Youll need to spend a considerable amount of time weighing the pros and cons, considering factors specific to your business, and learning about potential pitfalls. Do you have a plan for keeping French fries crisp and soup hot?
The ghost kitchen concept has been developing since the early 2010s, but consumer demand for food delivery in 2020 led to an explosion in ghost kitchens. The best way to keep your ghost kitchen profitable is to leverage the tools provided by third-party delivery platforms to grow your own in-house ordering and delivery streams and log customer data to help you grow your operation. With your menu, branding, and staff in place, youre ready to start receiving orders! First, you'll need to create a Square account.
And if you are a brand thats interested in these types of opportunities, check out RMNG, our experiential marketing agency. They have their own established brick and mortar locations (or food trucks), and use their existing kitchens to create additional, delivery-exclusive menus. Ghost kitchens are an exciting, low-cost way to enter the restaurant industry. Unlike traditional brick-and-mortar restaurants, ghost kitchens names and menus need to be optimized to perform well in online searches.
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(Image from Square), Square's site creator allows you to easily add content blocks to your site, including Instagram image carousels and customer testimonials. You can find all the forms you need to register your LLC on your states official business registration website. But no ones gonna help you with that [stuff] except you., First, the rise of delivery and mobile apps are something to be aware of. The reason you pay more money to rent for a storefront is because people will walk into your restaurant, Greenspan says. If your finished dish doesnt look like the image, however, your customers may be disappointed, and you may get many complaints and requests for refunds. The amount of training your staff requires will depend on the size and complexity of your menu and your employees experience level.
Of course, one downside is that food trucks lack storage, limiting how much food can be produced. To keep more of your money in your business, it may ultimately make the most sense to hire your own team of delivery drivers. (Image from DoorDash), The signup screen will prompt you to choose a plan; either Basic, Plus, or Premier. There are a couple of steps to creating your ghost kitchen concept. On the other hand, if your team has little kitchen experience, you should allow at least a week. As Greenspan says: The virtual brand is to get more eyeballs and make more sales for the operator. And because youre mobile, you can go anywhere in town and try to set up (delivery) shop. You can also look for a POS that includes delivery management tools. Its a virtual real estate game that increases your chance of capturing a customer looking for a specific dish.. (Image from Square), You add items to your Square Online store via the Square Dashboard.
You can explore other business structures in more detail by checking out our guide to choosing a business structure. With more than a decade of hospitality experience, Mary has worked in some of the most celebrated restaurants in the world. To get more specific research shows working with a 3rd-party delivery system raises sales (on average) up to 20%. Like all small businesses, ghost kitchens need insurance to cover them in case of accidents, food-borne illness, or employee injury. You can list your ghost kitchen on every third-party platform that operates in your location. Currently, no other states support a legal way for cooks to operate home-based restaurants, though several states currently have bills under review. Between relying on third-party platforms and evolving to operate an in-house order and delivery operation, you might need some stepping stones. Assuming you have excess capacity with unused labor and kitchen space, theres no reason you cant create new virtual brands. It may even be worthwhile to offer a free meal to local food Instagrammers to boost your ghost kitchens visibility.
Alternatively, ghost kitchens that accept online orders and payments via their own online ordering site can hail third-party drivers on-demand for a flat rate per order. If you are adding a ghost kitchen as an additional revenue stream to an existing restaurant, you can skip this and move to step 3. In most cases, starting a ghost kitchen will cost a lot less than opening a traditional restaurant or starting a food truck. You cut down on the cost of equipment, deal with less legal paperwork, and can start selling almost immediately. We got some insights from John Kelly, CEO of Zenreach, a company that works closely with restaurants to increase traffic. At the end of the day, Greenspan stated, as an operator, you have to figure everything out . On paper, its quicker and cheaper to launch your business if customer interaction is strictly virtual. In addition to your menu ingredients, you need to think about how you will package each food for travel. To speed the sign-up process, youll need to have a few things handy: You start by navigating to the platform site and finding the area designated for merchants or partner restaurants. Most platforms signup pages operate similarly, so lets take a look at DoorDash as an example: First, navigate to the Partner sign up page from the DoorDash homepage. We asked Eric if ghost kitchens and delivery was something a large non-restaurant brand could use. Signing up for third-party platforms is easy, and the contracts are nonexclusive. Post was not sent - check your email addresses! To streamline your ghost kitchen operation and prepare it for growth, adding a point-of-sale (POS) system is a good idea. You can also market your ghost kitchen on social media sites. These virtual restaurants only require a small staff and about half the permits and 10% of the capital required for a traditional brick-and-mortar restaurant. Now that you have some of the dry business stuff out of the way, its time to get creative. The Best Small Business Checking Accounts, Ways to Get the Best Business Logo Design (+ Inspiring Examples), Small Business Administrations directory, Customer relationship management (CRM) software, ranking of restaurant online ordering software, May require additional steps of creating a business plan and finding investors, May need to purchase equipment, depending on kitchen, Location may be far from residential customers and city centers, Locations in large cities fill quickly; you may end up on a waitlist, Orders, payments, and delivery are taken care of, High commission fees, especially for marketing and promotions, Locked into platforms payment processing fees, Can be tricky to stay on top of tablet orders, Requires additional software and hardware, Can offer deals and promotions to customers at no additional cost, Can shop for best payment processing rates, Lower cost of direct orders offsets third-party commissions, Requires your staff to pay attention to multiple order streams and promotions, New customers can find you on third-party platforms, Requires more robust hardware and software, You can convert third-party customers to direct-ordering customers with deals and promotions, Your location address, phone number, and email address, A PDF copy of your menu or a web link to your menu.
