Ghost kitchen, dark kitchen, cloud kitchen and virtual restaurant.
Are they future business model for restaurants or just a periodical gimmick, destined to disappear without leaving any mark on the industry practices?
First, we have to answer the basic question:
What distinguishes those solutions from each other and which would be the most effective for you?
From virtual restaurant to ghost kitchen – terminology
A ghost kitchen is a professional facility adapted for the preparation of delivery-only meals. The facility accommodates space designated for meal preparation, kitchen equipment and supplies. Moreover, as it is exclusively focusing on delivery meals, it has no dining area. This enables substantial cutbacks in costs of real estate expenses and staff wages. This solution is feasible for restaurants willing to run another brand from the same localization and new food businesses.
A dark kitchen, also known as a cloud or ghost kitchen, is a food service focusing on delivery-only orders. The dark kitchen supports exclusively deliveries and pick-ups, so there is no necessity for dining space or waitstaff. Thanks to it, the business can save on space and unnecessary staff. Additionally, restaurants success is no longer dependent on localization, but rather on marketing effort and quality of provided meals.
Yet, another name for the same concept as a dark kitchen and ghost kitchen.
Cloud kitchen serves as a meal preparation facility for restaurant brands focusing on deliveries and pick-ups. Due to this fact, you can save both, on brick-and-mortar localization and waitstaff. Additionally, cloud kitchens can utilize less attractive (so less expensive) localizations, as visibility, accessibility and foot traffic are not essential for this business model.
A ghost restaurant is a food business service solely focusing on delivery orders submitted through online ordering systems or direct phone line. Despite the similarities, ghost kitchen and ghost restaurants are slightly different approaches to the same concept. Although both centered around delivery orders, ghost restaurant usually accommodates a single restaurant brand, while ghost kitchen can support a couple of brands ran from one localization.
A term similar to ghost restaurant – refers to food preparing services designed to serve customers exclusively by delivering ordered food or providing pick-ups. The main advantage of this approach is lesser real estate spending. This kind of restaurant brand can thrive in smaller and less attractive premises.
A virtual brand is a food business concept exclusively selling online through website, application or 3rd party online platform. Restaurants can start a new virtual brand, that will be only available online, and prepare meals at already existing premises.
Ghost kitchen vs ghost restaurant
To conclude, what is the fundamental difference between ghost kitchen and ghost restaurant? Ghost restaurant is a single food service brand usually utilizing one cuisine style, working out of facility adapted for food preparation. This facility is called a ghost kitchen and facilitates all meal production processes. Out of one ghost kitchen, you can support multiple restaurant concepts, also called virtual brands.
How does a ghost kitchen work?
The basic idea behind the ghost kitchen is to provide customers with the best possible menu items for the least possible cost.
How? By ditching the standard storefront strategy and focusing on delivery and pick-up orders. Therefore, without a designated dining area and facilities to accommodate customers, an entrepreneur can save on realty costs and employment of servers.
Why? Because while the dine-in customer base is stable for years, online orders are rising at least 20% every year. With this in mind, the ghost kitchen formula is focusing on these revenue streams.
Forsaking dine-in customers lets brands focus on delivering the best food experience to the client.
What are the advantages of a cloud kitchen?
One of the most substantial advantages of running ghost kitchen business is the possibility to maintain a couple of restaurant brands from one location. Thus expanding your potential customer base without the need to invest in the additional premises. You can successfully host a couple of virtual brands that represent different cuisine styles made from the same basic ingredients, all from one location.
Ghost kitchen cost-efficiency
Another profit from this business model is a huge reduction in expenses. As a dark kitchen doesn’t need dining space and waitstaff, you can save on rental and wages. Furthermore, since a cloud kitchen is not dependent on walk-in customers, you can rent a premise in less competitive localization. Remember to place your business in densely populated areas to get access to a broader client base.
Cloud kitchen delivery focus
Moreover, since this business model isn’t concerned with dining-in customers, you can center all your efforts around bringing the best menu experience to your clients. Ghost kitchens already perform a significant role in answering public demand for food delivery. Initially, this business model was focusing on small restaurants looking to expand their delivery capabilities, but many nation-wide brands (Wendy’s e.g.) adapted it to relieve their brick-and-mortar locations in traffic-heavy areas.
Reduced wait times with storefront-free kitchens
Opening a ghost kitchen in the main commercial areas is a great way to reduce the average wait time. Because the closer you are to the customer, the faster you will be able to deliver ordered meals. Many experts state that time is an essential factor for a customer seeking to order food, and most will choose earlier delivery over quality and quantity.
Safer expansion with dark kitchen
Philosophy of a dark kitchen makes expanding to a new market easier and safer because of modest upfront costs, which make expansion less threatening to business finances. Likewise, the smaller staff is easier to hire in a separate location, and the absence of a dine-in area reduces interior design costs. Last but not least, you can rent space in less desired areas to decrease real estate spending. Ghost kitchen provides an excellent opportunity to acquire new sales channels, without committing to a full-scale eatery.
How to start a cloud kitchen?
You only need a premise with proper kitchen equipment and facilities to start your cloud kitchen. You can rent workspace at specialized facilities like Cloud Kitchens or Kitchens United. Moreover, you can easily set up your own food preparation site at the rented premises, home or food truck. Lastly, you will need to hire kitchen staff to maintain food production and acquire sales channels to collect orders from customers.
