Ghost kitchens are dying
davidrmann3.substack.com
davidrmann3.substack.com
they feel like scams and when I've accidentally ordered from a ghost kitchen it was by design a terrible experience.
I'm talking like, you order a 15$ main that is called "creamy pasta with prosicutto" and when it shows up its buttered spaghetti with a couple stamp-sized bits of ham. Ordering from actual restaurants come with some of the downsides the article assigns to ghost kitchens, like cold food and weird presentation, but ghost kitchens never seemed to reach the bar of "food someone would actually order, even if it was teleported to them instantly".
What actually got sold was an uber-esque scam: these kitchens were rented to tiny operators who, instead of opening their own restaurants, opened in a ghost kitchen facility. I read an in-depth article that showcased the extremely high failure rate of the operators. They were sold indiscriminately to anyone who could be suckered into doing it, with no thought of whether the "restaurant" was likely to succeed. The parallels to driving for Uber are obvious.
I actually suspect that ghost kitchens would work fine, but it would be one company operating them and carefully selecting products that sell and controlling for quality.
And for the providers of the ghost kitchens, while they are selling a shovel of sorts, their bet was there would be a continuing market for their shovels. That space isn't likely to be used for any other restaurants because of the lack of foot traffic, but it also isn't likely to be used in large-scale food production because the facilities usually aren't large enough to be re-tooled for anything beyond catering companies. Commercial kitchen build-outs are not cheap, so investing in large scale small kitchen spaces is a risky bet.
Now, I'm a top decile professional and would basically have to bet my whole net worth, including my retirement money, if I wanted to open a real restaurant. No wonder chain restaurants rule the day and the only thing interesting happening in food in most of the country are in food trucks. Ghost kitchens, at least a few years ago, seemed like a logical next step after the food truck: an even less capital-intensive way to get into the food service business.
The same forces will push someone who has this ambition to go the ghost kitchen route. Hopefully failing this way instead of with a fully staffed restaurant has saved at least one family from total ruin (downgraded instead to partial ruin).
Should be no surprise. CloudKitchens, even, was founded by none other than Travis Kalanick.
Food trucks seem to be pretty popular and work well.
Perhaps the difference is that food trucks are all about establishing a reputation for good cheap food that you can verify where as ghost kitchens wind up being the opposite.
Certainly not always, but I'd wager far more commonly than a generic ghost kitchen out of a shared kitchen with an Applebee's or out of the back of a cheap warehouse district.
I will also eat the food close to the truck, meaning it's very little effort for me to go back and say "oi, this is shit, mate".
In a ghost kitchen you have zero way to actually give feedback to the kitchen itself.
>>"food someone would actually order, even if it was teleported to them instantly".
The article states >>Quality control became impossible. Shared kitchen facilities meant that one staff member prepared food for multiple brands simultaneously. No ownership. No accountability. Just assembly-line cooking with zero connection to customers.
I'm not sure if it was impossible or if management never actually prioritized it, not bothering to understand what an actual customer would want. How much of it is the stupid management assumption that they can "just make a dish generally meeting description X on the menu" and deliver that and it'll be ok? «— Real question, did mgt fail at the product specification level, or was QC just as a practical matter, impossible?
On the economics, it really seems 30% for delivery is insane. It seems that same 30% might exceed the cost of the physical restaurant. And when it adds a 15-45min delay while homogenizing and cooling the meal, it seems an impossible problem. Maybe if the 30% transported it instantly and losslessly...
Probably good this soulless idea will die. Too bad so much perfectly good capital was squandered on it instead of better ideas
I think tech founders often underestimate what it takes to build a food business and what the margins are like and then start to cut corners to make the business viable.
I think longtime NYC restaurant owners often love being a community hub, particularly if they’re first generation Americans, so they’re not thinking of how to squeeze the customers or follow the latest fads.
A lot of stereotypical “ethnically owned” businesses in NYC also have their own supply chains. It’s very possible they are or were buying from Greek-American wholesalers who are effectively buying in bulk for diners across the city.
