They kept many restaurants in business during the pandemic when they would otherwise have to close down by lowering costs and allowing them to work with delivery services. Ghost kitchens helped brick-and-mortar restaurants recoup their losses and minimize employee layoffs by allowing them to prepare food for multiple brands and keep themselves in business. Many brick-and-mortar restaurants limited dining on their property or shut down entirely due to the COVID-19 pandemic and government restrictions. They can track the popularity of items, wait times, and customer feedback via ratings and adjust their menus accordingly. The online nature of ghost kitchens makes it possible for virtual restaurants to track customer data and analytics through the food ordering process and make data-driven decisions. Menus can be adjusted to match current trends or target multiple demographics with a variety of cuisines. The lack of a physical brand allows companies to experiment with new menus, brands, and concepts with ease and low risk. The reduced space lowers overall overhead and operational costs, thus yielding higher profit margins without reducing the price of the food provided. Whereas a typical restaurant delivers 15 to 20 orders per hour, a ghost kitchen can deliver 60 orders per hour with a single employee. Optimized delivery and increased kitchen space in a ghost kitchen contribute to lower labor costs. There is no need for front-of-house staff, renovations, and paper menus. There is no need to hire wait staff to serve customers or maintain the would-be seating area. The physical location matters less, so ghost kitchens can be set up in less expensive areas. Not needing space for customer seating and dining areas saves rent. Function Ī ghost kitchen prepares meals for a restaurant or virtual restaurant to then be picked up for delivery, takeout, or given at a drive-through. Using a ghost kitchen allows established restaurants with dining-in service to expand their delivery operations without adding stress to the existing kitchen, frees up parking taken by the delivery vehicles, and allows restaurant to enter new areas with lower costs. Ghost kitchens have emerged as a business model in response to the rapid growth in consumer demand for restaurant delivery meals, the rising usage of third-party delivery applications, and the lower costs incurred by using kitchen facilities located outside of high-rent, high-foot-trafficked urban locations.
Consequently, the virtual brands were taken off of Seamless and GrubHub and each company passed policies to fact-check restaurant information and give transparency to customers using the delivery applications. Several of these locations were non-retail food processing establishments, which did not have restaurant permits to sell food directly to customers. These kitchens had names and addresses that failed to match any listing on the city's database of restaurant inspection grades.
The article was critical of ghost kitchens in New York City, where restaurant owners were found by an investigative team to be listing their restaurant under multiple different brands on delivery applications such as Seamless and Grubhub. The term "ghost kitchen" was first used in a 2015 NBC New York article.
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