You could, however, easily use your existing kitchen as a virtual restaurant to work on a profitable delivery model. Then you send out orders from the rented kitchen space.
Youll need to open accounts with wholesale distributors to keep your kitchen supplied with food, beverages, and takeout containers. Ghost kitchens dont have to operate on third-party platforms, though most do. To drive sales, you can include direct links to your online ordering site on your accounts and even on individual posts. And when you hit on something that truly works, youll be in a position to quickly grow within the kitchens location. New York, NY 10003-1502, California Privacy Rights | Privacy | Terms | Sitemap. You can start with one ordering and delivery strategysay, relying on third-party platforms exclusivelyand shift to another as your business grows. Square charges $1.50 per third-party delivery, and the platforms charge their own rates separately. Whether youre trying to dominate a food category (like pizza) or trying to be the best in your own niche, the opportunities are real. Once you have virtual brands that are profitable, a ghost kitchen could be a good way to scale inside of that neighborhood, especially if youre limited by your food trucks capacity. This helps keep everyone on the same page.
Square supports two options for delivery: on-demand third-party delivery or in-house delivery. At an absolute minimum, your brand should have accounts on both Facebook and Instagram. Whether it works or not is still to be seen, so we encourage readers to view ghost kitchens for what they are, an experiment that is still running. Virtual brands are frequently basked by celebrities, boosting the brands visibility. Weve started a kitchen rentals directory: Check it out here. For ghost kitchens, getting a complete brand kit is also a good idea.
Brands like Future Foods, Nextbite, Virtual Dining Concepts, and The Local Culinary develop virtual restaurant conceptssometimes partnering with influencers or public figuresto pitch to existing restaurants as add-on businesses. I have a fried chicken and burger concept.
Cassias a fine dining Vietnamese restaurant. These screens can separate orders by prep area and have the added benefit of color-coding orders as they are completed. Though, if you live in a county that allows MEHKOs, there is usually nothing prohibiting you from delivering food from a home-based restaurant yourself or offering the food for takeout. I have a New York City deli concept, Greenspan says, And Ive got an all day California breakfast concept.
We recommend trying understand what other brands are doing, or finding a good consultant (like Greenspan) that has experience with virtual brands and ghost kitchens. .
The slideshow below can give you some inspiration. Since 64% of consumers said it is important for packaging to be recyclable and 74% of consumers stated they would pay more for sustainable packaging, we focused on eco-friendly options. If you have a couple of experienced line cooks who are familiar with your style of food, training may take only a couple of days. Think of a famous tv show or a large company like American Express creating a virtual food brand to extend its footprint with new customers. A chicken wing concept is more likely to attract repeat orders with a name like Wing King rather than Third Street Bistro.
(Image from World Centric), These cold cups from Fabri-Kal use the same size lids regardless of the cup's size.
Heres how to start a ghost kitchen in 13 steps: The first step to getting your ghost kitchen off the ground is choosing a concept.
(Image from Fabri-Kal), These double wall hot cups from World Centric can be custom printed to reflect your brand. The delivery revolution has birthed entirely new types of businesses hoping to capitalize on this trend, but most curious (and controversial) is the ghost kitchen a uniquely 21st-century innovation that promises to optimize & expand delivery service at (seemingly) minimal cost. You can find freelancers in virtually every price range, but you should plan to spend anywhere from $50 to $400 for a logo design. If you work in a shared commercial kitchen like CloudKitchens, you may also need to supply your own equipment.
With lower upfront costs and no need for marketing, putting up a virtual brand on delivery apps and seeing what happens seems like the lowest risk option.
According to Greenspan, the possibilities for using ghost kitchens and delivery as a marketing tool are endless. Besides the significant downside of paying high commission fees, working with third-party delivery apps means you wont get any of that customer data.
(Image from Worldc Centric), This vented cardboard clamshell helps keep fried foods crisp in transport. Entrepreneurs can test their product before fully committing to a food truck or brick and mortar. Other companies in this space are popping up in major cities around the US, and include various facilities that have kitchen space for rent.
If you dont have experience with virtual brands, launching them out of a separate ghost kitchen wouldnt make much sense. You should engage in it, but just be careful..
