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Your burger, tacos, or pizza could be cooked anywhere—which makes the ghost kitchen concept so lucrative and appealing to owners and investors, says Eater magazine's Terrence Doyle.🍔🍕🌮
With growing frequency, the food you order from a delivery app is being prepared in a ghost kitchen — or cloud kitchen, or commissary kitchen, or whatever you want to call it — by cooks working for a restaurant that doesn't really exist, at least not in the traditional sense. There is no storefront, no dining room, and no front-of-house staff. In some cases, the kitchen functions as a hub for a handful of other so-called virtual restaurants; in others, the virtual restaurant's food is prepared inside an established brick-and-mortar kitchen but with a separate name and menu. Either way, your burger or tacos, or pizza could be cooked anywhere by anyone — which is what makes the ghost kitchen concept so lucrative and appealing to owners and investors.
These kinds of digital-only restaurants existed before the pandemic broke out, but they experienced exponential growth as people across the country were confined to their homes for more than a year, unable to safely eat inside a restaurant dining room filled with strangers. Some of them are run by independent operators looking for an inexpensive and easy way to try something new (and for extra revenue to keep the lights on as the industry continues to struggle); many more are run by a number of large companies making big bets on delivery being the future of the restaurant industry.
Take the Local Culinary for example, a ghost kitchen company that operates more than 40 virtual restaurant brands with generic names like Chef Burger or Pizza Mania. The Local Culinary launches digital-only restaurants — many of which serve burgers, chicken, pizza, or tacos — and franchises them out to operators with physical kitchen space. Its founder, Alp Franko, says he doesn't have enough revenue data to predict too far into the future. Still, some research he's seen suggests the market might "double or triple" in the coming years. In contrast, other reports predict that ghost kitchens could transform into a $1 trillion industry over the next decade.
Another major player in the virtual dining industry is Planet Hollywood founder and CEO Robert Earl, whose Virtual Dining Concepts has launched a handful of celebrity-branded digital-only restaurants in the past year. Like Franko, Earl — who says his budding virtual restaurant empire helped sustain his hospitality business during the pandemic — is looking to capitalize on some perceived spare capacity (space, time, equipment, labor) in restaurant kitchens.
None of Virtual Dining Concepts' celebrity brands (not even Pauly D's Italian Subs) have exploded more than MrBeast Burger, an online-only fast-food restaurant founded in conjunction with a wildly popular YouTuber named MrBeast. The digital burger joint launched with more than 300 virtual restaurants in more than 35 states in December 2020. Now, there are nearly 1,000, and Earl says that number is set to double.
Virtual Dining Concepts isn't Earl's only venture with ghost kitchens. Having previously collaborated on a fast-casual chicken sandwich restaurant called Chicken Guy, the mogul and loved/loathed chef Guy Fieri recently teamed up to launch Flavortown Kitchen. Like some outposts of MrBeast Burger and Earl's other virtual restaurants, Flavortown Kitchen operates out of a number of chains he already owns, including Bertucci's, a wood-fired pizza chain that originated in Boston in the early 1980s and is best known for its halfway decent pizza and warm dinner rolls. Now it doubles as a mass producer of Fieri's "donkey sauce."
At the end of the day, the goal of these virtual restaurants (for the franchisor and the franchisee) is no different than any other business: to maximize profits and minimize overhead. Why operate one restaurant in your kitchen when you can operate four, five, or 12? The space is there, and the equipment is there, after all. But then again, the cooks suddenly have to memorize and execute all those extra menus. Does their pay increase? Will ghost kitchens add more staff to accommodate the increased volume? In conversations with C-suite and management types for this reporting, these questions went unanswered and danced around, but more than one source said individual ghost kitchen operators determine issues of pay.
Labor in ghost kitchens, like the concept itself, is often opaque. There are certainly instances when a brick-and-mortar opts into a ghost kitchen model, increases revenues, and is then better able to retain existing kitchen staff or hire additional kitchen staff, but there are also instances when the opposite is true. Ghost kitchens put another barrier — a smartphone screen, in this case — between diners and the people making their food, hiding from view a workforce that was already next to invisible.
Not all ghost kitchen businesses are inherently exploitative or obsessed with profit over labor — indeed, some may even be responsible for saving independent restaurants that might have otherwise gone out of business during the leaner moments of the pandemic without the extra revenue. Take Stillwater in downtown Boston, for example. During a typical dinner service, chef and owner Sarah Wade and her kitchen staff can be found whipping up plates of Ritz fried chicken or crispy Faroe Island salmon skin for the groups of hungry diners that have swarmed back to the restaurant since Massachusetts lifted its restrictions on indoor dining in May. But the Stillwater menu is no longer the lone focus in the restaurant's kitchen — Wade and crew are also busy preparing orders for the Mac Bar, a mac and cheese-focused takeout and delivery restaurant she launched in November 2020 as a way to make ends meet.
"It's a concept I've been rolling around in my head for a while," says Wade. "And this was an opportunity to trial it and see if it worked if we got a good bite on it and if maybe someday I wanted to do it as a brick-and-mortar. So there were a lot of reasons why I started it. But mainly, of course, it was to make money and pay rent and staff during COVID."
Ghost kitchens may or may not be the future of the restaurant industry, but they're definitely the present. And as the pandemic continues to surge, making diners more wary of eating indoors, they're probably not going away anytime soon.
Ghost kitchens aside, do you have a favorite restaurant here in town? I would love to hear about it and why you like it.😀 Thanks for reading!
Thanks for reading and have a wonderful weekend!
Matt Capell & Capell Team
Capell Flooring and Interiors
Office 208-288-0151 call or text us
P.S. Here is joke for you....
What do lousy chefs use to tell them when a roast is done?
A smoke detector.