Are Ghost Kitchens Profitable?

are ghost kitchens profitable

A ghost kitchen is a unique way for restaurants to earn money. If you’re new to the idea or have been considering trying one out, our guide pinpoints how they operate, the benefits of using one, and whether they can be a profitable venture.

How Do Ghost Kitchens Work?

Ghost kitchens differ from traditional restaurants in that there is no dining room. Instead, patrons can order food through delivery apps like UberEats, or, in some cases, pick the food up if takeout is an option.

On the business end, you rent out a commercial kitchen. You use this space to prepare food then the delivery partner picks it up. And if you’re searching to reduce costs more, you can split the area with other dining establishments.

What are Some of the Benefits?

Here are some of the perks of running a ghost kitchen:

  • Ghost kitchens allow you to focus solely on making food, trying new recipes, and expanding your brand into different restaurant segments. 
  • You cut costs on staffing needs. Unlike a sit-down restaurant where you need to hire hosts, servers, and people to bus tables, a ghost kitchen works with only cooks. 
  • You also save on operating expenses. Since you do not have a dining room, you don’t have to worry about expensive fees associated with decor, furniture, and higher utility costs.
  • Since you do not have to worry about serving in-person patrons or answering phones, you can complete orders quicker, leading to better outcomes for your customers. 

What are the Drawbacks of a Ghost Kitchen?

When considering any enterprise, it is vital to consider drawbacks as well. For ghost kitchens, this includes:

  • You’re relying on a delivery service to handle orders. If the delivery person drops the ball, it could reflect poorly on your business. 
  • You limit how many customers you serve at a given time. With traditional restaurants, you could have dine-in, carryout, and delivery orders. With ghost kitchens, you have delivery only. While it allows you to complete orders quicker, it also reduces how many people you serve at a given time.
  • You have to separate from the rest of the pack. It includes spending money on advertising, having a prominent place on delivery apps, and increasing your brand presence. 

Can Ghost Kitchens be Profitable?

Yes, they can be. And if you need marketing guidance along the way, the experts at the On Demand Company can help. We’re adept at helping brands like yours increase their presence on delivery apps. Whether it’s a simple brand refresh or targeting multiple segments, we know what it takes to grow your business. Restaurants working with us witnessed sales increases of up to 200% per week. See how we can make your ghost kitchen profitable by contacting us today.