What to Know About Ghost Kitchens

With the rising popularity of food delivery apps like GrubHub and DoorDash, the bar has been set pretty high when it comes to fast food delivered quickly and cheaply. The COVID-19 pandemic certainly brought these apps to the forefront, but they continue to gain in popularity with users all over the country.

According to Upserve, the food delivery industry grew 300% faster than the dine-in industry during the last five years. About half of consumers order delivery at least once a week. If you’re looking to get in on this trend and make some money, you may wonder how you can do it on the cheap.

Well, there’s a new type of business out there called “ghost kitchens” which can be created with the affordable use of shipping containers.

Many people confuse the terms “ghost kitchen” with “virtual restaurant,” but they are actually different in many ways.

Ghost Kitchen: Defined

What makes a restaurant a restaurant? Great food and service, right? Well a ghost kitchen offers all that but without the tables and chairs, wall menus, cash registers and soda stations. Basically, ghost kitchen are delivery-only restaurants, with no foot traffic by customers. That’s because people place their orders online through the app.

The driver picks up the food and delivers it to the customer. All you have to do is rent a space where your cooks can make the food. No need to have extra square footage for customer seating, restrooms, etc.

Popularity of Ghost Kitchens

Savvy business owners are hitching a ride on this hottest new trend because they know what customers want nowadays: fast food quickly, delivered to their door cheaply. Many traditional restaurants lose money using delivery apps because they are paying a lot for overhead to house their traditional operations as well.

There are many benefits to opening your own ghost kitchen:

1. Dominate Your Food Category – Who says you have to sell just one thing under one brand? You can create multiple brands within the same category.
2. Foot Traffic is Down – How consumers get their food today has made a fundamental shift. Foot traffic is way down, yet delivery requests are way up. Business owners are recognizing a revolutionary way to make money, as ghost kitchens are designed especially for off-premise eating.
3. Startup Costs Are Low – With the median construction cost to create a restaurant from scratch with traditional construction being $200,000, this just isn’t cost feasible to budding entrepreneurs. Shipping container kitchens can be delivered with all major appliances and shelving installed, at a fraction of the cost of traditional construction. Once delivered to the site, it just has to be connected to water and electric.
4. Labor Can be a Lower Expense – Labor costs for most traditional restaurants is between 20 and 30 percent of gross revenue. With ghost kitchens, you can eliminate the need for counter service workers, serving staff, and bus boys. The only people you will need to hire will be cooks and delivery drivers.
5. Food Costs and Margins May Be Optimized– Ghost kitchens can specialize in one or two items that they are really good at, rather than offer a diverse menu to satisfy all customers who come in their doors. This results in more streamlined production.
6. Delivery Platforms Open New Possibilities – Brick-and-mortar restaurants can only serve so many customers at a time. This results in their customer base being very limited to nearby foot traffic. This is essentially what will decide order volume for these restaurants. To boost sales and reach more people, you would have to open a new restaurant at another location. This can get very costly. With a ghost kitchen, you don’t have as many limitations. You can simply set your delivery radius to five miles, which is enough to absorb as many customers as possible that can make you money. Also, brick-and-mortar restaurants may not get a lot of foot traffic on snowy or rainy days, whereas weather does not affect ghost kitchens. In fact, they see an increase in traffic during inclement weather because no one wants to go out.

Contact DRYBOX

If you are an entrepreneur who is looking to open a ghost kitchen, you will need to start with the highest quality shipping container possible. We can help you choose the right one and suggest all the right modifications to make it work for you. To learn more, call us today at 866-549-9823.