Ghost kitchens are a fairly new concept.
Entrepreneurs within the restaurant industry have been setting up ghost kitchen businesses for a few years now, but they became increasingly popular during the pandemic. In fact, as of 2021, the global ghost kitchen market size was estimated at a whopping $43.1 billion.
If you want to learn more about ghost kitchens, we’re here to help with this comprehensive guide. We’ll tell you everything you want to know about what a ghost kitchen is, the advantages of ghost kitchens, and even how to start a ghost kitchen yourself.
Before we tell you how to start a ghost kitchen, it’s worth defining the term.
A ghost kitchen, otherwise known as a dark kitchen, is a restaurant that offers a takeout- or delivery-only service. It’s a commercial kitchen but without the overhead costs associated with a full-service restaurant.
Ghost kitchens don’t have dining room areas, so they’re more like virtual restaurants.
Dark kitchens offer takeout, delivery service, or both. Many work with third-party delivery apps such as Postmates, DoorDash, Grubhub, or UberEats. Others use in-house delivery, and some prefer just to offer a take-away service.
The main difference between a ghost kitchen and a regular restaurant is that customers can’t dine in the restaurant itself; the lack of a dining room is really its defining feature.
During the coronavirus pandemic, the global restaurant industry suffered. But restaurant delivery services flourished during this difficult time. Many existing restaurants had to close their doors to eat-in diners, but they could switch to a delivery- or takeout-only system to keep their customer base fed — and keep money coming in.
The effects of the COVID-19 pandemic have been far-reaching and varied, but the popularity of food delivery looks set to stay. Many business owners have realized they don’t need a brick-and-mortar restaurant to have a successful restaurant business.
As the restaurant industry returns to some semblance of normalcy, there’s still one significant advantage to running a ghost kitchen: lower overheads.
Since you don’t need to open and maintain a dining space for your customers, you can rent or purchase real estate at a much lower price. There’s also no need for an extensive front-of-house team to run your food service operations, meaning your labor costs are cheaper too.
So, now that you know what a ghost kitchen is, you’re probably wondering how to start one. Here are seven steps to doing just that.
Like when opening a traditional restaurant, the first step in opening a ghost kitchen should be writing a business plan.
As a good starting point, your business plan should include:
An executive summary, including your objectives and mission
The concept for your ghost kitchen
The products and services you intend to provide
A thorough budget, including both startup costs and ongoing costs (such as food costs and insurance costs)
A planned menu, including menu prices
Market analysis (so you know your competitors and target customers)
A business model (i.e., your plan for making money)
While writing your business plan, you’ll need to decide whether you want to offer your own delivery service, partner up with delivery apps, or offer takeout only. It’s also possible to provide a combination of delivery and takeout.
Partnering with an external delivery service can be a good option for ghost restaurant operators who want to maximize their digital footprint. If you use a delivery partner like UberEats or Postmates, you’re more likely to be found by a larger number of customers.
However, the downside is that you’ll have to pay a commission fee on each order processed by the app.
Delivering the food yourself is an excellent way to be accessible if your kitchen isn’t easy for customers to access. Customers can just place their orders online or by phone, and your delivery drivers will take the food to them as soon as it’s ready.
If you operate as a delivery-only ghost kitchen, you can reduce your real estate costs, as you won’t need a reception or customer-facing area. However, it’s worth remembering that you’ll have slightly increased labor costs, as you’ll have to pay your delivery drivers a living wage.
Takeout is a great option because you don’t have to sacrifice any of your profits to an external delivery service. Customers can simply place their orders at a self-service kiosk and wait to pick up their food. Alternatively, they can call a phone number to order or place online orders via your website or social media profile, then arrive to pick up their food themselves.
Operating a takeout-only service is a great way to keep things simple. Your labor costs will be low, and you can always choose to add a delivery service later if you want to reach more customers down the line.
When your business plan is ready to go, it’s time to start implementing that plan. Start by researching what business licenses you’ll need to operate. This can vary from state to state, so it’s worth doing your own research here.
Next, apply for some funding. Many financial institutions offer loans to small businesses, and this can be a good place to start. Alternatively, consider looking into angel investors; angel investors put money into a business in exchange for a stake in that company.
When you’ve secured the necessary funding, take some time to find the best piece of real estate for your ghost kitchen business.
Some entrepreneurs prefer to work out of a space they share with other operators; these shared kitchen spaces are known as cloud kitchens. Cloud kitchens are ghost kitchens with multiple brands operating in the same space.
You can also work from a commissary kitchen. These are commercial kitchen spaces that have already been set up in accordance with health regulations and laws. You can rent a commissary kitchen from a third party.
Alternatively, you can find and set up a kitchen of your own. This will likely be more expensive than working from an existing space, but you’ll have complete control over the setup.
Now that your kitchen space is up and running, it’s time to focus on your menu.
It’s a good idea to start with just a few items on your menu until you get more experience. Once your restaurant has been operating for a while, you can experiment with new menu items or specials.
When planning your menu, remember that this is all food that needs to be easily transportable. Your specialty might be a hot, steaming bowl of soup — but how easy is that going to be to deliver to your customers?
It’s not impossible, but you’ll need suitable takeout containers for the job. Plan your menu, then source the best containers for each menu item.
You might be opening a ghost kitchen, but you’ll still need staff to run your operations.
Search for staff members and find the best people for your team. You’ll need:
Chefs
Pot washers and cleaners
Food runners (if offering a pickup service)
Delivery drivers (if offering in-house delivery)
Put out job ads, bring people in for interviews, and hire your team. Remember that all employers in the U.S. need to apply for an employer identification number (EIN) from the IRS.
If you’re operating a pickup service in your ghost kitchen, you need a way for customers to pay for orders when they arrive, such as a point-of-sale (POS) system or a cash register.
Installing a tablet-based self-service kiosk is an easy way to process orders and payments. With an iPad, Square payment hardware, and a kiosk app like KioskBuddy, you’ll have everything you need.
These kiosks let your customers place and pay for orders by themselves, meaning you’ll be able to keep staff costs down. The kiosks will send the orders straight through to the kitchen, so your back-of-house staff can start preparing their food right away.
There are seven main steps to opening a ghost kitchen, but once you have the essentials sorted out — things like your kitchen space and menu items — you’re pretty much ready to open your new restaurant business. Welcome to life as a ghost kitchen restaurateur!
The ghost kitchen concept is relatively simple, but it’s crucial that you have a proper POS system in place so your customers can pay for orders quickly and easily.
KioskBuddy acts as a self-ordering device and a POS system all in one. Customers can place orders at the touch of a button and pay using a credit card. The software will then send the orders through to your kitchen immediately. It’s an easy and effective solution to your order-processing needs.
Sign up for KioskBuddy today and make your ghost kitchen dreams a reality.