My impression in general is also that people who’ve worked in the NYC food business for a while in general know their preferred vendors to call for any particular thing, from whole chickens to pest control, and that if you tried to compete with them by finding vendors on Yelp or whatever without those relationships you would be at a complete disadvantage.
Is that just tech founders, or American business culture, generally? Seems like everything's getting corners cut to the maximum extent possible.
And this is how it works in many (not all) American airports. Local restaurants put their brands on the signs, but the food is prepared by probationary employees of Acme Baggage Displacement And Cafeteria Management Corp.
But the airport newsstands that are just someone selling candy in a room with the name of a random local newspaper are an interesting local sight.
And? It’s not enough that someone makes crap food. The matter is when there is no market force to penalize crap food.
I thought platform feedback was a solved issue. Online sellers are (across the board in general) very focused on avoiding negative feedback.
There was an interesting local example of a place that started out trying to be more or less a ghost kitchen but wound up being forced by success to become a real eatery. It had the endearingly utilitarian name "Pizza Online Company". They had no phone nor any in-house delivery system. You could order online or in-person to pick up, or via GrubHub/Doordash/etc., and that was it. Initially they had no eating area, just a tiny space big enough for three or four people to stand and wait for their orders.
But the pizza wasn't bad and it was (at least at first) remarkably cheap. It undercut Domino's prices by at least 25% while being much better quality. The place became popular. And sure enough when a place becomes popular people start wanting to go there. They added a small counter with stools to the waiting area. They didn't have space for more than that inside, but when it wasn't enough they took over some of the strip-mall walkway outside the front door and made it into a patio with seating for 8-10 people.
Unfortunately it closed abruptly a couple years ago, apparently due to some kind of family emergency.
However, I always thought the DYBOOPs and BIPLOZAs of this world existed on Amazon because of a glut of Chinese manufacturing expertise outpacing any ability to do proper branding and marketing. My QSMYYUYE grill stove, CYEER steel plates, and SUNYAY telescopic bug sprayer are all well made and reasonably priced commodity objects.
IIRC, if you have a "brand name" it unlocks some desirable features in the Amazon Seller experience.
The DYBOOPs and BIPLOZAs are almost always just heavily marked-up items you can buy on AliExpress much cheaper if you're willing to wait a week or two.
to be clear, much of this is an Amazon rule, and branding is meaningless if you sponsor items to be searched; most people DGAF about things like plastic containers or cellphone cases and are happy to buy whatever
However, when you think about it, a big chunk of the catering industry operates as a ghost kitchen. It's well known that caterers go bankrupt at lower rates than restaurants. We had a local success story called 1800 LASAGNA where a man cooked and delivered exactly one item to customers and met with a lot of success. He then opened a restaurant, which is now in voluntary administration because it was losing so much money. Catering works.
I can't help but feel this is one of those "tech industry reinvents the bus" stories, where ghost kitchens lost because catering (and low-seating restaurants like pizza joints) already existed and had a massive head start. It's not that the core idea was bad: the core idea was great, it was just already out there.
Real innovation will come when it becomes genuinely feasible for the caterer to run their own server, with some FOSS ordering system, such that there is no middle-man anymore who can jack up prices, only utility companies.
I don't mean this cynically; but basically what you are suggesting is that some group of volunteers spend their time and effort to build out a substantial part of the business's infrastructure for free.
So basically, as long as they can get the critical business software part for free, the business becomes feasible.
The short answer is "this probably won't happen". FOSS isn't some magic wand that makes software appear.
And if there was someone determined to make this their pet project, they would need to work closely with a kitchen to understand their requirements. It would likely work well for that kitchen (until the free labor went off and got a real job) but would need a lot more work to become "generic" to the point where a second kitchen could use it. And more work for a third.
Building business systems, and keeping them maintained as the world changes, is a huge amount of work. (I've been building them for 35 years.) It's really not feasible to do it in "spare time".