The simple answer is because food delivery is exploding. Its also a company that Greenspan has used to launch several virtual brands. Once youve settled on a concept and a name, youll need to get some business bits out of the way. Whether your strategy is to disengage or to engage, you need to have a strategy for food delivery.. A brand kit typically comes with multiple copies of your logo that are optimized for various social media platforms, printed media, and website use. And then you organize with these delivery companies and tell them, This is my address, this is where I am, come pick up. Put them in the apps file system and create multiple delivery brands out of that one truck.. Shared commercial kitchen spaces are easier to find in recent years. most restaurants lose money when they use delivery apps. A quick search for ghost kitchen logo on Fiverr yields portfolios from several eye-catching designers. Ghost kitchens are generally a low-cost affair, but costs can climb up to $30,000. Most restaurant POS systems have CRM tools. But hes already got cooks, hes already paying the real estate on the kitchen, and hes already got excess product. Any third-party delivery platform you work with provides you with a tablet to receive orders. The costs range from around $50 to $500, depending on where you are located. (Image from Square), You can allow pickup or delivery orders. If you upgrade to the Square for Restaurants POS, you can integrate with multiple third-party delivery platforms as well and receive all of your online orders on one central tablet. Weve broken it down by where in your food business journey you are: If you have no experience in the food industry, ghost kitchens may seem like a great way to test out your food concepts. The lowest cost option, of course, is to take the photos yourself.
Suppose you lease your ghost kitchen from a shared commercial kitchen or sublease from an existing restaurant. Preferential marketing placement that lists your kitchen above others serving similar foods or offers free delivery often incurs a higher commission rate. You can increase your odds of finding a good ghost kitchen staff by. (Image from DoorDash), Once your sign-up is complete, you'll receive an email with a link to your DoorDash Merchant portal. Ghost kitchens operate with tight margins and a high volume of sales. Crowdfunding is a great option, as is reaching out to friends and family for contributions or loans. Some ghost kitchens operate independently, relying on social media advertising to drive customers to their independent online ordering site.
For example, Tablevibeis an app that allows you to add QR codes to your delivery receipts. In most cases, youll have to begin the sign-up process to see if the app operates in your area. (Image from Restaurantware), Clear bowls in various sizes are ideal for salads and cold dishes.
You can find all his concepts here: https://www.altgrubfaction.com/.
Thats one question were still figuring out together. Pricing for Incfiles Business License Research Package is $99. To encourage new orders, your food needs to stand apart from competitors on the same ordering site. However, be aware that opening a ghost kitchen or virtual restaurant requires a lot of initiative and research on your part. You can run an independent ghost kitchen from a freestanding commercial kitchen space and a shared commercial kitchen, or sublease space from an existing restaurant. Recently, third-party platforms like DoorDash and Grubhub have carved out varying levels of delivery service. Busy kitchens may prefer KDS screens in place of kitchen printers. There are additional fees for delivery, which well explore in detail below. In mid March of this year, Dog Haus launched The Absolute Brands, a new restaurant group comprised of their original hot dog brand as well as eight new concepts. (Image from WorldCentric). Mary King is an expert retail and restaurant contributor at Fit Small Business. You can find detailed instructions and a template in our guide How to Write a Restaurant Business Plan. If, however, you sublease from an existing restaurant or lease space in a shared commercial kitchen, youll want to verify that the kitchen has the proper permits in place before laying down rent and security deposits. You may not need delivery management software right away, but it is good to have it on your radar. Along with the foot traffic youll generate, you can sell virtual brands to whoever you think is your target customer, from college students to busy working parents. If you have the staff and the space, a virtual franchise can be a low-risk way to test the ghost kitchen concept. It may take a couple of weeks before you see some sales volume. Ghost kitchens just started popping up recently.
There are several types of business structures; the most common are: Most ghost kitchens will find that an LLC is the best fit since it protects your personal assets in the event of a lawsuit or bankruptcy. Whether your strategy is to disengage or to engage, you need to have a strategy for food delivery, Greenspan states, And it needs to be thought through because its a significant player in the landscape and its not going away.. Take care to read the fine print of these marketing deals, though. Twitter
Adding a POS system to your ghost kitchen operation can save you from tablet hell. (Image from Deliverect). But they dont really care, because when they turn on the app they see Canters and know who that is. (Image from Square), Once you have an account, you can create your Square Online store from your Square Dashboard. Great chef, but probably could use a bit more business, so they created a Vietnamese rice bowl concept; available for delivery only..
The goal is for each one of them to top their market..
For more information on finding the best suppliers, see our complete guide to restaurant food suppliers. Instagram and Facebook get the attention of a ton of foodies and are home to a massive number of food influencers. When you turn on those apps, its not curated, right? So if you work with three different platforms, youll have three separate merchant portals and potentially three different tablets. In that case, you can reach out to restaurants that operate during limited hours (breakfast only, dinner only, etc.) Dont be discouraged if your first days or weeks are on the slow side.
Renting a food truck for a party will vary depending on what type of cuisine you want, how many guests Sitemap | Privacy Policy | Terms & Conditions 2022 Roaming Hunger. The marketing value of storefronts is underrated he says, and ghost kitchen operators need to recognize the increased pressure and challenge to market your concept., Competition in ghost kitchens can be fierce.
However, be aware there wont necessarily be a clear path to follow in the immediate future. (Image from DoorDash), You'll next be prompted to enter your business bank account information and confirm that you agree to DoorDash's Terms and Conditions.
You can program printers to print hot and cold items at separate stations and set up a receipt printer to print sticky labels with delivery information to enclose bags.