Sales channels for restaurants
You have several potential methods for the order acquisition:
- direct phone call
- 3rd party online ordering platform
- online ordering system on the website
- mobile app
Direct phone call
This option seems to be the easiest to implement, you just need work phone assigned to receiving phone orders from clients. And that is exactly the worst flaw of this method, phone ordering is time-consuming both for you and your customers. Additionally, this method is prone to human-induced mistakes: little confusion or static interference on line can cause credibility crushing mistakes for your business.
3rd party online ordering platform
Lately popular, online ordering platforms (like Grubhub, DoorDash, etc.) claim to raise the number of orders by even 20%, but at what cost? Despite the rise in orders, provisions can take up to 30% of the ordered meal’s value, consequently diminishing your profit. Furthermore, when restricted solely to the ordering platform, you lose control over your online presence.
Where your brand will be placed on the 3rd party sites, is entirely out of your control.
Online food ordering system
The online food ordering system is the best solution to run on your website. Thanks to the integrated system, you will be able to conveniently receive orders on any device. Additionally, as you have total control over your website and published content, you can reach better internet visibility. Better placement in organic search results will drive more customers to your brand. Furthermore, you can set up an ordering system with ease in just 5 minutes.
The rising number of operations made with mobile devices makes mobile applications the best choice to attract customers. An easily accessible and downloadable mobile app could become the perfect first encounter with your brand. You can order and customize your own app with UpMenu free trial account.
Cloud kitchen during coronavirus pandemic
Dark kitchen trend was already springing in answer to the ever-growing online order market when the COVID-19 pandemic began. Social distancing regulations and nation-wide dine-in restrictions accelerated customer shift to delivery orders. And according to NPR, this trend is going to continue growing online ordering revenue from $27B to $240B in 2024. Some experts even state that cloud kitchen brands are better suited to work during coronavirus crisis. As the dine-in ban is in the act, storefront-free kitchens naturally economize better than brick-and-mortar locations.
Is cloud kitchen the best way to start a restaurant?
Besides the aforementioned benefits to the ghost kitchen concept, there are still a couple of drawbacks. The absence of storefront means no additional marketing value drawn from having a physical signboard. Also, advertising online you compete with a wider selection of brands than you would be selling from a brick-and-mortar location. However, with properly arranged online marketing you can keep up. To get ahead of the competition, employ marketing tools, usually available with online ordering systems. Use push notifications, e-mail marketing, and SMS campaigns to communicate with customers. Utilize promotions and coupons to draw new clients, and analyze initiated actions to determine the best course of action.
In conclusion, the cloud kitchen is a cost-effective business model, ideal for new food concepts and brand expansion. If supported with a suitable marketing effort.
How UpMenu supports ghost kitchens?
So, you want to open a ghost kitchen on your own. You waged all the pros and cons of this business model, handled the rental and furnishing of the preparation site also hired the necessary staff. What now?
You have to get customers, and what would be the best course of action to earn them? E-marketing is the answer. Online promotion is the key element for a ghost restaurant brand since they don’t have a physical storefront. Therefore, the greatest asset of ghost kitchens is also its worst flaw? Not necessarily, people spend almost 30% of their time online, exposed more likely to an advertisement banner displayed on screen than one on the television or a newspaper.
Creating an online presence should be the main goal for you, an engaging brand site connected witch social media platforms, ought to be a great start.
How to build a responsive restaurant website
Creating a website on your own can be quite challenging and time-consuming pursuit. There are plenty of website-creation tools that can assist you, pick one of the most popular CSM systems; WordPress, Squarespace of WiX to create a beautiful and responsive site. But those resolutions weren’t designed to improve restaurant sales. UpMenu’s online food ordering system is. As the name suggests, the systems’ key principle is to support food product purchases.
Why you should choose UpMenu for your ghost restaurant?
UpMenu utilizes the best WordPress restaurant themes with a thorough website-creation tool to create astonishing user-friendly restaurant sites. All templates are created with high optimization and responsiveness in mind. UpMenu resolution provides plenty of additional marketing tools like promotion engine, loyalty programs, and advertising campaigns. UpMenu also provides a push notification system to communicate with customers and interactive menus allowing instant online ordering. Furthermore, those amenities are designed to boost sales through your website and enhance its position in organic search results.
Moreover, UpMenu online ordering system has a quick and simple setup process allowing you to start selling right away.
How to start a ghost kitchen with UpMenu?
UpMenu setup for a cloud kitchen
- Create UpMenu account
Create account at upmenu.com without credit card and receive 7 day free trial.
- Select theme for your website
Choose from 20+ different menu templates and 15+ different website layouts design that fits your brand. Additionally, you can customize templates to create layout matching your brand identity.
- Create online menu for your virtual brand
Add your offer and separate it into different product sections.
- Set delivery zones
Use the map to set specific delivery zones.
- Configure and order mobile app
A mobile app is a great additional source of traffic, enhancing further customer experience. Add your logo, choose colors, menu layout and place an order. Next, UpMenu will publish your mobile application on AppStore and Google Play in a matter of days.
- Create new website or install online ordering on existing one
- Start receiving orders
Receive online orders via any web browser or by a dedicated mobile app.
- Congratulations! That’s all
Your customers can now place orders online on your virtual restaurant website or mobile app.
Now, you are set for handling online orders, have responsive website and engaging mobile app. What’s next?
Boost your online presence with a comprehensive guide to restaurant marketing ideas.