How Does Ghost Kitchens Work? A Step By Step Guide 2024

When the pandemic happened worldwide, all kinds of businesses were in terrible condition. The restaurant business was not out of this dire situation. Since then, most people started engaging more with online activities. So, the restaurant business owners started to do their business online. After the pandemic, This online restaurant business concept became more popular. And this online restaurant business concept is called Ghost Kitchen. 

This business is similar to the cloud kitchen business. Many people asked, “How does ghost kitchens work?”. Or you may ask someone the same question. This article will teach you about the whole concept of the ghost kitchen, the business plan, and many more. So let’s get started! 

What is a Ghost Kitchen Restaurant?

Ghost Kitchen, the word sounds like a kitchen controlled by ghosts. No! That is not the ghost kitchen meaning. The actual Ghost Kitchen Definition is a concept of a kitchen business that operates through take-out and delivery only. Bricks and mortar are absent. It is another level of the restaurant business concept. The ghost kitchen operates online. The customers order the food online, which is directly delivered to the customers.

Those who heard about ghost kitchens for the first time usually ask, “How did ghost kitchens start?”. When the pandemic happened in 2020, you saw that all physical activities were prohibited. Then, the restaurant owners decided to prepare the food, but it would be delivered directly to the customers. No dine-in options are available so that it will be a great idea. Customers order food online because they cannot go outside for the deadliest pandemic.  

Also, many people started this ghost kitchen business. As we know, many people are jobless and having a financial crisis, and this ghost kitchen business was one of their best options. Since then, it has become a great business.

Types of Ghost Kitchen Business Model

Every business has to go through with plans and types. So the ghost kitchen is not out of it. It also has to go through a restaurant business plan. There are three different types of ghost kitchens. If you want to start a ghost kitchen business, you must first know the types of business models and choose which type of ghost kitchen business you want to start with.

Business Models of Ghost Kitchen:

• Ownership: 

This ownership is mainly of two types. You have to go through any one type of ownership. The Ghost Kitchen business is owned independently or by a third-party service, which will rent out the whole ghost kitchen to chiefs and business owners. 

• Origin:

The origin of a ghost kitchen means where the business should start. Some expand the range by creating partnerships with other kitchens so that they can produce their custom menus. Other ghost kitchens start as one-off delivery-only concepts that fulfill orders from a shared kitchen space.

• Structure: 

Structure is the part of a business that defines how the business should operate. There is a ghost kitchen that only operates from a single location. From this one location, they produce everything in a large commissary kitchen, while others are expanding hub-and-spoke systems with prep kitchens.

How Does Ghost Kitchen Work (6 Steps)

To start a ghost kitchen business, you must know how does the ghost kitchen concept works, ghost kitchen requirements, proper marketing budget plan, and many more. The ghost kitchen working process is the same as other virtual kitchen businesses. Neither of the businesses has a storefront. In addition, both do not have a dine-in facility because both work on a digital platform.

However, the ghost kitchen has no specific place like traditional restaurants. Which means there are no chairs and tables to eat meals on. It only has a kitchen used to cook the food and deliver it to the customers. 

The ghost kitchen requires bigger spaces for a kitchen, storing the food and other necessary equipment. But it requires less than the traditional spaces. The ghost kitchen takes the order online, prepares the food, and delivers it to the customers by a delivery man. Those who do not have their own delivery man deliver the food through third-party delivery apps like Ubereats, Doordash, and many more. 

Let's talk about the crucial points of How does ghost kitchens work.

1. Placing the orders

A consumer places the order online or from any delivery app to the ghost kitchen. When the order is done, the ghost kitchen staff prepares the food. The ghost kitchen does not have any dine-in space to eat the meals, so the order-placing process is done online. 

2. Make Receipt of Order Details

After placing an order, the consumer has time to make a receipt of the order details. You can easily place the order and make the receipt instantly using the POS system. This receipt will help you get the order details, which will be delivered to the consumer. In addition, you will know early on which ingredients you need to use and what kind of cuisine they want to eat.  

3. Order Preparation

It is time to start cooking the food with fresh ingredients using the equipment. Remember that you have to cook the food and finish it in time. While the food quality is most important to the consumers, you must finish the cooking process and deliver it just in time. Otherwise, you will start losing customers, and it will be a reason for getting a wrong impression of your ghost kitchen business. 

4. Packaging of order

Once the food preparation is done, it is time to package the food order. Remember that packaging is one of the most essential parts of the consumer. You may ask why it is so important. If the packaging is good, you will get a good impression from the consumer.

5. Deliver the order

When packaging is complete, it is time to deliver the food to the consumer. When you make the receipt of order details, there is an address written on the receipt. Note the address again and give it to the delivery man so that a delivery man can deliver the food to the address. 