He emphatically said yes. (Image from DoorDash), After choosing a plan, you will be prompted to select your preferred hardware for receiving orders. The baseline POS is free and has no long term contracts, so its a good fit for ghost kitchens. To explain further, ghost kitchens are a bet that the future of food lies in delivery. You need a business bank account to receive payments from third-party platforms or payment processors and to pay suppliers. Brand kits tend to be pricey, but you can generally find them for around $350 to $800, depending on the designers skill level.
If they love the food, they will be more likely to search for your restaurant if the name is memorable and reminds them of the dish they loved. However, once you enter your business address, the system will generally let you know if its service is unavailable in your location. (Image from DoorDash), Ghost kitchens should select "Virtual/Online Only" as their business type. For step-by-step guidance, see How to Set up an LLC using LegalZoom.
Unless you live within three and a half miles, press creates frustration rather than prosperity, he noted, Its just, Wow, I sure wish I could try that, but I dont live in Koreatown, I dont go to USC, I dont live or work downtown, right? Well, if Im not in those four categories and I read press about Eric Greenspans new hot chicken or read in Eater LA about Brekkie Breakfast Burritos, Im just frustrated because I cant try it anyway.. Because storage space can be limited in a ghost kitchen, look for suppliers that deliver to your location multiple times per week so that you dont overtax your refrigerators and freezers. Third-party delivery platforms offer multiple marketing tools that can boost your kitchens visibility on their sites.
Depending on your culinary ability, you may also need to hire a chef to develop your recipes. (Image from Square), You can toggle on delivery via on-demand third-party drivers or an in-house team. That doesnt necessarily mean ghost kitchens are a bad choice. Like any restaurant, your ghost kitchen will need several permits and licenses from your local fire, health, and tax authorities.
When somebody in downtown Los Angeles orders a reuben from Canters, they probably assume its from Canters brick and mortar location on Fairfax, when its obviously not. With more than a decade of hospitality experience, Mary has worked with some of the best restaurants in the world, and some of the most forward-thinking hospitality programs in the country. Sorry, your blog cannot share posts by email. If that is outside your budget, youll need to raise funds. Greenspan explains: Some kitchens focus on multiple brands of one item like pizza or burgers. It doesnt feel like theyre all cross-utilizing product, but they are. Facebook Take the ingredients youre already using to create new menu items (or existing menu items) and brand them towards delivery customers. One of our clients in particular, a craft-casual hot dog and sausage concept called Dog Haus, has seen terrific results. Operating with multiple tablets for several delivery apps has earned an industry nickname, tablet hell. Beyond cluttering your prep areas, tablet hell has other drawbacks. Your ghost kitchen needs at least a few staff members to keep up with order flow during busy times. Keep in mind, though; youll get a tablet for each platform you work with. Ghost kitchens can be used to launch an entirely new business, or to expand the delivery range for an existing brand. Large brands can also partner up with successful chefs and restaurants to increase their reach and tap into a wider audience. For a ghost kitchen, customer data is precious. The licenses required can vary by location. From there, you get your brand onto an app like UberEats or DoorDash, and (hopefully) start getting customers.
You dont need a photo of every item on your menu; great images of your top five to 10 items are usually enough to get started. Most ghost kitchens rely on several third-party delivery platforms to boost their visibility. Youll need to train your team to cook your menu items and package them for delivery. (Image from Novolex), You can transport hoagies and subs intact with a sturdy cardboard clamshell. It could also help to expand the delivery range of an existing business, as was the case for Canters.
One of the most appealing aspects of a ghost kitchen is its flexibility. That is not the case when you turn on UberEats or DoorDash.. Your ghost kitchen concept is, essentially, your menu and your brand name. So while rent may be attractive in low-income areas, youre not likely to find suitable customers. Fees apply to either arrangement. Be flexible, and be ready to add new concepts to your kitchen as consumer tastes change or you get a fresh menu idea. For inspiration, see Ways to Get the Best Business Logo Design (+ Inspiring Examples). Greenspan cites a new kind of obstacle. Using a KDS also gives you searchable data points to gauge the efficiency of your kitchen operation so that you can quickly identify opportunities for improvement. Customers scan the code and are prompted to provide feedback to you directly. As your orders start to come in, keep an eye on what is selling and solicit customer feedback. After talking to Greenspan, however, its not clear that you have a better chance at success, even if the entry costs are lower than other options. This can be a time-intensive strategy, so most ghost kitchens at least get their start on third-party platforms and then build independent online ordering and delivery pipelines later. (Image from DoorDash), From the Merchant portal, you can view your sales, edit your menus and business hours, and explore other data. I have an Asian-Latin fusion concept. With a ghost kitchen, you rent from a landlord at a facility like Kitchens United or Cloud Kitchens, usually located in densely populated areas. He answered some of the most important questions business owners have and took us into the world of ghost kitchens, virtual brands, and the pitfalls and opportunities that he sees in food delivery. Youve already done the hard work, so adding your next concept will be a piece of cake. (Image from Square), Finally, you can choose to find a custom domain (for a monthly membership fee) or use a Square subdomain for free.
iEight Sushi is an example of a ghost kitchen that went the opposite directionit started with independent order and delivery streams but now offers delivery through Grubhub. If youre able to successfully launch a virtual brand out of your own kitchen, then a ghost kitchen could be a great next move to expand your location footprint. This is probably the question most of our readers have.