Yes, that's a different question from whether the opex is sustainable without a business selling support. And I think the question there is how much can be offloaded to utility-style SaaS like Stripe (i.e. handle changes in taxes) and serverless infrastructure to keep the opex of the FOSS solution itself low. I get the impression that it's hypothetically doable, but the proverbial kids of mom-and-pop store parents don't have the experience or guidance to know how to set that up.
wait until this guy finds out what Linux is.
I don't buy this. How many businesses are we talking about? Ten thousand? Twenty thousand? So each business commits $200 to $400 and you have a multi-million dollar OSS enterprise solution. For a few million, a small team could easily build a much better ordering system than the utter garbage that's out there now, including setting menus and prices, handling payment, route planning, etc. Ordering online is often completely broken. A bit of collective action solves lots of problems. Yes, each business still has to cover some infra costs, unless that's also collectivized.
Or -- and I know this is absolute blasphemy to say -- the government could create this software. We could call it, I don't know, say, the "U.S. Digital Service" and it could use a tiny amount of tax money to make software that benefits entire industries or huge swaths of people and give it out for free. We could be greasing the wheels of commerce across the entire United States with just a little investment in "greater good" software, but the fucking billionaire psychopath asshole caste wouldn't be able to get their rent from it, so we have to burn it to the fucking ground.
This doesn't have to be an actual problem. We could easily solve it, but we have to have the balls to tell billionaires they're no longer allowed to loot the entire country. Everyone -- yes, you too, reader -- everyone vastly under-estimates how good society could be if it weren't for those fucking little parasites that have to loot and extract rent from everything.
You're describing commercial software, not FOSS. and yes if you have 10000 customers paying $200 a year, you have a very successful business.
Of course it may take you a few minutes to convince 10000 businesses to pony up the cash, but that's the easy part right?
No, I'm describing a funding mechanism. It may be easier with commercial software, but that's because humanity is largely allergic to collective action, not because of its licensing model. Some FOSS software gets plenty of funding from many different companies that use it, e.g. Blender.
If an article makes it to the front page despite being AI-generated it probably has some interesting points or ideas, but it's unfortunate that people seeem to choose the speed and style of LLM writing over the individual style and choice that made the writing of yesteryear more interesting and unique.
Now I wonder whether any of it is even true.
But clearly there's a reason it was upvoted if it's on the front page. Why ignore that fact... clearly the community thinks these articles have value if they're upvoted.
(Also, "it's AI, bad article" is just a weak complaint that can't be proven right or wrong - if you dislike it, share why you dislike it, e.g. lacking specific information, shallow depth, something other than "don't like it because AI")
You don't speak for us. If you are going to demand supporting evidence for obvious statements, then you can present supporting evidence for your spurious claims about value.
> No ownership. No accountability. Just assembly-line cooking with zero connection to customers.
> No loyal regulars. No servers to smooth over problems. Just angry reviews that destroyed virtual brands forever.
Pretty common pattern these days.
That, plus the hashtags at the end (unless Substack uses those and I was unaware of it), plus the fact that we know he's using AI in some capacity because of the feature images - it's a reasonable conclusion to draw.
Oddly, "cafeteria" cooking has sometimes been the best food I've eaten at the time. It very much depends on the circumstances and budget and your expectations. I've eaten like this in Leeds, London, Rome, France, Beijing. And not always in universities, the experience extends to factories, railways and even just the streetscape.
The FSU had a preference for ground meat and sausages at a state level because it was easier to ensure as much as possible of the meat inputs became food outputs. [This is wrong: they didn't] The Khrushchev flats had communal kitchens. They were universally hated I believe.
Ghost kitchens failed on lack of regulation and motivation to be the best they could be. There was never an intention to be "Jamie Oliver's ghost kitchen"
Re-intermediating consumers away from direct food carries on. Uber eats and Panda are delivering food from restaurants all around me, and one of them is a chinese take-away eponymously called "A Chinese Take Away" -I think it's a hack on the search engine carried forward. I've eaten their floating market soup in the shop, it's fine. Most of their trade is carry-out.
