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Ghost Kitchens: What they are, and how they can work for you

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Some love them. Some hate them. But what is a ghost kitchen, anyway?

A ghost kitchen is a delivery-only restaurant model with a limited menu and no waitstaff. Delivery teams take food ordered remotely – usually via mobile app – to customers’ homes. Customers never see the place their food comes from, inspiring the name “ghost kitchen.”

What Are Ghost Kitchens?

The popularity of delivery mobile apps created opportunities for a new kind of restaurant: delivery-only. They’re called ghost kitchens because the restaurant does not exist as a brick-and-mortar venue. There is no front of house, only a kitchen. Guests cannot step up to a counter, take a seat, or even place an order in person. A few virtual kitchens make takeout and/or drive-through options available, but most keep things simple with delivery-only menus.

Ghost kitchens — also known as delivery-only restaurants, cloud kitchens, commissary kitchens, shadow kitchens, dark kitchens, and virtual kitchens — provide meals for delivery. Because delivery-only kitchens don’t invest in branding a dining experience, a single business may host multiple virtual kitchens. These may function as a secondary line of income for an established restaurant. They also work as independent entities, but they do not offer an in-restaurant dining experience.

COVID-19 and Shadow Kitchens

The pandemic forced many restaurants to shutter their doors. Others went to extremes in pursuit of creative survival tactics. Virtual kitchens helped restaurants grow in new directions by cutting both public contact and overhead costs.

A single restaurant can operate multiple virtual restaurants from the same building under various names. Just a handful of cooks can manage orders for various types of cuisine thanks to the standard limited menu most virtual kitchens employ. Best of all, the public’s appetite is still alive and well, even when it’s trapped at home.

COVID-19 drove a delivery-only restaurant boom that is set to continue growing. The convenience for customers, and persisting caution about eating in a shared, indoor space with strangers, means the demand for cloud kitchens will likely remain consistent.

Many predict that customers won’t give up the ease of delivery now that they’ve gotten used to it. Virtual kitchens may follow the path of other convenience-based services, like drive-through menus and mobile ordering.

How Could a Virtual Kitchen Boost Your Business?

A cloud kitchen gives restaurant owners options. A delivery-only side project may keep brick-and-mortar venues afloat in extremis, or multiple brands of delivery-only restaurants may become the primary focus.

A cloud kitchen is essentially an opportunity to develop a second restaurant with little new investment. Because a delivery-only restaurant as a purely digital brand presence, it’s easy to grow it as an entirely separate brand. It’s an opportunity to test menu items you couldn’t justify in an established restaurant. Sometimes, it’s easier to target a niche market digitally. It’s also easier to change a limited menu.

While members of the restaurant industry have survived COVID, they are already seeing long-term changes. Fewer customers interested in a dine-in experience means downtime in the kitchen. In other cases, the restaurant labor shortage means that restaurants simply can’t accommodate customers that do want to dine in. While this isn’t always cause to close, it is opportunity to improve.

Running a delivery-only restaurant in the same kitchen space uses existing talent, time, and even ingredients. This approach to delivery-only kitchens diversifies the space’s income while serving old and new customers alike.

Pros and Cons of Ghost Kitchens

Pros of Ghost Kitchens

  • Requires a smaller staff.
  • Real estate investments can be maximized with multiple restaurants in a single kitchen.
  • Reduced health risk to both employees and customers.
  • Restaurants gain access to new markets with minimal advertising.
  • Efficiency increases with shorter menus.
  • Downtime is transformed into productive delivery windows.

Cons of Ghost Kitchens

  • Third-party delivery companies control market access.
  • Delivery app listings are costly.
  • A certain number of customers in the restaurant’s driving radius is needed to validate the conversion.
  • Expensive new takeout containers and bags with different branding are needed.
  • Highly changeable schedules can complicate labor management.
  • Pure ghost kitchens limit potential customers.

How Do Ghost Kitchens Handle Employees?

A delivery-only kitchen doesn’t need a large waitstaff, but they need excellent delivery teams. The trade-off feels like a reverse of traditional small business models. A new brick-and-mortar restaurant focuses on the experience provided on-site. Delivery comes later. Virtual restaurants, however, require delivery immediately, and they need kitchen staff on a very flexible schedule.

Third Party Options for Virtual Kitchens

Many restaurants pair up with third-party services like DoorDash and Grubhub. This means they don’t have to hire, manage, and pay their own delivery staff. These third parties also bring existing customer bases who want food delivery and nothing but food delivery. The cost of joining the list of restaurants available on one of these delivery apps, however, can be very high.

Virtual Brands With Scratch-Built Teams

Sunset Squares, a virtual pizza brand in San Francisco, took a different approach. Sunset Squares’ chef pulled family and friends into the COVID-era start-up as delivery team members. The kitchen charged flat delivery rates to customers based on neighborhood distance. It’s important to note, however, that the brand is currently planning to join DoorDash in order to keep up with demand.

Labor Management Tools to Streamline Delivery-Only Kitchens

Regardless of whether cloud kitchens hire their own delivery team members, they face unique scheduling challenges. Some of the most successful delivery-only restaurants change their hours to fluctuate with peak mobile ordering times.

This technique further cuts overhead while maximizing profit. A cloud kitchen catering to business professionals in the surrounding office complexes may change hours to match the office culture’s holiday schedule. A virtual kitchen delivering pizza to nearby university students may extend hours ahead of finals for late-night study sessions. A kitchen in Los Angeles’ tourist districts may have a schedule that depends on everything from new films to the weather.

Managing a Ghost Kitchen Doesn’t Have to Be Hard

While this kind of changeable schedule may sound like a mess, TimeForge simplifies scheduling and shift management. Whether you’re considering running a delivery-only kitchen as temporary financial support for your traditional restaurant or you want to see how far this new trend can take you, our labor management platform has crucial tools to streamline busy kitchen and delivery schedules.

Our smart mobile apps give managers the power to edit on the go. With advance scheduling features, compliance automation, and team messaging options, managers can escape the back office and work as part of the team.

Advanced tools like employee shift-swapping give workers power over their lives outside of work while keeping everyone on the same page. Other features, such as sales forecasting, may prove invaluable in the early days of a ghost kitchen to ensure there are enough hands on deck to meet demand.

We can make a confusing transition easier to manage. You deserve labor management software as flexible as your kitchen facilities. Contact us today to learn how TimeForge can simplify even the most complicated ghost kitchen’s scheduling.

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