Heres what he had to say: Yes, weve absolutely heard a number of success stories about restaurants who have implemented the ghost kitchen model.
The ghost kitchen concept has been developing since the early 2010s, but consumer demand for food delivery in 2020 led to an explosion in ghost kitchens. The best way to keep your ghost kitchen profitable is to leverage the tools provided by third-party delivery platforms to grow your own in-house ordering and delivery streams and log customer data to help you grow your operation. With your menu, branding, and staff in place, youre ready to start receiving orders! First, you'll need to create a Square account.
And if you are a brand thats interested in these types of opportunities, check out RMNG, our experiential marketing agency. They have their own established brick and mortar locations (or food trucks), and use their existing kitchens to create additional, delivery-exclusive menus. Ghost kitchens are an exciting, low-cost way to enter the restaurant industry. Unlike traditional brick-and-mortar restaurants, ghost kitchens names and menus need to be optimized to perform well in online searches.
Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you.
(Image from Square), Square's site creator allows you to easily add content blocks to your site, including Instagram image carousels and customer testimonials. You can find all the forms you need to register your LLC on your states official business registration website. But no ones gonna help you with that [stuff] except you., First, the rise of delivery and mobile apps are something to be aware of. The reason you pay more money to rent for a storefront is because people will walk into your restaurant, Greenspan says. If your finished dish doesnt look like the image, however, your customers may be disappointed, and you may get many complaints and requests for refunds. The amount of training your staff requires will depend on the size and complexity of your menu and your employees experience level.
Of course, one downside is that food trucks lack storage, limiting how much food can be produced. To keep more of your money in your business, it may ultimately make the most sense to hire your own team of delivery drivers. (Image from DoorDash), The signup screen will prompt you to choose a plan; either Basic, Plus, or Premier. There are a couple of steps to creating your ghost kitchen concept. On the other hand, if your team has little kitchen experience, you should allow at least a week. As Greenspan says: The virtual brand is to get more eyeballs and make more sales for the operator. And because youre mobile, you can go anywhere in town and try to set up (delivery) shop. You can also look for a POS that includes delivery management tools. Its a virtual real estate game that increases your chance of capturing a customer looking for a specific dish.. (Image from Square), You add items to your Square Online store via the Square Dashboard.
You can explore other business structures in more detail by checking out our guide to choosing a business structure. With more than a decade of hospitality experience, Mary has worked in some of the most celebrated restaurants in the world. To get more specific research shows working with a 3rd-party delivery system raises sales (on average) up to 20%. Like all small businesses, ghost kitchens need insurance to cover them in case of accidents, food-borne illness, or employee injury. You can list your ghost kitchen on every third-party platform that operates in your location. Currently, no other states support a legal way for cooks to operate home-based restaurants, though several states currently have bills under review. Between relying on third-party platforms and evolving to operate an in-house order and delivery operation, you might need some stepping stones. Assuming you have excess capacity with unused labor and kitchen space, theres no reason you cant create new virtual brands. It may even be worthwhile to offer a free meal to local food Instagrammers to boost your ghost kitchens visibility.
Alternatively, ghost kitchens that accept online orders and payments via their own online ordering site can hail third-party drivers on-demand for a flat rate per order. If you are adding a ghost kitchen as an additional revenue stream to an existing restaurant, you can skip this and move to step 3. In most cases, starting a ghost kitchen will cost a lot less than opening a traditional restaurant or starting a food truck. You cut down on the cost of equipment, deal with less legal paperwork, and can start selling almost immediately. We got some insights from John Kelly, CEO of Zenreach, a company that works closely with restaurants to increase traffic. At the end of the day, Greenspan stated, as an operator, you have to figure everything out . On paper, its quicker and cheaper to launch your business if customer interaction is strictly virtual. In addition to your menu ingredients, you need to think about how you will package each food for travel. To speed the sign-up process, youll need to have a few things handy: You start by navigating to the platform site and finding the area designated for merchants or partner restaurants. Most platforms signup pages operate similarly, so lets take a look at DoorDash as an example: First, navigate to the Partner sign up page from the DoorDash homepage. We asked Eric if ghost kitchens and delivery was something a large non-restaurant brand could use. Signing up for third-party platforms is easy, and the contracts are nonexclusive. Post was not sent - check your email addresses! To streamline your ghost kitchen operation and prepare it for growth, adding a point-of-sale (POS) system is a good idea. You can also market your ghost kitchen on social media sites. These virtual restaurants only require a small staff and about half the permits and 10% of the capital required for a traditional brick-and-mortar restaurant. Now that you have some of the dry business stuff out of the way, its time to get creative. The Best Small Business Checking Accounts, Ways to Get the Best Business Logo Design (+ Inspiring Examples), Small Business Administrations directory, Customer relationship management (CRM) software, ranking of restaurant online ordering software, May require additional steps of creating a business plan and finding investors, May need to purchase equipment, depending on kitchen, Location may be far from residential customers and city centers, Locations in large cities fill quickly; you may end up on a waitlist, Orders, payments, and delivery are taken care of, High commission fees, especially for marketing and promotions, Locked into platforms payment processing fees, Can be tricky to stay on top of tablet orders, Requires additional software and hardware, Can offer deals and promotions to customers at no additional cost, Can shop for best payment processing rates, Lower cost of direct orders offsets third-party commissions, Requires your staff to pay attention to multiple order streams and promotions, New customers can find you on third-party platforms, Requires more robust hardware and software, You can convert third-party customers to direct-ordering customers with deals and promotions, Your location address, phone number, and email address, A PDF copy of your menu or a web link to your menu.
