Ghost Restaurant: Pros & Cons of Opening a Ghost Restaurant
Opening a ghost restaurant can be a great way to get your foot in the door of the restaurant industry. By starting as a ghost restaurant, you can test the waters and see if running a restaurant is really for you. There are several pros to starting out as a ghost restaurant. However, there are also some cons to consider before opening a shop.
In this blog post, we’ll discuss what is a ghost restaurant and how to open a ghost restaurant. We’ll also take a closer look at the pros and cons of starting one so that you can make an informed decision about whether or not this is the right business venture for you.
What Is a Ghost Restaurant?
A ghost restaurant is a restaurant that exists only in the digital world. There is no physical location for customers to visit. Customers order and pay for their food online or via a mobile app, and the food is then prepared and delivered by the ghost restaurant’s kitchen staff.
Ghost restaurants are becoming increasingly popular as more and more people order 24 7 food delivery instead of dining out. They offer a cost-effective way for restaurateurs to enter the food delivery market without investing in a brick and mortar location.
Established restaurants with a physical location operate some ghost restaurants. These businesses use ghost kitchens to prepare food for delivery, which frees up space in their regular kitchen for dine-in customers.
Other ghost restaurants are standalone businesses that exist solely in the digital world. These businesses often have multiple virtual locations, which allows them to reach a wider delivery area.
How to Open a Ghost Restaurant
Before you open a ghost restaurant, there are a few key things you need to do. Here’s a step-by-step guide on how to make your ghost restaurant dreams a reality:
- Create a Detailed Restaurant Business Plan
The first step to opening a ghost restaurant is creating a detailed business plan. This plan should include your restaurant’s concept, target market, menu offerings, competitors, projected costs, and revenue. It should also detail your startup costs, operating expenses, and marketing budget. Getting your ghost restaurant off the ground will be easy with a comprehensive business plan.
- Find a Commissary Kitchen
A commissary kitchen is a commercial kitchen you can rent by the hour or day. This is where you’ll do all your cooking and food preparation for your ghost restaurant. Finding a commissary kitchen close to your delivery radius is essential to minimize travel time and costs.
When searching for a commissary kitchen, be sure to find one that is clean and well-equipped with restaurant equipment. It should also have enough space to accommodate your needs.
- Pick Your Cuisine
Once you have a commissary kitchen, it’s time to decide on your restaurant’s cuisine. Will you serve pizza, burgers, Mexican food, or anything else? When selecting your cuisine, be sure to choose something you’re passionate about and know your target market will love.
This will be one of the most critical decisions, as it will dictate everything from your menu offerings to your marketing strategy.
- Obtain All Necessary Licenses
To operate legally, you’ll need to obtain any necessary licenses and permits from your city or state. These may include a business license, a food handler’s permit, and a liquor license (if you plan on serving alcohol). Failure to obtain the proper licenses and permits could result in significant fines or jail time.
- Hire a Team
Even though you’re opening a ghost restaurant, you’ll still need to hire a team to help with the day-to-day operations. This includes an executive chef or a head chef, cooks, delivery drivers, and customer service representatives.
When hiring for your ghost restaurant, be sure to find employees who are passionate about food and restaurant customer service.
- Create a Menu
One of the most fun parts of opening a ghost restaurant is creating your own unique menu. Offer a mix of popular items and some signature dishes that will make your restaurant stand out from the competition. Think about what type of dishes you want to serve, and be sure to keep your target market in mind.
Additionally, be sure to price your items competitively to make a profit.
- Select an Online Ordering System
These days, most customers prefer to order their food online or through a mobile app. As such, it’s important that you select an ordering system that is user-friendly and easy to use.
Revolution Ordering solutions offer comprehensive off-premise ordering capabilities and delivery services for restaurants. The company’s product suite includes the following:
- Order One, a direct-to-consumer omnichannel digital ordering platform
- Ground Control, a 3rd party delivery marketplace order insertion product
- Integrations with Google Food Ordering so guests can order food from Revolution’s food service clients directly through Google interfaces.
Book a demo today to streamline all of your off-premise orders and make your restaurant business more profitable.
- Develop a Marketing Plan
No matter how great your food is, you will only succeed if you have a solid marketing plan since you don’t have a physical location for customers to come in and check out. Your marketing plan should include a mix of online and offline restaurant marketing strategies (such as social media, print ads, and word-of-mouth). You will also need to create a branding strategy to make your ghost restaurant stand out from the competition.
- Launch Your Restaurant
After completing all the steps above, it’s finally time to launch your ghost restaurant. Promote your grand opening, so customers know about your new business. Additionally, ensure your team is well-trained and prepared for the influx of customers. With a little hard work and dedication, you can be successful in the world of ghost restaurants.
Are Ghost Restaurants Legal?
Yes, ghost restaurants are legal. However, there are some regulations that these businesses must follow to operate legally. For example, all food must be prepared in a licensed kitchen, and all employees must have the proper food handling certification. Additionally, ghost restaurants must comply with local zoning laws or regulations regarding commercial kitchens.
