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Is a 'ghost' restaurant right for your business?

Virtual restaurants offer the advantages of allowing flexiblee menus, a modest financial investment compared to other foodservice options, and more opportunities for menu experimentation.

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July 29, 2019 by Christine Potts — Senior Editor, WebstaurantStore

If you're tuned into foodservice trends, you may have heard of "ghost" restaurants, also known as virtual restaurants or delivery-only restaurants. These new types of foodservice establishments are increasing in popularity as more and more foodservice entrepreneurs decide to focus on the rapidly growing food delivery business.

A ghost restaurant is a foodservice establishment that offers take-out only. These eateries don't have a storefront, so customers can't come to pick up their own food. Ghost restaurants deliver food directly to their patrons, often through the use of third-party delivery services.

Generally, virtual restaurants function just like traditional restaurants, in that customers' food is prepared once they order it. As a result, many establishments offer a lot of customization options for their menu items.

Where do ghost restaurants work best?

This type of foodservice model is especially great for high-rent areas. Instead of hoping to find a prime location to draw foot traffic, foodservice operators can establish their virtual restaurant in any neighborhood they see fit, so long as their delivery service can easily access customers.

Many popular fast-casual establishments in cities are bound by the requirement for seating and waiting space, even though a large percentage of their customers aren't dining in. So, offering only delivery helps virtual restaurants avoid the problem of underutilized space.

Advantages of ghost restaurants

Here are some things that ghost restaurants can do that traditional eateries can't:

Flexibility of concept: Being app- or web-based means that you can change your menu whenever you like, without having to worry about updating signage or printed materials.
Adjustable menu: If an ingredient becomes too expensive or is no longer accessible in your area, you can easily swap out your menu items to suit what is available to you.
Smaller financial investment: Think about all the expensive elements that don't apply to virtual restaurants: decor, signage, dinnerware, and additional staff members to serve as servers or hosts.
Opportunity for experimentation: Ghost restaurants are the perfect opportunity to experiment with new concepts, because you can easily scrap ideas that aren't working.

What is a ghost restaurant kitchen like?

In virtual restaurants, the kitchen is where a lot of your investment goes. Because you don't have to allow square footage for a dining area, you have much more room to customize your kitchen space. Depending on your budget, you can opt for some specialized cooking equipment.

You can even own multiple ghost restaurants and operate them out of the same kitchen. Especially if your menus have ingredient overlap, you can prepare food for two separate concepts in one efficient space.

If owning or leasing a customizable space isn't in your budget, you can work in a commissary kitchen, a complete kitchen space that is available for rent. Although some commissaries are shared, it is usually best for ghost restaurateurs to rent private commissaries. While food truck operators and caterers typically need the kitchen space for prep time, a virtual restaurant will need it for the same hours as a traditional restaurant kitchen. As a result, working out a schedule with other users could be challenging.

How do you get customers?

Since a ghost restaurant can't rely on foot traffic for patrons, it is important that these businesses have strong marketing. This being said, flexibility and nearly-instant gratification are two things that make ghost restaurants the perfect foodservice business to cater to young customers. Especially if you choose to target teens and young adults as your customer base, it is best that your virtual restaurant has a strong online presence.

Many ghost restaurateurs opt to partner with take-out apps to attract customers. If you become a featured restaurant on one of these apps, you can gain exposure to customers who have the immediate intention of ordering. As a bonus, these apps arrange to pick up your customers' food when it is ready, and they also deliver it to them. With these apps, all you need to worry about is preparing orders for delivery.

If no food ordering apps are available in your area, or if you'd prefer to handle these processes in-house, make sure that your business has a quality website that is equipped with a functional online order form.

To bring customers to your website, create social media accounts where potential patrons can discover you. Post frequently and encourage your customers to tag you if they share posts about their food. When they do, interact with them. Without this online presence, your faceless restaurant could suffer from being out of sight and out of mind.

If you want to try an experimental restaurant concept and you're unsure about investing in a storefront, opening a ghost restaurant could be the best option for you. These virtual restaurants are becoming increasingly popular in metropolitan areas, and they cater to busy, young customers who like customization and instant gratification.

About Christine Potts

Christine Potts is the senior editor of SEO content at WebstaurantStore. When she's not writing about foodservice equipment, she likes to work on her baking skills and teach her friends about the products she recognizes while eating at restaurants.

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