The restaurant landscape is changing. As a result of the Covid-19 pandemic, dine-in service is taking a hit. Unfortunately, this isn’t likely to change for a while. In response to lower dine-in numbers, ghost kitchens are becoming more popular.
Ghost kitchens are delivery-only restaurants. They do not offer dine-in or pick up services. Ghost kitchens leverage modern technology to allow customers to order their food online and deliver it to them. While convenient in many ways, ghost kitchens also present some unique challenges.
Top 3 Pros of Ghost Kitchens
Less Staffing and Payroll
As a business owner, you don’t have to employ a front of the house staff because customers order online when a restaurant utilizes a ghost kitchen. No one has to wait on customers or take orders. You have your kitchen staff and possibly a few delivery drivers if you decide to handle delivery yourself.
Keeping labor costs low helps you to maximize your profits. It also means you change a little less for your products, which can give you an edge over your competition.
In many ways, you have a lot less to worry about with a ghost kitchen. There aren’t as many moving parts, so it is a lot easier to track everything.
Utilizing a cloud kitchen management solution can help to minimize order errors as orders are sent directly to the kitchen to either be printed or showcased on a kitchen display system. There is no person mishearing and writing down wrong orders so order accuracy should improve. All-in-all, ghost kitchens allow operators to invest in as little or as much equipment they see fit.
This efficiency also makes ghost kitchens a great way to test a type of cuisine in the area. If there is a type of cuisine you think would work well in the area, but you want to test it in a low-cost way, a ghost kitchen might be what you’re looking for.
Lower Real Estate Costs
When opening a traditional restaurant, you typically need a space high in square footage. It’s not just the additional space for a dining room or patio, you also have to store the plates, utensils, cups, napkins, and other items that go along with dine-in service.
Your ghost kitchen is only a kitchen. You will still have store food containers and paper bags, but these take up a lot less space. There is no need to rent out a vast space for diners or even a patio when you won’t be needing it.
Renting only the kitchen space you need is a huge money saver, which makes the barrier to entry a lot lower.
Top 3 Cons of Ghost Kitchens
No Walk-In Traffic
One of the ways traditional restaurants gain new customers is through being seen from the street. If customers can’t just pop in or see a sign from the street, it can be harder to attract customers.
However, you can mitigate this through strategic online ads and word of mouth. You can also purchase ad space on billboards near parks and deliver to those parks, so when people are out, they still have the option of ordering something.
You Live Online
When all of your advertising is online, it is more difficult to attract customers to your business. Potential customers are bombarded with ads for multiple businesses daily. Even if you have partnered with one of the food delivery apps, there are probably other restaurants that are serving similar cuisine to yours for customers to choose from.
You do have to work harder to build relationships with your customers, but it can be done. Include coupons, and if you do in-house delivery, make sure to send the same delivery guys when you can use it so that your customers always see a familiar face.
Reliance on Third Parties
When you have a ghost kitchen, especially when you start the business, the best way to get new customers is to rely on third-party delivery apps and websites for your deliveries.
However, dependence can also be a bad thing. If that delivery app or website decides you have gotten too many negative reviews or wants to go in a different direction, they can drop your restaurant with little notice. You also have no control over their customer service.
You can mitigate some of that risk by making sure your restaurant is available on as many delivery apps and websites as possible, depending on the requirements.
You can also have in-house delivery. Make sure your customers have your direct website or phone number to place orders themselves if you are ever missing from their favorite delivery app.
The Invisible Business
Ghost kitchens are becoming increasingly popular, especially with the pandemic forcing many customers to rely more on delivery than dine-in, or even pick up. Catering to those customers will help you make more money, while your business is more efficient.