Khrushchyovkas did not have communal kitchens; I grew up in one [0]. Perhaps you are thinking about kommunalkas [1]?
Sometimes the lack of choice and lack of responsibility are relieving. It may not be the best meal, but you didn't really have much choice and you didn't have to get ingredients and make it yourself. That can go a long way.
Food that travels well requires different recipes, different ingredients, different packaging.
This doesn't ring true, given the popularity of DoorDash and the fact that most of those restaurant menus are in no way optimized for delivery.
Having lower-quality multitasking staff serving multiple restaurants from the same prep and equipment seems like an obvious way to lose quality. But simply streamlining the process of getting a menu onto delivery? That seems like a solved problem.
People have really funny ideas about restaurants. Somebody once left an online review of my family's establishment complaining that the hot chicken that was supposed to be on their cold to-go salad was in a separate container. They asserted that it was a "trick" to keep the chicken warm and moist, as though it would have been better to let the hot poultry heat their salad in the same container until it was lukewarm meat on top of wilted greens. Every day I wake up and mourn the IQ point that I lost reading it.
"Wilted soggy salad lovers hate this one simple trick!"
So some places are optimizing their fries for delivery.
I've also noticed some restaurants are better at adapting the packaging, like punching out ventilation so fried products don't steam themselves in transit. Lawrence Seafood (which rules) did that for a side of tempura we got this weekend.
But I agree in large part. I wouldn't order fried chicken delivered via door dash in any event. People doing that are optimizing for something other than quality.
This was an example of a well functioning ghost kitchen. I don’t know how profitable they were, but it was very convenient. There are a lot of downsides to this approach, like pre ordering, reheating, and limited menu, but it was a very different approach to current ghost kitchens around me now or DoorDash from a local restaurant.
I can't remember when I last used a service like that. The convenience isn't worth the disappointment and aggravation.
Are you sure they're not?
People are dumb.... but only for so long. I've been burnt so many times by delivery I've gone back to mostly ordering pizza and picking it up in person.
I don't understand why there is no good cheap option. In Japan, I could go to a low-tier shop. It would cost $1-3; the food is decent with taste, and it fills my stomach. In US, $1-3 would be the min amount of tips.
Living in dense cities it can be easy to forget how many dependencies you rely on, it's a complex chain of logistics.
But I sure do miss the convenience and cost of Japan. Cities in Japan feel like they are made for people to live mostly outside of their house. Whereas it is so expensive to do normal city stuff in many western cities, it costs too much to participate every day.
Where I live in Australia the cheapest food tends to be Kebabs which congregate around pubs. There is a high amount of students walking (stumbling) home after a night out etc so they can afford to be cheap since they get so much foot traffic coming through.
… I, and everyone I know, can cook? Do cook. There's no way to eat out every night…?
There seems to be something special about pizza that sets it apart from everything else, that made it seem reasonable to order it delivered from a non-restaurant even back then.
Before that, of course, the fish and chip shop is an ancient institution, though they rarely delivered.
When I worked there they sold pizza and Coke. That was it. No breadsticks, no wings, no salads. One kind of crust, two size options. And by Coke I mean Coca Cola Classic in 16oz glass bottles. No Diet Coke, no sprite, nothing else. It was pure efficiency by elimination.
The drivers were all employees then, too. Not gig workers. No idea if that’s still the case.
Giving in to the nostalgia for a moment: there also wasn't a computer in the place. Everything was done on paper order slips and paper bookkeeping. No online ordering, so everyone paid with cash or check. No cell phones, so you couldn't call out to tell a driver he had the wrong address or the wrong pizza; you just had to wait for him to get back. And we still had the 30-minute guarantee, so we raced around like a bunch of maniacs even though the company kept telling us not to. Good times.
And no GPS navigation of course. There was a big map of the delivery area on the wall in the back room. If you didn't recognize the address you'd look at that before you left the store and just had to remember the details.
