A Look Inside a Manhattan, New York, Ghost Kitchen

By Liz Barrett Foster

(The text below is the English version of an article that is presented in Russian inside the Spring 2021 edition of ProChef, a Russian magazine published by KraftHeinz.)

America has one of the fastest growing online food delivery markets, according to Androit Market Research. One of the factors helping the delivery sector grow is ghost kitchens. A recent report from Euromonitor estimates that there are around 1,500 ghost kitchens in the United States, and the numbers continue to stack up.

Ghost kitchens in the U.S. have been promoted as offering low start-up costs, more flexibility, and less overhead. So, when the Coronavirus pandemic hit in 2020, forcing many restaurants to close their doors or minimize dining room capacity, some operators took a closer look at the ghost kitchen opportunity.

Everyone from first-time restaurateurs to large restaurant corporations have been dipping their toes in the ghost kitchen pool. But how true is the ghost kitchen hype? Are ghost kitchens a temporary band-aid for a passing crisis or a permanent solution for a changing customer who demands more delivery? There’s no denying that the numbers of ghost kitchens are exploding in countries such as China and India. Is the U.S. next?

We reached out to seasoned restaurateur and celebrity chef Franklin Becker (pictured below). He’s the face behind F. Becker Hospitality, which introduced New York to The Little Beet and Hungryroot. Becker opened not one, but four ghost kitchens in response to the pandemic. “We have to learn to make money outside of our four walls, because the four walls are not enough to survive anymore,” says Becker. “Ghost kitchens give us a virtual presence, which is unlimited.”

Ghost Kitchen Costs

Becker’s four virtual restaurants are housed inside a 5,000-square-foot space in the SoHo neighborhood of Manhattan, New York, owned by Zuul. Zuul provides a kitchen suite (nine total kitchen suites inside the building, each ranging in size from 184- to 265-square-feet) as well as management of dishwashing, trash services and runners to take food out to delivery drivers.

Operators in the Zuul kitchen space bring their own kitchen equipment, oven, and POS system. They are provided with an oven hood, three-compartment sink and hand sink. Operators also have their restaurant menu included in a proprietary Zuul Market for customer online ordering. All operators inside Zuul pay a monthly membership fee that covers the costs of shared spaces, phone, internet, pest control and typical restaurant upkeep fees.

Becker utilizes two Zuul kitchen spaces to run his four ghost restaurants, which include Shai Hummus, a virtual outpost of his restaurant serving Mediterranean cuisine; Universal Taco, which offers globally inspired tacos; Galinha Portuguese BBQ, which serves a Portuguese barbecue menu; and Butterfunk Biscuit Co., an investment project run by chef Chris Scott. “My space is 490 square feet, along with a shared walk-in and dry storage space,” says Becker.

Entrepreneurs expecting ghost kitchens to provide a quick, low-cost entry into restaurant ownership may experience some sticker shock, according to Becker. “The expenses are deferred to different areas,” says Becker. “You’re saving money on front-of-house labor, managers, and cosmetic work on a typical restaurant, but you’re spending more on branding, packaging, SEO, SEM, and organic social media.” Along with the costs of social media promotion, Becker says he also runs ads on third-party delivery apps offering $5 off a customer’s first order.

With a traditional brick-and-mortar restaurant, operators benefit from foot traffic to help in the promotion of a brand. Passersby traffic is essentially free advertising. The same cannot be said for a ghost kitchen. “Unless you’re coming at it with an existing reputation, which luckily, we are, the chances of growing a ghost kitchen brand off the internet is challenging, and costly.”

Processing Customer Orders

In a standard ghost kitchen setup, a customer pulls up a third-party app, orders from one restaurant and pays for the delivery from that restaurant. With the Zuul Market, customers can order from any of the kitchens inside Zuul for one delivery fee, essentially like a virtual food hall. So, theoretically, someone could pull up the Zuul Market and order from all of Becker’s ghost kitchens, creating one order instead of four. The perk saves the customer delivery costs and brings more orders to Becker. “Zuul’s SoHo location, online marketplace, and ability to partner with businesses for more orders, all attracted us to this ghost kitchen model,” says Becker.

While the food inside Becker’s kitchen is all still made from scratch, he does recognize that the food must go out quicker when running a ghost kitchen. To handle this, he brought in specialized equipment that helps speed up order processing. “Our equipment helps us get food out quickly, correctly, and at the proper temperature,” says Becker.

The majority of ghost kitchens run with two staff members at the helm at any one time. Since Becker is running four kitchens out of one space, he normally operates with a kitchen team of four throughout the day. “We have a prep team that comes in in the morning, and then one person per concept for the rest of the day,” says Becker. “They work in conjunction with one another, they know all of the workstations, and they help one another when needed.” And while that crossover may spell chaos for some, Becker says that the speed of the kitchen during the day reminds them of working in a freestanding restaurant with all of the orders coming in. “It’s a lot of fun,” he says.

Delivering Orders

When it’s time for the food to go out to customers, if the order is being delivered within a specified radius of Becker’s restaurants, it’s taken by a delivery company called Relay. If it’s outside the delivery zone, it’s handled by Uber Eats.

Becker says that packaging food for delivery is a very different experience than preparing it to be eaten inside a restaurant. “Ultimately, if the food is delivered to the guest and something is missing, you’re going to be dealing with complaints,” says Becker. “The customer can’t just turn to their waiter and ask for ketchup.”

Becker sees a promising future for ghost kitchens that are used to expand existing brands. “I’d like to take a couple of my brands and bring them to brick-and-mortar so they can get enough play in the public eye,” says Becker. “If they’re in the delivery zone that’s existing, those orders will come out of the restaurant; if they’re not, the orders will come out of a ghost kitchen.”

Beyond the promotional costs and branding hurdles, Becker says that the biggest misunderstanding about ghost kitchens is that it’s easy to succeed with one. “I don’t think there’s any business out there where it’s easy to succeed,” he says. “Every business presents challenges.”

The Ghost Kitchen Process

1.     Order comes into the system from customer

2.     Order displays on the computer screen in the kitchen

3.     Kitchen team prepares the order

4.     Team packages the order

5.     Team calls for a delivery driver using the computer screen

6.     Runner takes order to delivery driver

7.     Delivery driver picks up order

8.     Order delivered to customer