Although ghost restaurants are legal, some have raised concerns about these businesses. For example, some worry that these businesses could lead to food safety issues if proper procedures are not followed. Additionally, some critics argue that ghost restaurants may harm the restaurant industry by taking business away from traditional brick-and-mortar establishments.
Pros of Opening a Ghost Restaurant
Opening a ghost restaurant can be a great way to get out of your comfort zone and try something new. It can also be a great way to expand your customer base and reach new markets. Here are some of the pros of opening a ghost restaurant:
- Flexible Concept
You can easily customize a ghost restaurant to meet the demands of your target market. Whether you’re looking to serve healthy fare, comfort food, or anything in between, a ghost kitchen allows you to change your concept to better suit your customer’s tastes and preferences.
This means you can change your menu and offerings regularly to keep up with the latest food trends without incurring the costly investment of renovating your space.
For example, suppose you want to experiment with a new cuisine or menu item. In that case, you can launch a new virtual restaurant brand without incurring high costs or disrupting your existing business.
- Lower Start-up Costs
Ghost restaurants can be less expensive to open than traditional restaurants because you don’t need to invest in building physical infrastructures, such as a commercial kitchen or dining space. This allows you to invest your restaurant capital into other areas, such as marketing and food quality.
- Less Staff
Ghost restaurants typically require fewer employees than traditional restaurants. This is because there is no need for front of house staff, such as servers and hostesses. Additionally, ghost restaurants often have streamlined kitchen operations, which allow them to get by with a smaller staff. This can lead to significant labor cost savings for business owners.
- Capitalizing on the Rising Demand for Online Ordering
In recent years, there has been a growing demand for online ordering and delivery options, making ghost restaurants a perfect solution for capitalizing on this trend. Customers appreciate the convenience of ordering their food from the comfort of their homes or offices, and by offering this service, you can significantly boost your sales.
- Quick Start-up
Another big benefit of ghost restaurants is that they can quickly launch and operationalize. Unlike traditional restaurants, which can take months or even years, ghost restaurants can often be up and running in weeks. This is because they require less infrastructure and fewer employees. As a result, ghost restaurants offer a much shorter timeline for achieving business profitability.
- Data-Driven Insights
Because all your sales and customer data is collected digitally, they generate a wealth of data that can be used to improve your business. From tracking customer preferences to identifying patterns in order behavior, this data can give you a leg up on the competition.
Cons of Opening a Ghost Restaurant
Opening a ghost restaurant can be a great way to make money, but there are some downsides to consider before starting one.
- Reduced Interaction Between Restaurant and Customer
One potential downside of opening a ghost restaurant is that it reduces the interaction between the restaurant and its customers. This is because customers will not be able to come into the restaurant and speak to staff or see the kitchen or preparation areas. This creates a feeling of detachment or disconnection between your business and the people who are eating your food.
Additionally, this makes it harder for restaurants to build relationships with their customers and provide them with good customer service.
- Online Reputation
Another downside of opening a ghost restaurant is that it could negatively impact the business’s online reputation. This is because customers will not be able to see the food being prepared physically and will only have the option to read reviews online. If there are negative reviews, this could deter potential customers from trying the restaurant.
- Less Visibility
Another disadvantage of ghost restaurants is that they can be less visible than traditional restaurants. This is because they often do not have a physical location that people can see. It can be harder for potential customers to find out about the restaurant and its menu.
- All Meals Must Be Packaged
One final downside of opening a ghost restaurant is that all meals must be packaged and delivered to customers. Because ghost restaurants don’t have dine-in options, all of their meals must be packaged for delivery or takeout. This can add to your costs and create additional packaging waste.
Frequently Asked Questions About Ghost Restaurant
Are you interested in starting a ghost restaurant but still have questions? You’re in luck! This section will answer questions most frequently asked about ghost restaurants. Keep reading!
What Is an Example of a Ghost Restaurant?
It’s Just Wings is a prime example of a ghost restaurant. This eatery exists only to fulfill online and delivery orders. There is no dine-in option, and the kitchen staff solely focuses on preparing food for to-go customers.
How Do Ghost Restaurants Make Money?
The answer lies in their business model, which is built around delivery and take-out orders. Ghost restaurants focus on creating a menu that can be easily prepared for delivery or take-out, and they partner with third-party delivery services to get their food to customers.
This business model has a few key advantages.
- It eliminates the need for a physical location, which can be costly to rent or build.
- It allows ghost restaurants to reach a larger customer base than they would if they were limited to dine-in or take-out orders.
- It allows them to operate with a leaner staff since they don’t need servers or cooks who can handle dine-in customers.
Why Are They Called Ghost Restaurants?
Ghost restaurants are called such because they don’t have a physical space for customers to visit. There’s usually no dine-in option. Instead, customers order and pick up their food from a central location or rely on third-party delivery services to bring their food to customers’ homes and businesses.