You could, however, easily use your existing kitchen as a virtual restaurant to work on a profitable delivery model. Then you send out orders from the rented kitchen space.
Youll need to open accounts with wholesale distributors to keep your kitchen supplied with food, beverages, and takeout containers. Ghost kitchens dont have to operate on third-party platforms, though most do. To drive sales, you can include direct links to your online ordering site on your accounts and even on individual posts. And when you hit on something that truly works, youll be in a position to quickly grow within the kitchens location. New York, NY 10003-1502, California Privacy Rights | Privacy | Terms | Sitemap. You can start with one ordering and delivery strategysay, relying on third-party platforms exclusivelyand shift to another as your business grows. Square charges $1.50 per third-party delivery, and the platforms charge their own rates separately. Whether youre trying to dominate a food category (like pizza) or trying to be the best in your own niche, the opportunities are real. Once you have virtual brands that are profitable, a ghost kitchen could be a good way to scale inside of that neighborhood, especially if youre limited by your food trucks capacity. This helps keep everyone on the same page.
Square supports two options for delivery: on-demand third-party delivery or in-house delivery. At an absolute minimum, your brand should have accounts on both Facebook and Instagram. Whether it works or not is still to be seen, so we encourage readers to view ghost kitchens for what they are, an experiment that is still running. Virtual brands are frequently basked by celebrities, boosting the brands visibility. Weve started a kitchen rentals directory: Check it out here. For ghost kitchens, getting a complete brand kit is also a good idea.
Brands like Future Foods, Nextbite, Virtual Dining Concepts, and The Local Culinary develop virtual restaurant conceptssometimes partnering with influencers or public figuresto pitch to existing restaurants as add-on businesses. I have a fried chicken and burger concept.
Cassias a fine dining Vietnamese restaurant. These screens can separate orders by prep area and have the added benefit of color-coding orders as they are completed. Though, if you live in a county that allows MEHKOs, there is usually nothing prohibiting you from delivering food from a home-based restaurant yourself or offering the food for takeout. I have a New York City deli concept, Greenspan says, And Ive got an all day California breakfast concept.
We recommend trying understand what other brands are doing, or finding a good consultant (like Greenspan) that has experience with virtual brands and ghost kitchens. .
The slideshow below can give you some inspiration. Since 64% of consumers said it is important for packaging to be recyclable and 74% of consumers stated they would pay more for sustainable packaging, we focused on eco-friendly options. If you have a couple of experienced line cooks who are familiar with your style of food, training may take only a couple of days. Think of a famous tv show or a large company like American Express creating a virtual food brand to extend its footprint with new customers. A chicken wing concept is more likely to attract repeat orders with a name like Wing King rather than Third Street Bistro.
(Image from World Centric), These cold cups from Fabri-Kal use the same size lids regardless of the cup's size.
Heres how to start a ghost kitchen in 13 steps: The first step to getting your ghost kitchen off the ground is choosing a concept.
(Image from Fabri-Kal), These double wall hot cups from World Centric can be custom printed to reflect your brand. The delivery revolution has birthed entirely new types of businesses hoping to capitalize on this trend, but most curious (and controversial) is the ghost kitchen a uniquely 21st-century innovation that promises to optimize & expand delivery service at (seemingly) minimal cost. You can find freelancers in virtually every price range, but you should plan to spend anywhere from $50 to $400 for a logo design. If you work in a shared commercial kitchen like CloudKitchens, you may also need to supply your own equipment.
With lower upfront costs and no need for marketing, putting up a virtual brand on delivery apps and seeing what happens seems like the lowest risk option.
According to Greenspan, the possibilities for using ghost kitchens and delivery as a marketing tool are endless. Besides the significant downside of paying high commission fees, working with third-party delivery apps means you wont get any of that customer data.
(Image from Worldc Centric), This vented cardboard clamshell helps keep fried foods crisp in transport. Entrepreneurs can test their product before fully committing to a food truck or brick and mortar. Other companies in this space are popping up in major cities around the US, and include various facilities that have kitchen space for rent.
If you dont have experience with virtual brands, launching them out of a separate ghost kitchen wouldnt make much sense. You should engage in it, but just be careful..
