Ghost kitchens are essentially restaurants without storefronts.
There are no spaces for customers to dine in and the kitchen itself is usually tiny. The concept is relatively new in the culinary world and revolves around a kitchen and a chef or chefs preparing food that is available via delivery.
The chance for merchants to utilize this concept as a means of increasing their profit margin has resulted in the widespread popularity of ghost kitchens in the United States. While ghost kitchens, also referred to as virtual kitchens, have a myriad of plus points that make them seem like an appealing business venture, there are of course disadvantages.
Inconsistent Customer Experiences
Without customers visiting a physical location, your staff won't have the opportunity to make a positive impression. The difference between a customer collecting their food from a restaurant and receiving it via a third-party delivery driver is huge. It's likely that delivery drivers will have multiple stops to make on the way and an expected time frame may not be met. A driver could have your customer's food in the vehicle for an hour or even more which could have a massive impact on the taste. This can of course be remedied by investing in good quality containers that will keep food fresh and warm.
Commission Fees
Partnering with food delivery services can result in hefty commission fees being applied. This will eat into profits as these fees can range from anywhere between 10 and 30 percent. This is without factoring in the additional cost of advertising on these platforms to make your business stand out from the competition. Depending on budget, it may be worthwhile considering employing a delivery driver to reduce costs. The hidden costs of running a ghost kitchen are often overlooked when they really should be at the forefront of owners' minds.
Competition
The inability to have face-to-face interactions with customers and the inconsistencies with deliveries can result in your competition taking your custom. Rather than competing with restaurants in your immediate area, you may end up competing with restaurants from all over your city. Also, no physical location means you miss out on walk-in traffic and will never experience the free marketing that is a tasteful storefront with a huge sign over the door. Utilizing the right kind of VK SaaS for your ghost kitchen is important for both exposure and profitability.
Customer Loyalty
Face-to-face, positive interactions with staff as well as a nice atmosphere are two major things that encourage customers to return to restaurants. With a ghost kitchen, you have neither of these and instead are reliant upon the quality of your food alone, and with the potential for inconsistent deliveries outlined above, this can be problematic. Strong branding is important for retaining customers and there are definitely a set of best practices that you should follow to maximize the likelihood that your new customers turn into regulars.
Inaccessible for Certain Demographics
As your restaurant will only exist online, you could be alienating countless potential clients, which in turn could make your VK growth rather challenging. For example, it's highly likely that elderly people in your city will not use delivery apps and instead prefer to visit restaurants in-person. If you have an exclusive partner, you're missing out on people who use alternative apps. A restaurant with a physical location will always be accessible to more people. As such, this is one of the major downsides of opening a ghost kitchen.
Bugs and Glitches
Relying on technology can be worrying, at times. Glitches on the delivery apps you use can leave you without a way of receiving orders which is disastrous when they're the only means of being contacted by customers. While these glitches may be infrequent, it's still something that owners need to be aware of.
Ghost kitchens have established themselves as a major force in the culinary industry. They offer individuals the chance to start their own restaurant with minimum expenditure and minimum start-up cash. For more information, check out this post on how to make your ghost kitchen profitable.
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