies for your packaging requirements.
Efficiency is critical for success in the ghost kitchen business.
To optimize your kitchen's workflow, have a look at some of the best tips:
Hiring staff for a ghost kitchen is crucial to ensure smooth operations and timely delivery of orders. Ghost kitchens require skilled chefs, kitchen assistants, delivery drivers, and customer service representatives. Finding qualified staff who can work in a fast-paced environment is key to success in the industry. A thorough hiring process and employee training can help establish a strong team.
The minimum staff needs of a ghost kitchen business model can help to lower overhead expenses and increase profitability. But you require more than just line cooks and head chefs for your ghost kitchen. Other considerations must be considered as well.
You must coordinate, fulfill, and process delivery orders, which must be handled by your team. It also covers updating your POS system, which includes menu changes, precise prep times, unavailable goods, and other features.
Also, customer service, in case potential guests phone or message to inquire about specific items, allergies, ingredient replacements, delivery alternatives, and so on.
All these activities are managed by your staff. So, think about your ghost kitchen's needs and hire staff accordingly.
After you've decided on your prerequisites for employing personnel in your ghost kitchen, the next step is to write job descriptions and clear your expectations.
When hiring for your ghost kitchen, post job positions in places where people are looking for work and attract expert candidates to work with you.
Consider employing an application tracking tool that proactively cross-posts your job advertisements across multiple job boards and social media channels, allowing you to effortlessly interact with a greater range of more qualified candidates.
The channels you choose and the job description you put out on the hiring platforms greatly impact attracting the right talents. So, make sure you put your best foot forward by choosing the right platforms and adding detailed descriptions.
Once connected, you can check their expertise and abilities to see if you are willing to conduct interviews with them or not.
After the screening, you need to conduct 1:1 interviews with the potential candidates to know more about their skills and knowledge. It also helps you analyze whether you are the right fit for the role or not.
Conducting interviews and hiring the right people for your ghost kitchen requires preparation, a thorough screening process, relevant questions, assessment of cultural fit, skills assessments, reference checks, and an informed decision considering your business needs and the candidate's skill set.
With these comprehensive processes, you can find the right people to help your ghost kitchen thrive. And keep in mind that hiring the people on your staff for cooking or maintenance will make or break your ghost kitchen business. So, be mindful and hire the right ones.
Also, consider your hiring and salaries budget as well to manage your business and its expenses accordingly.
Adding delicious dishes to your menu that your customers will enjoy is undoubtedly going to pay you in the long term. Customers have a plethora of options in our modern society, so it makes sense that they would desire some delectable food.
Additionally, allowing clients to customize their orders might result in the highest level of client happiness. Choosing dishes that abide by your concept and target audience will set you apart from the competition and keep clients coming back for more because of the ordering experience.
As you have a ghost kitchen, you must be careful to select dishes that are prepared for delivery. You don't want to mess up the customer's experience by selecting the wrong dishes.
When deciding the menu for your ghost kitchen, it is very important to strike the right balance in choosing between diverse & simple dishes to fulfill each & every requirement of your target audience.
Constantly keep on a check on analytics to find out what is working for your business and take decisions accordingly.
You can adjust your cooking line to function in harmony with your menu once you know which dishes are the most popular. And serve a variety of well-liked, lucrative, and simple dishes. After that, keep an eye on the data moving ahead and make continual adjustments to your menu items and prices for optimal efficiency and profit.
After analyzing, make sure you stick to your concept and your target market to get benefits in the long run as well.
The right balance will offer you optimum customer satisfaction and enhanced profitability as well.
Gathering customer feedback and using it to improve it - is crucial to achieving top-notch customer satisfaction.
It's important to actively ask for feedback from your customers through the right channels and right manner. Once you have collected feedback, listening carefully to what your customers say about the recipes is crucial.
Then, you need to look after the feedback to identify any common issues that your customers are facing. Based on this, make necessary changes to your recipes, such as adjusting ingredients, cooking time, method, or anything else. After implementing these changes, test the recipe again to see if it has improved.
Once you have made changes, follow up with your customers to let them know that you value their feedback and have implemented changes based on it. It will demonstrate that you care for them and ensure the best results.
Make constant efforts to get feedback, evaluate & improvise.
If you connect with a third-party delivery provider, you can benefit from their reach and visibility straight away. If you are going it alone, you have to market your ghost kitchen by yourself.
You may create and market your own website. You might use PPC ads and SEO to advertise your ghost kitchen website. If you want to target local customers, make sure your marketing efforts are solely directed in that direction.
Another excellent technique to attract prospective clients is through social media. You may grow your brand on social media and reach out to your customers without spending any money on marketing. You can even progress to paid social media marketing through social media ads and influencer marketing.
No matter which business you have, in which industry you are working, or who is your target audience - every customer loves promotions and discounts. It appeals to them to order from your ghost kitchen, getting you a loyal customer base and a competitive edge among your competitors.
Here are some of the effective ways to give promotions or discounts to your customers:
In the intent of offering the best promotions and discounts to your customers, don't forgo your profitability. Profitability is a crucial factor in any business, so offer promotions keeping the optimum profitability in mind.
Customers are at the center of your business. So, collecting constant feedback from your customers, evaluating them, and improving accordingly will boost your ghost kitchen.
As your orders begin to flow in, keep an eye on what is selling and ask for customer feedback. The adaptability of a ghost kitchen is one of its best features. If something isn't working, you can immediately change your menu or pivot your business.
More than any other kind of restaurant, ghost kitchens are fueled by technology. Therefore, be careful you pick the appropriate technology or POS system to gather, assess, and utilize client feedback.
Additionally, integration is required, and all of your systems must be able to effectively communicate and provide reliable data for you to collect and examine customer feedback. The particular mixture of tech solutions and customer feedback channels you choose will have a significant impact on your ghost kitchen.
Yes, it is possible setting up a ghost kitchen from home. However, it is important to check with your local regulations to ensure that you are in compliance with any laws or regulations regarding food preparation and delivery services.
Some areas may have restrictions or regulations that prevent home-based food businesses from operating, so it's important to do your research and make sure you are operating within the law.
Additionally, you will need a well-equipped kitchen and delivery strategy to set up a ghost kitchen from home.
So, consider the requirements and start accordingly.
The future of online ordering is definitely ghost kitchens. They give restaurant owners a new method to do what they do best: create delicious food for their customers to enjoy. They do this with low overhead, excellent flexibility, and efficient order fulfillment.
When designing and constructing your commercial kitchen, there are many factors to take into account. With the help of this comprehensive guide, you and your team can make the process easier.
Additionally, there has never been a better time to lay the groundwork for this new restaurant trend, with the ghost kitchen market expected to reach $1 trillion by 2030.
To keep your ghost kitchen running as smoothly as possible, you'll need a POS system that can interact with your inventory and finance systems to help you remain on top of everything and achieve a competitive edge.
If you are still in need of assistance to start your takeout restaurant or find the best-in-class POS system - then reach out to our experts and let our experts help you in delivering your first order!