The simple answer is because food delivery is exploding. Its also a company that Greenspan has used to launch several virtual brands. Once youve settled on a concept and a name, youll need to get some business bits out of the way. Whether your strategy is to disengage or to engage, you need to have a strategy for food delivery.. A brand kit typically comes with multiple copies of your logo that are optimized for various social media platforms, printed media, and website use. And then you organize with these delivery companies and tell them, This is my address, this is where I am, come pick up. Put them in the apps file system and create multiple delivery brands out of that one truck.. Shared commercial kitchen spaces are easier to find in recent years. most restaurants lose money when they use delivery apps. A quick search for ghost kitchen logo on Fiverr yields portfolios from several eye-catching designers. Ghost kitchens are generally a low-cost affair, but costs can climb up to $30,000. Most restaurant POS systems have CRM tools. But hes already got cooks, hes already paying the real estate on the kitchen, and hes already got excess product. Any third-party delivery platform you work with provides you with a tablet to receive orders. The costs range from around $50 to $500, depending on where you are located. (Image from Square), You can allow pickup or delivery orders. If you upgrade to the Square for Restaurants POS, you can integrate with multiple third-party delivery platforms as well and receive all of your online orders on one central tablet. Weve broken it down by where in your food business journey you are: If you have no experience in the food industry, ghost kitchens may seem like a great way to test out your food concepts. The lowest cost option, of course, is to take the photos yourself.
Suppose you lease your ghost kitchen from a shared commercial kitchen or sublease from an existing restaurant. Preferential marketing placement that lists your kitchen above others serving similar foods or offers free delivery often incurs a higher commission rate. You can increase your odds of finding a good ghost kitchen staff by. (Image from DoorDash), Once your sign-up is complete, you'll receive an email with a link to your DoorDash Merchant portal. Ghost kitchens operate with tight margins and a high volume of sales. Crowdfunding is a great option, as is reaching out to friends and family for contributions or loans. Some ghost kitchens operate independently, relying on social media advertising to drive customers to their independent online ordering site.
For example, Tablevibeis an app that allows you to add QR codes to your delivery receipts. In most cases, youll have to begin the sign-up process to see if the app operates in your area. (Image from Restaurantware), Clear bowls in various sizes are ideal for salads and cold dishes.
You can find all his concepts here: https://www.altgrubfaction.com/.
Thats one question were still figuring out together. Pricing for Incfiles Business License Research Package is $99. To encourage new orders, your food needs to stand apart from competitors on the same ordering site. However, be aware that opening a ghost kitchen or virtual restaurant requires a lot of initiative and research on your part. You can run an independent ghost kitchen from a freestanding commercial kitchen space and a shared commercial kitchen, or sublease space from an existing restaurant. Recently, third-party platforms like DoorDash and Grubhub have carved out varying levels of delivery service. Busy kitchens may prefer KDS screens in place of kitchen printers. There are additional fees for delivery, which well explore in detail below. In mid March of this year, Dog Haus launched The Absolute Brands, a new restaurant group comprised of their original hot dog brand as well as eight new concepts. (Image from WorldCentric). Mary King is an expert retail and restaurant contributor at Fit Small Business. You can find detailed instructions and a template in our guide How to Write a Restaurant Business Plan. If, however, you sublease from an existing restaurant or lease space in a shared commercial kitchen, youll want to verify that the kitchen has the proper permits in place before laying down rent and security deposits. You may not need delivery management software right away, but it is good to have it on your radar. Along with the foot traffic youll generate, you can sell virtual brands to whoever you think is your target customer, from college students to busy working parents. If you have the staff and the space, a virtual franchise can be a low-risk way to test the ghost kitchen concept. It may take a couple of weeks before you see some sales volume. Ghost kitchens just started popping up recently.
There are several types of business structures; the most common are: Most ghost kitchens will find that an LLC is the best fit since it protects your personal assets in the event of a lawsuit or bankruptcy. Whether your strategy is to disengage or to engage, you need to have a strategy for food delivery, Greenspan states, And it needs to be thought through because its a significant player in the landscape and its not going away.. Take care to read the fine print of these marketing deals, though. Twitter
Adding a POS system to your ghost kitchen operation can save you from tablet hell. (Image from Deliverect). But they dont really care, because when they turn on the app they see Canters and know who that is. (Image from Square), Once you have an account, you can create your Square Online store from your Square Dashboard. Great chef, but probably could use a bit more business, so they created a Vietnamese rice bowl concept; available for delivery only..
The goal is for each one of them to top their market..
For more information on finding the best suppliers, see our complete guide to restaurant food suppliers. Instagram and Facebook get the attention of a ton of foodies and are home to a massive number of food influencers. When you turn on those apps, its not curated, right? So if you work with three different platforms, youll have three separate merchant portals and potentially three different tablets. In that case, you can reach out to restaurants that operate during limited hours (breakfast only, dinner only, etc.) Dont be discouraged if your first days or weeks are on the slow side.
Renting a food truck for a party will vary depending on what type of cuisine you want, how many guests Sitemap | Privacy Policy | Terms & Conditions 2022 Roaming Hunger. The marketing value of storefronts is underrated he says, and ghost kitchen operators need to recognize the increased pressure and challenge to market your concept., Competition in ghost kitchens can be fierce.
However, be aware there wont necessarily be a clear path to follow in the immediate future. (Image from DoorDash), You'll next be prompted to enter your business bank account information and confirm that you agree to DoorDash's Terms and Conditions.
You can program printers to print hot and cold items at separate stations and set up a receipt printer to print sticky labels with delivery information to enclose bags.
He emphatically said yes. (Image from DoorDash), After choosing a plan, you will be prompted to select your preferred hardware for receiving orders. The baseline POS is free and has no long term contracts, so its a good fit for ghost kitchens. To explain further, ghost kitchens are a bet that the future of food lies in delivery. You need a business bank account to receive payments from third-party platforms or payment processors and to pay suppliers. Brand kits tend to be pricey, but you can generally find them for around $350 to $800, depending on the designers skill level.
