Ghost kitchens are essentially restaurants that don’t have in-house dining. They have kitchens and POS systems, but they focus exclusively on fulling online orders through delivery apps like GrubHub and DoorDash.
The ghost kitchen business model has been gaining traction lately and you’ve probably hear alot of chatter. It’s a great way to add an additional revenue stream to your business without adding a ton of overhead costs. If you’re wondering if you should explore this concept for your business, here are five reasons why you should invest in ghost kitchens.
1. Less Overhead and Higher Profit Margins
Ghost kitchens have been seen to offer more profit than traditional restaurant setups. While traditional restaurants have an average profit margin of between 3% to 6%, ghost kitchens come with a profitability of 15% to 20%. This is up to five times more profit for you to take home or reinvest to scale up your food truck business.
2. Ghost Kitchens Are Present and Future Proof
Sales are something you wouldn’t have to worry about with ghost kitchens. To start with, 60% of Americans currently use food-delivery services at least once per week. The food delivery market itself is expected to grow to an estimated over $223 billion by 2027.
Hitting closer to home, the global ghost kitchen market still rose to a value of $52.23 billion in 2021, and in 2026 this value is expected to hit a massive $89.5 billion. All these stats simply mean more customers will flood the market and there’s potential to make even more money.
3. They Help You Save Startup Costs
Ghost kitchens are great solutions for aspiring food truck owners with limited financial capital. If you fit here, opting for a shared ghost kitchen will save you thousands of dollars on rent, equipment, interior design, waitstaff, kitchen maintenance, and menu printing, to mention a few.
What’s more, you don’t have to run on only delivery, which can cost some bucks. You can prepare your food in a ghost kitchen, package it to keep in your truck, heat the food when an order comes in, and then have customers come to pick it up at your location.
You adopt this ghost kitchen model as a starter, saving yourself some money that can be used to scale up your food truck business in the future.
4. You Safely Expand Your Business
Let’s assume you only need more cooking space and staff to fulfill an overwhelming number of orders. Would you rather spend $50,000 to $175,000 on a new truck or secure a shared cooking spot for $15 to $30 per hour? As an existing food truck owner looking for that additional revenue stream, ghost kitchens serve as your less risky investment.
Even if you want to have a ghost kitchen for yourself, you only spend an average of $20,000 to $60,000. You scale your business while saving yourself at least $30,000 worth of risky investments.
5. Test New Menu Items
Ghost kitchens have proven to be effective for testing out new menus for your business. You create a new restaurant online with no links to your food truck, prepare your new recipes from your remote ghost kitchen, and monitor its reception from customers that purchase from your new online outlet. This time, you safely expand your business offering without risks to your brand reputation.
Reaping Benefits From Ghost Kitchens
Ghost kitchens have opened up new opportunities for both brick-and-mortar restaurants and food trucks to utilize. When you invest in ghost kitchens, you save money on starting up and overhead costs. You explore an explosive trend that helps you to meet your business goals in the competitive food industry.
Legion Food Trucks can help you select the perfect ghost kitchen model to invest in to reap full benefits. Contact our experts today to get started!