Even before the pandemic, ghost kitchens had been all the buzz in the hospitality industry.
What is a ghost kitchen?
A ghost kitchen is a kitchen that operates in a space without a dining area. It caters specifically to online orders, and is usually a delivery-only restaurant. Ghost kitchens were on the rise before COVID-19. Now, the demand for them has only increased. People are no longer frequenting restaurants for sit-down meals like they used to. Now, they opt for safer alternatives, like online ordering and delivery. This is what makes a ghost kitchen so valuable these days.
Here are some of the benefits:
Usually, in order for a traditional restaurant to succeed, it needs to be set in a fairly trendy location. These locations offer more safety, but they come with a major price tag. This can be a major barrier to opening a new restaurant. Over time, the cost for the location alone can signal a restaurant’s demise.
For ghost kitchens, this isn’t a problem. A ghost kitchen doesn’t serve customers in-person. Because it operates via delivery, it can be located almost anywhere. Owners can easily and affordably buy or rent property in certain distressed economic areas that a full-service restaurant may not thrive in.
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Low Overhead Costs
With a ghost kitchen, you can leverage the benefits of lean production. You aren’t serving customers on-premises, so there is no need for any of the basics, like tables and chairs. You can operate out of a smaller space, so you save on floor space as well. Since there is no front-of-house, you needn’t worry about staffing any front-of-house employees, either.
You also don’t need to worry about making an impression or promoting any branding. Don’t underestimate the costs of these, either. The average cost to decorate a restaurant is $160 per square foot. Really, beyond the kitchen itself and your staff, the only necessities you need to operate a ghost kitchen are up-to-date permits, and compliance with the Department of Health sanitary standards.
Witch ghost kitchens, you aren’t bogged down by complicated operations. You can easily streamline your workflow, focusing entirely on online and phone orders. Without on-premises dining to worry about, you free up space and can easily solve challenges within your workforce.
It’s easy to become stretched thin when you operate a traditional restaurant. You have so many different processes and tasks to oversee, and that makes it hard to focus your attention on business growth or solving operational challenges. A ghost kitchen can make it easier by cutting back on the different areas that need your attention, so you are able to achieve maximum efficiency with minimum waste.
Meet Delivery Demand
With new, streamlined workflows, you heighten your ability to meet delivery demand. This will be especially necessary during the COVID-19 pandemic. Delivery demand is up across the board. Pizzeria delivery is up 44%, fast food restaurant delivery is up 64%, and delivery for fruits and veggie shops is up a whopping 160%.
With this increase in demand, it is imperative that restaurant owners are able to streamline operations and meet customer needs. Ghost kitchens provide a prime opportunity for this, since the workflows are already streamlined.
Speed to Market
On average, it costs around $275,000 to open a new restaurant. If you want to purchase land and provide parking for your guests, that number balloons up to $425,000. But the cost of opening a ghost kitchen in a popular place, such as Southern California? Only a meager $20,000. That is less than a tenth of the cost of operating a full-size restaurant with on-premises dining.
Opening up a ghost kitchen is a smart way to get in business quickly. With the simplicity of a ghost kitchen’s concept, you can have yours up and running in weeks, rather than months. You can easily purchase or rent out a small space and have everything you need. There are even some ghost kitchen rental companies that will lease out a kitchen with everything you need already installed. You can begin operating fully on day one.
Ghost Restaurants After the Pandemic
The Coronavirus pandemic has thrown the industry for a loop. Even after the pandemic passes, it will have left its permanent mark on the restaurant industry. If anything, it just increased the speed with which the industry is shifting from traditional to digital.
The increase in popularity of delivery due to high consumer demand is only in its fledgling stage. No doubt, delivery will only continue to increase. For restaurants that may have suffered during the pandemic and are too burdened financially to continue their full on-premises operations, ghost kitchens can become an effective alternative as they get back on their feet.
Opening a full restaurant post-pandemic will bring with it new challenges as the industry tries to anticipate what the new normal will look like. In the current economic environment, it may not be wise to open a traditional restaurant when it can’t yet operate at 100% capacity. For the time being, ghost kitchens may be a restaurant entrepreneur’s best bet.
Of course, it’s impossible to operate a successful restaurant of any concept without the right technology. Focus offers a range of software solutions specifically designed with the needs of restaurant owners in mind. For more information on Focus POS, contact us today!