The stores usually had one or two company cars, a hatchback like a Ford Escort, painted up with the Domino’s logo. It was not equipped with any special pizza warmer. But most drivers used their own car. They got an hourly wage, a percentage of the order total if they used their own car, and tips.
Copy the address into your maps app and look it up on street view.
I live a short bike ride from a CloudKitchen location and pick up from it often. Hard to beat birria and bao buns in the same stop even if they're nothing to write home about.
Yes, that also blew my trust in the whole thing.
The variety is great because my partner and I can get wildly different things and I need only make one stop. Ours is stocked with the standard set of generic "restaurants" plus serves as a "location" for several real local restaurant chains and even a food truck. The generic stuff is passable but uses cheap ingredients, the partnered restaurants seem to have fine quality control and use the same stuff they use elsewhere, so I find them to be quite good. Picking up myself I don't experience the cold food issue others complain about.
It does such brisk business every time I'm there I have a hard time believing this specific one is dying. I hope it's not.
One of my favorite dumpling shops in Brooklyn just had 2 tables... everyone just carried it out and back to home / work. And I think it worked well for them.
I have never placed an order from a restaurant that I don't actually know beforehand. Maybe I haven't been there in person, but I know the name of the restaurant and I remember where is it and maybe someone I know ate there.
The only time I go completely blind is if I'm traveling. But that's like 1-2% of my total orders. And, in that case I usually stick to known chains or maybe I ask what's a good restaurant around here, then find it in the app.
I suspect it's not so uncommon to order from restaurants one already knows, rather than taking risks?
If that's the case, then ghost kitchens are going to have a very hard time getting their slice of the market
A big part of the problem is that just because it has the name of a real and known restaurant doesn't mean that the food you order through delivery apps was made there.
The author touches on margins being eaten up by the delivery hegemony which feels like a much more important point. The handful of online ordering marketplaces are the app/play stores of this part of the economy and I can believe that they are far too greedy and powerful. Yet would the economy tolerate a much more diverse marketplace for connecting cooks, drivers, and customers? One of the only things holding the whole system together is shitty drivers and crappy kitchens being weeded out by the major marketplaces. If drivers could just hop between apps there would be no way to filter out the rogues?
They also bring up quality issues with packaging and delivery. To that extent, food delivery feels like healthcare where one cannot reasonably be expected to shop around for a surgeon to see your legs back on. When you order a meal you can’t just hope for the best knowing that if the food arrives cold and demolished then you’ll be able to get a refund and try somewhere else! Regulation here would help: your municipal certificate could not only rate food hygiene but also your ability to hit a reasonable p99 turnaround from order to order-up!.
I envision some kind of government-run or mandated exchange where drivers can certify/onboard at any number of uber/lyft clones, and customers can sign up for any number of uber/lyft clones. Any request placed will be sent to the exchange and the cheapest price from a service that the passenger is willing to use is selected.
This would primarily squeeze the margin of uber/lyft. That margin is what competitors can offer up to drivers for higher wages and passengers for lower prices. It's pretty wild to me that Uber/Lyft still manage to capture 25-60% of the "value" of each ride, when the overwhelmingly largest value they provide is derived from network-effect lock-in (essentially rent-seeking).
Maybe drivers could set their minimum wages per mile/estimated time, and passengers could avoid companies with business practices they don't like (inadequate background checks, paying wages too low, sponsors the wrong sports team).
This exchange would have to be enforced with anti-trust or just statute/regulation.
I can't imagine it's even close to 50%.
I don't know the patterns of regular folks, but for me the prices in general have crept up enough that's it rare I want to try some new place - unless I get multiple strong personal recommendations for it. You can forget about paying extra for delivery to home!
If I were to do a startup, it would be a food company that leverages drive thru. Optimize everything to maximize throughput on the drive thru by only accepting orders ahead of time (maybe even days ahead of time so that the establishment knows exactly how much food to order and prepare). The food is ready and can be dropped right into the person’s car as soon as they pull up.
