Ghost restaurants have no seats, no servers and no storefronts. Instead they're just kitchens preparing takeout for delivery apps like UberEats, Foodora and Grubhub. You can think of them as virtual restaurants— their storefront is the delivery app.
Real estate can be expensive for restaurants— but not necessarily for ghost restaurants. Since they don't have a storefront, they can be located in cheap neighbourhoods. And since they don't have seating or waiting areas, they need less total square footage.
Ghost restaurants can also operate several brands from one location. For example, Green Summit is a ghost restaurant in New York that operates two brands out of one kitchen: Butcher Block (sandwiches) and Maya Blue (Mexican).
The flexibility of ghost restaurants allows for new concepts to be tested quickly. For example: Green Summit used their kitchen to launch a Middle Eastern brand— but they shut it down after lower-than-expected sales.
Ghost restaurants reveal an important lesson: if you change how customers access a business, there are entrepreneurial opportunities for a new types of business.
Traditional restaurants of course aren't the only way to distribute prepared meals. In India, Dabbawallahs deliver 130,000 hot lunch meals to Mumbai office workers every day. The lunches are made in homes by self-employed caterers.
Multiple restaurants serving food from one kitchen is also nothing new— though it hasn't always been embraced by delivery services. In 2014, Grubhub removed multiple Chinese restaurants after it was discovered that they delivered food from the same kitchen.
So are ghost restaurants the future or a flash in the pan? Only time will tell. Earlier this year Ando, a ghost restaurant in New York City, was closed. It had been one of the most high-profile ghost restaurants yet— attracting celebrity investors like Jimmy Fallon and Aziz Ansari.
But at least for the meantime, ghost restaurants make for an interesting experiment.
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