If they love the food, they will be more likely to search for your restaurant if the name is memorable and reminds them of the dish they loved. However, once you enter your business address, the system will generally let you know if its service is unavailable in your location. (Image from DoorDash), Ghost kitchens should select "Virtual/Online Only" as their business type. For step-by-step guidance, see How to Set up an LLC using LegalZoom.
Unless you live within three and a half miles, press creates frustration rather than prosperity, he noted, Its just, Wow, I sure wish I could try that, but I dont live in Koreatown, I dont go to USC, I dont live or work downtown, right? Well, if Im not in those four categories and I read press about Eric Greenspans new hot chicken or read in Eater LA about Brekkie Breakfast Burritos, Im just frustrated because I cant try it anyway.. Because storage space can be limited in a ghost kitchen, look for suppliers that deliver to your location multiple times per week so that you dont overtax your refrigerators and freezers. Third-party delivery platforms offer multiple marketing tools that can boost your kitchens visibility on their sites.
Depending on your culinary ability, you may also need to hire a chef to develop your recipes. (Image from Square), You can toggle on delivery via on-demand third-party drivers or an in-house team. That doesnt necessarily mean ghost kitchens are a bad choice. Like any restaurant, your ghost kitchen will need several permits and licenses from your local fire, health, and tax authorities.
When somebody in downtown Los Angeles orders a reuben from Canters, they probably assume its from Canters brick and mortar location on Fairfax, when its obviously not. With more than a decade of hospitality experience, Mary has worked with some of the best restaurants in the world, and some of the most forward-thinking hospitality programs in the country. Sorry, your blog cannot share posts by email. If that is outside your budget, youll need to raise funds. Greenspan explains: Some kitchens focus on multiple brands of one item like pizza or burgers. It doesnt feel like theyre all cross-utilizing product, but they are. Facebook Take the ingredients youre already using to create new menu items (or existing menu items) and brand them towards delivery customers. One of our clients in particular, a craft-casual hot dog and sausage concept called Dog Haus, has seen terrific results. Operating with multiple tablets for several delivery apps has earned an industry nickname, tablet hell. Beyond cluttering your prep areas, tablet hell has other drawbacks. Your ghost kitchen needs at least a few staff members to keep up with order flow during busy times. Keep in mind, though; youll get a tablet for each platform you work with. Ghost kitchens can be used to launch an entirely new business, or to expand the delivery range for an existing brand. Large brands can also partner up with successful chefs and restaurants to increase their reach and tap into a wider audience. For a ghost kitchen, customer data is precious. The licenses required can vary by location. From there, you get your brand onto an app like UberEats or DoorDash, and (hopefully) start getting customers.
You dont need a photo of every item on your menu; great images of your top five to 10 items are usually enough to get started. Most ghost kitchens rely on several third-party delivery platforms to boost their visibility. Youll need to train your team to cook your menu items and package them for delivery. (Image from Novolex), You can transport hoagies and subs intact with a sturdy cardboard clamshell. It could also help to expand the delivery range of an existing business, as was the case for Canters.
One of the most appealing aspects of a ghost kitchen is its flexibility. That is not the case when you turn on UberEats or DoorDash.. Your ghost kitchen concept is, essentially, your menu and your brand name. So while rent may be attractive in low-income areas, youre not likely to find suitable customers. Fees apply to either arrangement. Be flexible, and be ready to add new concepts to your kitchen as consumer tastes change or you get a fresh menu idea. For inspiration, see Ways to Get the Best Business Logo Design (+ Inspiring Examples). Greenspan cites a new kind of obstacle. Using a KDS also gives you searchable data points to gauge the efficiency of your kitchen operation so that you can quickly identify opportunities for improvement. Customers scan the code and are prompted to provide feedback to you directly. As your orders start to come in, keep an eye on what is selling and solicit customer feedback. After talking to Greenspan, however, its not clear that you have a better chance at success, even if the entry costs are lower than other options. This can be a time-intensive strategy, so most ghost kitchens at least get their start on third-party platforms and then build independent online ordering and delivery pipelines later. (Image from DoorDash), From the Merchant portal, you can view your sales, edit your menus and business hours, and explore other data. I have an Asian-Latin fusion concept. With a ghost kitchen, you rent from a landlord at a facility like Kitchens United or Cloud Kitchens, usually located in densely populated areas. He answered some of the most important questions business owners have and took us into the world of ghost kitchens, virtual brands, and the pitfalls and opportunities that he sees in food delivery. Youve already done the hard work, so adding your next concept will be a piece of cake. (Image from Square), Finally, you can choose to find a custom domain (for a monthly membership fee) or use a Square subdomain for free.
iEight Sushi is an example of a ghost kitchen that went the opposite directionit started with independent order and delivery streams but now offers delivery through Grubhub. If youre able to successfully launch a virtual brand out of your own kitchen, then a ghost kitchen could be a great next move to expand your location footprint. This is probably the question most of our readers have.
Heres what he had to say: Yes, weve absolutely heard a number of success stories about restaurants who have implemented the ghost kitchen model.