People are fine with driving around, especially if it’s on the way home from work or close to where they live. What they don’t like is going to the grocery story, cooking the same three basic meals they know how to cook, cleaning, and eating the same leftovers for five nights in a row.
I can’t believe VCs and startup founders failed to realize the driving part was not the thing people were willing to pay a premium for at scale. They want cheap, tasty, diverse, that’s more convenient than cooking, but doesn’t need to be dropped off at their doorstep.
It makes more sense if you see it as emerging from a meta-strategy of: Create a national middleman platform; become monopolistic by operating at a loss; trap both sides while raising fees to extract rents.
The other options you're talking about aren't mustache-twirlingly exploitative enough to appeal to those investors.
It would be too easy for Local Hungry Dude and Local Eatery to have a friendly chat when picking up the food, and then cut-out the (unnecessary, unproductive) middleman for future meals.
I personally am not fine being force-fed excess salt, sugar, low-quality oils, and other ingredients over which I have no control, ultimately leading to my risk of death increasing by 50%.
It's funny because it's not like (normal) restaurants don't exist where they have crazy-big menus with a wide range of choices and cuisines. Certainly some of them are kinda mediocre, but many are actually pretty great, and you can get a solid dish regardless of what you pick. Some pride themselves on their ability to make basically anything, and make it well.
A ghost kitchen where the same staff works for several different "restaurants" simultaneously can work just fine, assuming actual training, and an effort to create quality recipes and use quality ingredients.
But I can easily see how a lack of a sense of ownership among the assembly-line-style staff could make this dicey. If you're making random dishes for a random set of "brands" (a brand among many that was plucked out of a hat, complete with AI-generated food images and descriptions), you're probably not going to take much pride in the quality of your work. And I do think the author has a point about connection; certainly a connection to customers is no guarantee of quality, but I think it's a much harder sell to inspire that quality without it.
They seemed to think they cut out a lot of costs, they were mistaken ... and then they partner with delivery companies who jack up the costs.
>Ghost kitchens promised lower costs. The math never worked. Delivery apps charge restaurants up to 30% commission fees5. Ghost kitchen operators add rent plus percentage fees on top. Equipment repairs and maintenance create constant expenses. Marketing costs multiply when you have no storefront presence.
Meanwhile there's no loyalty from customers because what is there to be loyal to? Nobody in the chain here cares about quality ... I get the wrong order or bad food, there's nobody to fix it, and I probably never do it again.
It would be interesting to know what these companies had for a business plan / where they thought the numbers were going to pan out.
The problem seems to be the product,so it's essentially a scam. If the product was good,I don't see a problem with a place that's just a kitchen.
The restaurants in north america seems to be all in parking lots anyway,might as well be home instead
2. Did they adopt checklists and double-checking supervision to ensure food-safety, uniformity, and correctness?
3. Did they use quality ingredients rather than the cheapest shit Sysco sold that day?
4. Did they right-hire enough competent, sufficiently-paid staff so that churn wasn't 100% per 4 months?
5. Did anyone there ever run a successful restaurant storefront to multiple-location chain before? (Restaurants of any sort are the hardest, most grueling, tending to be risky businesses around. My grandfather became a mechanic rather than take over his father's French restaurant after going through the trouble of training to become a chef.)
I'm going to make a giant leap and assume most of these were "no" and they failed horribly on execution by focusing on the wrong things.
> Layering these costs together, restaurants discovered a devastating truth: there wasn't enough money left for anyone to make a profit.
So is that true of working with delivery apps, generally? All of those points are also are true of regular restaurants with a storefront, except the last one about marketing expenses. Are the delivery apps just surviving parasitically on restaurants that would be better off without them?
Yes. At least according to the restaurants themselves.
I don't think you need an actual sit-down location to succeed, but you do need full control over what you produce and to spend time building trust and loyalty.
The article says this but never actually says how many have closed or failed. The only evidence it provides is that some operators have shut down. But that could be industry shakeout. So, are ghost kitchens actually doing?
