Ghost Kitchens

In recent years, a new phenomenon called Ghost Kitchens has emerged in the food service industry and has been further accelerated by the COVID-19 pandemic and the growth of app-based delivery services. Ghost Kitchens, also known as delivery-only restaurants, virtual kitchens, shadow kitchens, commissary kitchens, or dark kitchens, are restaurants that only exist online and prepare delivery-only meals. They do not have traditional dining rooms or storefronts and only have a kitchen for preparing take-out orders.

Both start-ups and existing restaurant brands have embraced the concept. Some are using it to start a new business with lower costs, while others are using it to expand their delivery capabilities or to test menu items through sub-brands. There are numerous possibilities depending on demand.

In small towns, there is often a lack of food diversity due to the dominance of fast-food chains and chain restaurants that can afford to build new locations with long-term leases. This leaves local establishments to compete for a limited number of old restaurant locations with existing infrastructure or less desirable real estate with low visibility. Additionally, the cost of building or retrofitting a space for food service can be prohibitive. As a result, many start-ups turn to food trucks, but these can also have location and permitting issues and are often limited in terms of menu options due to equipment and storage constraints.

Ghost Kitchens may offer a solution for small towns looking to increase their culinary options and diversity. The creation of "For Lease" commercial kitchen space could significantly reduce the risk of starting a restaurant by providing a new business with the opportunity to build brand awareness and develop their concept at a more affordable price point. It could also provide an easy way for outside restaurants to test the market or establish a local delivery presence in the area. It may even allow a food truck operator to expand into delivery or expand their menu offerings with minimal additional capital expenditure.

For cities, this type of development could be a suitable tenant use for property that may not be attractive to traditional hospitality or retail operators. It also uses minimal parking resources and centralizes operations for utilities, sanitation services, and deliveries. This expands opportunities for local real estate investors, business owners, and developers to diversify their portfolios. It also provides jobs for local food talent to gain experience in a range of food types and preparation techniques.

Ghost Kitchens can also be used in more creative ways, such as hosting culinary tours with celebrity chefs who offer one-week menus in a town before moving on to the next location, or collaborating with local food preparation teams to create branded menus. They can also be used as seasonal restaurants specializing in a particular type of food or holiday, like a 90-day Cajun restaurant during crawfish season, or a six-week dessert restaurant serving pies and cakes during the holiday season. They can even be used to provide excess kitchen space for civic or business events.

If the infrastructure and business model are made available, there are many opportunities for Ghost Kitchens. It may just take an ambitious property owner or creative developer to get the ball rolling.

Below are a few articles, talking about this concept and how they are being used around the country.

Wikipedia Eater Medium US Foods RBO

-Shane