Ghost restaurants, delivery-only restaurants with no dining room, are a phenomenon expected to “[change] the restaurant business model,” according the headline above the January 2019 article by Forbes food tech contributor Lana Bandoim. The ghost restaurant business model, according to Bandoim, brings an alternative to aspiring restaurateurs daunted by 26% first-year failure odds opening a traditional eatery, due to high upfront investment and overhead costs. The ingredients a restauranteur needs to bring to the table to start a ghost eatery don’t extend much beyond the actual ingredients needed to craft the menu items on offer.[1]

Shared kitchen spaces apply the coworking space model ala WeWork to help startup food brands launch without large capital investments in restaurant equipment and kitchen construction. Third-party delivery services like UberEats, Postmates, and Favor eliminate the need to hire, manage, and insure delivery drivers or order-taking staff. Literally all that’s needed is a chef, possibly a friend or three to help cook, a menu and recipes, the ingredients to prepare the recipes on the menu, and the deposit and first-month’s rent in a shared kitchen space. The previously referenced Forbes writer is likely correct that ghost restaurants will see a greater success rate than traditional eateries in the coming years.

The ghost restaurant model also gives a glimmer of hope to those struggling to beat the odds and run a profitable traditional restaurant. Companies like Uber Eats are encouraging their restaurant partners to launch new menus under new deliver-only brands out of their existing locations. For example, a sushi bar could, with minimal extra ingredient and equipment requirements, launch a delivery-only Hawaiian poke bowl restaurant online while remaining a sushi bar at their physical location.[2]

Other than “cost of sales” line items like ingredients and packaging, the existing restaurants face few additional expenses as they add a delivery-only concept, or several, to their existing kitchens. Operating multiple restaurant brands from a single kitchen is a smart strategy for lowering fixed costs like rent as a percentage of sales. Food delivery apps also benefit as ghost kitchens allow them to offer in-demand cuisines to customers in their market service areas without having to source additional restaurant partners. It’s hard for apps to become a “go-to” source for food if they don’t have all of the cuisines that consumers crave.

By analyzing unfilled demand for certain cuisine types, delivery apps can help themselves by offering more of what their markets are hungry for. At the same time, the apps can leverage their understanding of unfilled delivery demand to help ghost restaurateurs operating out of existing restaurants and cooperative kitchens alike in crafting concepts and menus that will be well-received by hungry locals.

[1] Lana Bandoim, “Top Food Technology Trends You Will See In 2019,” Forbes, December 19, 2018, , accessed May 08, 2019, https://www.forbes.com/sites/lanabandoim/2018/12/18/top-food-technology-trends-you-will-see-in-2019/#10305a095a7e.

[2] Daryna P., “7 Hot Trends That Will Change the Future of the Food Delivery Industry,” RubyGarage, February 04, 2019, , accessed May 08, 2019, https://rubygarage.org/blog/food-delivery-trends-2019.

Photo by Eiliv-Sonas Aceron on Unsplash