First appeared in NewsBreak
By Aron Solomon
Ghost kitchens, also known as virtual kitchens, cloud kitchens, or dark kitchens, are commercial kitchens designed solely for the purpose of food delivery and takeout orders. Unlike traditional restaurants, ghost kitchens don’t have a storefront or dining area for customers to sit and eat. Instead, they operate entirely online and exclusively serve customers through delivery apps or their own online ordering system.
The concept of ghost kitchens has become increasingly popular in recent years due to the rise of food delivery services like Uber Eats, DoorDash, and Grubhub. These platforms have made it easier and more convenient for consumers to order food from their favorite restaurants without leaving their homes. However, this trend has also created new opportunities for entrepreneurs and restaurant owners to start businesses without the high overhead costs associated with running a traditional brick-and-mortar restaurant.
Ghost kitchens can operate in a variety of ways. Some are owned and operated by existing restaurants as a way to expand their delivery business and reach more customers. Others are owned by third-party companies that rent out kitchen space to multiple restaurants, allowing them to share overhead costs like rent, utilities, and equipment.
As Fort Lauderdale lawyer, John Lawlor, points out:
“Ghost kitchens allow restaurant owners to start businesses with lower capital requirements since they don’t need to invest in a physical storefront or dining area.”
Ghost kitchens are often located in areas with lower rents, which can help reduce overhead costs. And since ghost kitchens are designed solely for delivery and takeout orders, they can be more efficient and streamlined in their operations, leading to faster preparation times and more consistent quality.
However, there are also some serious challenges associated with ghost kitchens. One of the biggest concerns is the lack of brand recognition and customer loyalty, since customers are ordering food based on the menu and reviews rather than the physical location or ambiance of the restaurant.
Lawlor also observed that ghost kitchens come with significant costs and fees:
“Since ghost kitchens rely very heavily on delivery apps, they may be subject to the fees and commissions charged by these platforms, which can eat into profit margins and result in cad higher prices to the consumer than for similar food bought in person.”
Here is an explanatory guide on the entrance to a brand new ghost kitchen that just took over from a real and, sadly, failed, restaurant in my part of town.
How depressing is this?
Essentially, it’s a series of deep fryers, frying the same or different foods for what is right now five fake restaurants and soon to be up to a dozen.
While some see ghost kitchens as a new and innovative way for entrepreneurs and restaurant owners to start businesses with lower capital requirements and overhead costs, they’re simply a series of generic food services that replace mom and pop food businesses.
According to a report by Euromonitor International, as of 2020, Florida was one of the top five states in the United States with the highest number of ghost kitchens. The exact number of ghost kitchens in Florida may vary as the industry continues to grow and evolve, yet it’s clear that the Miami area is in a ghost kitchen boom in 2023.
It’s only the beginning. Ghost kitchens aren’t going anywhere as they offer investors and “foodpreneurs” strong potential for growth in the food industry as the trend towards delivery and takeout continues to grow at the expense of anything actually interesting.
About Aron Solomon
A Pulitzer Prize-nominated writer, Aron Solomon, JD, is the Chief Legal Analyst for Esquire Digital and the Editor-in-Chief for Today’s Esquire. He has taught entrepreneurship at McGill University and the University of Pennsylvania, and was elected to Fastcase 50, recognizing the top 50 legal innovators in the world. Aron has been featured in Forbes, CBS News, CNBC, USA Today, ESPN, TechCrunch, The Hill, BuzzFeed, Fortune, Venture Beat, The Independent, Fortune China, Yahoo!, ABA Journal, Law.com, The Boston Globe, YouTube, NewsBreak, and many other leading publications.