But they have the additional benefit of a physical location so you can get profitable orders that you don't pay the UberEats tax on as well as build brand recognition.
That's a straight quality control problem. It ought to be solveable.
But that's hard to do.
The trouble is, the whole food app industry is based on someone else dealing with the hard problems. The drivers aren't employees, and the restaurants aren't employees. If an app company gets into ghost kitchens, they are now in a business where they are clueless. Some try to avoid being responsible for the food by just being landlords for people who buy a station in the kitchen
Bulk food prep is a solved problem. Every major hotel has it solved. There will be some senior people who went to a serious culinary academy. They look at food prep as a manufacturing problem, with batch quantity optimization, holding time limits, error tolerances on temperatures and quantities, and quality control points. It's factory planning.
The first "Doordash Kitchen", in Silicon Valley, is near me. It's still operating, but I don't see many drivers there.
> When food travels twenty minutes in a bag, quality suffers.
You'd think that would be a solved problem in packaging and prep by now. Insulated containers are not rocket science.
You often want the opposite of insulation. Food continues to cook in the container, things get soggy, etc. Each dish and even ingredient can have different ideal packaging requirements. It's not something that really scales well. It's part of why menus like McDonalds' remained stable and relatively small over a period of decades. Notice how their fries are served in a specialty designed container that's open, which avoids them becoming soggy.
Does anybody in the "ghost kitchen" industry?
- They aren’t dying. Most of them are just not run well, and there isn’t a widely-known “playbook” to use to spin one up.
- Demand is high. Supply of what people want does not meet this demand.
- Lots of people use ghost kitchens to chase fads or to try to get rich quick. These rarely work long term.
- Profitable ghost kitchens are well-run kitchens (or restaurants without a front of house).
- His abbreviated playbook for ghost kitchens that work: prep everything (nothing cooked to order), finishing and assembly should be the only thing done when the order comes in, every order should be done within 5 minutes (this blew my mind) so that it will get to the customer within 20 minutes, make sure your images look exactly like the food you will deliver, get packaging that makes it so that food can be delivered and still look good, advertise (promote) in the apps when you open, and cut back as organic sales and reorders start rolling in, master one location first and then scale out with a provable system, add additional compatible brands (e.g., cakes expanding to cupcakes or cookies) later in the life cycle with a similar development process (but in the same kitchen).
- There is a truckload of restaurant kitchen workers who love good ghost kitchen work — high pace, limited menu (relatively speaking), no front of house staff to deal with, etc.
- When a ghost kitchen hits product-market fit, labor and food costs can be sub-20% of revenue each (this is insane, imho). Marketing starts at 25% of revenue and rapidly drops to sub-5%. Note that this is based on what they receive from the delivery companies, so percentage of sales is higher.
- My friend can spin up a new location in 20 days and $10k from getting the go ahead to delivering food. That includes setting up the kitchen, hiring, training, and initial inventory.
The article says this but never actually says how many have closed or failed. The only evidence it provides is that some operators have shut down. But that could be industry shakeout.
What does that even mean? Sell an NFT image of a burger?
The kinda thing a regular restaurant is probably managing using a spreadsheet and a notebook.
Delivery certainly isn't unpopular.
In which countries are ghost kitchens thriving? How do they avoid the failure modes described in this article? Is it possible they are simply behind the curve?
Much of Asia.
> How do they avoid the failure modes described in this article?
My suggestion was that this is exactly what a meaningful article on this topic would mention, as clearly the failure modes aren't universal. I'm not the one writing articles about it.
> Is it possible they are simply behind the curve?
Au contraire, ghost kitchens were already more of a thing here before COVID.
Since "Here's the $15B Lesson Every Restaurateur Must Learn" is obvious linkbait—I would even say shameless linkbait—this seems like a perfectly standard title edit to me.
From https://news.ycombinator.com/newsguidelines.html: "Please use the original title, unless it is misleading or linkbait"