Ghost Kitchen Brands — A New Business Model To Pay Attention To
Imagine this, it's family dinner time. You’re too tired after a long day of work to cook so you decide that tonight we will be eating out. Your S/O wants Cheesecake Factory, you want something Italian, and your children, for some odd reason, want Quiznos.
What do you do? Argue it out, give in to your S/O, or angrily order from Quiznos? Well, Ghost Kitchen Brands, a Canadian-based restaurant startup, would say that you don’t have to pick any of those options.
Ghost Kitchens are taking the Canadian market by storm with plans to have locations within 12km of every Canadian family and delivery times of 30 minutes or less.
Right now you are probably asking yourself, what exactly is a “ghost” kitchen?
Wikipedia defines a ghost kitchen as “a professional food preparation and cooking facility set up for the preparation of delivery/takeout-only meals”
To put it in layman’s terms, a ghost kitchen allows one to run a food business without the typical costs faced by traditional restaurants.
Think of a ghost kitchen as a sort of manufacturing hub of takeout & delivery food.
Ghost Kitchen Brands has taken this business model to the next level with plans to license major food franchises. They have already begun by striking deals with major names including Cinnabon, Quiznos, The Cheesecake Factory, Ben & Jerry’s, and so many more.
Online food ordering has more than doubled since the beginning of the COVID-19 pandemic which has propelled Ghost Kitchen Brands towards a faced paced expansion.
The brand has even partnered with Walmart to offer locations within Walmart stores. Most notably, many of these locations serve as a somewhat “virtual” food court with various different cuisine options, but minimal amounts of staff.
Marking the latest popular restaurateur to license their products to Ghost Kitchen Brands, Ghost Kitchen Brands recently signed a contract with Nathan’s Famous, a well-known American hot dog company, to offer their food in 100 Ghost Kitchen locations in the US & Canada.
Despite their rapid growth, Ghost Kitchen Brands was not the first company to employ ghost kitchens, and nor will it be the last.
An interesting case that took the internet by storm in 2020 is MrBeast Burger, a delivery-only restaurant with over 600 locations. (See more details about influencer MrBeast)
When MrBeast Burger launched in December, my fascination was minimal. I knew that many influencers had tried and failed to increase their brand recognition with schemes like a “restaurant” and was not at all interested until I learned that the “Beast Burger” was available for delivery to me and 100s of millions of Americans in 40 states + D.C.
Almost overnight, a brand's products were available to more than half of the United States population. Could you ever imagine something like that being possible 20 or even 10 years ago?
How did it do this? ghost kitchens
Although Ghost Kitchens present many benefits, the cons cannot be overlooked.
A major headache mentioned by business owners and consumers is the heavy costs associated with purchasing food through delivery apps. These costs sometimes inflate the prices of meals by up to 40% swaying many consumers towards more cost-effective options.
Another con includes the restaurant's lack of control over the quality of its food after it leaves the kitchen. For many restaurants that have an excellent customer experience in their value proposition, partnering with Ghost Kitchen Brands may be risky as the principal restaurant owner will have minimal control over their customer's experience.
Despite this, the market for ghost kitchens is likely to grow tremendously over the next 5 years, and with plans for a major expansion into the United States, Ghost Kitchen Brands is on track to become a major player in the bloated restaurant industry.
This one is definitely worth keeping an eye on.
