What is a Ghost Kitchen & What Does it Mean For The Restaurant Industry?

Ghost kitchens have been making quite a splash in the restaurant industry for the past few years. This new trend, however, is not something to be feared — quite the opposite, in fact. Ghost kitchens present opportunities for aspiring restaurateurs to get involved by making it easier to enter the market and minimizing risk. Established restaurants are also jumping on this opportunity to stay nimble in a fluctuating market. Here, we’ll go over what ghost kitchens are and what implications they carry.

What is a Ghost Kitchen?

A ghost kitchen, otherwise known as a shadow kitchen or dark kitchen, is a professional cooking facility that is set up solely for carryout or delivery. The ghost kitchen facility in which the cooking takes place is often completely unbranded and may provide equipment and workspace for a multitude of brands/cooks simultaneously.

With 3rd-party delivery apps such as DoorDash, GrubHub and UberEats making delivery easier and more accessible, it comes naturally that innovation and cost savings would lead to the delivery-only restaurant. Keep in mind that the terms ghost kitchen and virtual kitchen/restaurant are often used interchangeably, but they do have differences. A ghost kitchen is more like a coworking space for a variety of restaurant brands that rent out the equipment/space on a monthly basis. A virtual restaurant, on the other hand, has already established brick and mortar locations but uses their location to create specialized delivery-only menus.

Pros and Cons of Ghost Kitchens

If you’re considering opening a ghost kitchen, be sure to read this list of advantages and disadvantages to see if it’s right for you:

Pros

  • Low overhead costs
  • Flexibility and nimbleness
  • Able to test your cooking creations on different local markets before investing in a full restaurant space
  • Unlimited growth potential
  • Expand delivery range for your existing brand

Cons

  • Lack of brick-and-mortar identity
  • Can’t serve curious walk-in customers
  • Subject to natural flaws in delivery systems (eg. food is harder to serve fresh, you don’t get to plate and present the dishes, etc.)
  • Because of delivery service fees, prices for end users may be higher
  • May be subjected to constraints from the kitchen location (eg. delivery area)

Larger Implications on the Restaurant Industry

Ghost kitchens have caused a bit of a commotion within the restaurant industry. On the one hand, they provide a low-risk avenue for aspiring cooks to test their creations on customers. But on the other, they do not provide a holistic dining experience that’s more likely to drum up business through word of mouth. When ordering on a delivery app, there’s very little room for creativity in branding — no menu artwork, no in-house atmosphere, and no personable, friendly faces to greet the customer. You click a few buttons and then food arrives in nondescript takeout boxes. A very recent article on Grub Street points out that,

“Ghost kitchens have been meticulously engineered to be infinitely adaptable and fantastically efficient…But what they really are is a trend that manages, triumphantly, to strip away all joy from the act of eating. They are devoid of every feature that makes restaurants great…they are food logistics operations.”

So while it remains to be seen if ghost kitchens truly are the future for restaurant operations, for the time being, they do provide a very unique option for existing restaurants and a low-entry threshold for aspiring restaurant owners.

Society Insurance is Here to Protect Your Restaurant

At Society Insurance, we know that your business is your livelihood and we’re here to help you protect it. Our comprehensive restaurant insurance is tailored to the unique needs of your operation. To find out more, get in touch with your local Society agent.

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As a mutual insurance company, we operate and exist for the benefit of our policyholders. For more than 100 years, Society has been helping businesses overcome the unexpected with comprehensive coverage packages and outstanding claims handling, underwriting and risk management.

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