6. Get reviews from Customers

After completing the process, you can take a review from the customer. If the customer gives a review of your site or your software, that will make a positive impression on your company. Based on the review, the new customer can judge whether your ghost kitchen business is good or bad. You need to ensure that you deliver the best quality of cuisine to the consumers so that they can give you a good review about the food and your ghost kitchen business.

Benefits of a Ghost Kitchen Business

Every business has many individual benefits. Ghost kitchen business is not out of it. People are still doing this business because of the many benefits of doing a ghost kitchen business. For this reason, this business is becoming trendier day by day. There are many benefits to doing business in the ghost kitchen. If you plan to open a ghost kitchen business, you should know the benefits of it. So let’s see the benefits of this business below:

• Less space needed

This ghost kitchen business does not require a vast space. You can do this business from a space. All you need is a kitchen, cooking equipment, restaurant POS Software, 1 or 2 chefs, and 2-3 staff, and that is it. 

• Low Overhead Costs

You can do the ghost kitchen business at a very low cost. You don't need to rent a big space. All you can manage the business is from home or any short space. For this reason, you don't need to hire as many staff members as restaurants do. So, having a shorter space and hiring fewer staff members can make your business more cost-effective. To make it more efficient for lower cost, you will benefit from using the POS system for better results.

• Location options

For this business, it is an excellent opportunity to have location options. As the ghost kitchen does not require any specific location for doing business, like a restaurant, you can have location options. Which means you can do business in whatever location you want. 

• Raw materials Quality and cleanliness are Guaranteed

Raw materials and food quality are very concerning for ghost kitchen business owners. In a ghost kitchen, only high-quality materials are used. So, there is no need to worry about the quality of raw materials. In addition, a ghost kitchen must have to maintain the cleanliness of the kitchen. So, cleanliness is guaranteed. 

• Adaptability

Since the ghost kitchen requires less overhead and set-up equipment, they can be more flexible than traditional restaurants. You can test a variety of menu themes and items or change your ghost kitchen's offerings based on market success. This is the way you can adapt to the ghost kitchen business.

Ghost Kitchen Vs. Cloud Kitchen

Though ghost kitchen and cloud kitchen concepts are similar, there are still a few differences between them. Let’s see the differences below:

Ghost Kitchen: 

• No Physical Presence.
• An economical type with lower overheads.
• The Rolling Plate: To reach more people and serve a more extensive clientele, it uses “ghost kitchens.”
• No dine-in service; only accepts online orders.
• Operations involving several restaurant brands.
• Focus on Delivery and Takeout (e.g., Ubereats, Doordash)
• Ghost kitchens are efficient and cost-effective.

Cloud Kitchen:

• Consolidated virtual restaurant brands.
• Simplified operations and pooled resources.
• The Rolling Plate: Works with cloud kitchens to offer guests various menu alternatives.
• Cloud kitchens frequently have a purpose.
• Operations Driven by Technology.
• Exclusive Restaurant Brands.
• Cloud kitchens maintain scalability.

FAQ

a) How does a ghost kitchen help your restaurant grow?

There are five ways that a ghost kitchen helps your restaurant business grow. Those are: 

• It turns into a complete solution for your business.
• It lets you concentrate on food.
• Provides the ease of experimentation.
• Makes it possible to make multiple.
• It will optimize revenues with the cost minimization.

b) Are ghost kitchens profitable?

Yes, the ghost kitchen business is now one of the most profitable. It was not that trendy of a business before the pandemic. The ghost kitchen business has become trendier when everything is normal after the pandemic.

c) How do ghost kitchens make money?

Making money from the ghost kitchen business, the owners often focus on expanding their customer base, optimizing their menu, and implementing effective marketing strategies. This is the way the ghost kitchen restaurant owners make money.

d) Can I start a ghost kitchen from home?

Of Course, you can. When the pandemic was held in 2020, many people started ghost kitchen businesses from home. And they succeed in doing business. Not only that, ghost kitchens are a trendy business now. You must make proper plans, have a kitchen, and hire a delivery man. This is how to start a ghost kitchen from home.

e) Are ghost kitchens legal?

Yes, the Ghost Kitchen business is legal. But you have to go through some steps. You have to get some licenses, which are required in the USA. After that, you can do a ghost kitchen business legally. 

In Summary

So, that is all about the ghost kitchens explained in this article. Also, now you understand how ghost kitchens work. This is the only business where you can execute the whole business from home or any space. This business does not require a high amount of investment like traditional restaurants. A short space for a kitchen, equipment, the best POS system, and 1-3 staff, and that’s it. Anyone can do the ghost kitchen business. But first, they have to gather knowledge about “How do ghost kitchens work”. Also, They have to make necessary licenses, which are required in the USA. After knowing all the steps, you can be a successful ghost kitchen owner.