One of the original promises of ghost kitchens was lowering the barrier for restaurant entrepreneurs to start their own companies. And for many restaurant startups, the promise has been fulfilled, even as enterprise brands flooded the ghost kitchen segment.
Daniella Davis is a co-founder of The Kitchen Terminal, a shared-kitchen operator with three facilities in Southern California. “We’ve had plenty of clients come to us first to try their concept and test their market before going to a brick and mortar,” she said. “Our concept is kind of like a springboard.”
She identified a former client that used their kitchen to fill delivery orders through DoorDash that went on to open a brick-and-mortar restaurant in Orange County. Another client, a steakhouse, used TKT’s facilities to train its staff and start serving food while it was waiting for construction to finish on its restaurant.
Shared commercial kitchens save restaurants money by “alleviating the costs of opening so they can invest their money in things that are going to grow their business,” said Davis.
TKT also caters to startups by offering a cost-effective way of dealing with California’s shared-kitchen regulations. “We actually worked with the [Los Angeles] health department to develop the shared-kitchen complex program,” said Davis. TKT is working with other health departments to write similar regulations across the region. Ultimately, they want to “expand to where we have one of our locations every hour as you drive up Southern California,” to help clients expand throughout the region, said Davis.
Rust Belt Ramen, a new Japanese restaurant in rural Michigan, fills takeout orders out of a commissary kitchen in a church. The business opened last week, said founder Anthony Cox, and it had a banner first day, blowing through its supposed capacity of 76 daily orders (he forgot to turn off ordering in time) to serve 85 meals on the first day.
Cox said the lack of affordable real estate in town forced him to set up shop in the church.
He described Albion as a “recovering post-industrial community,” and said the main street was full of dilapidated, “almost condemned” storefronts. What little real estate is available is in designated historic areas, and “we don’t have the millions of dollars required” to renovate a building like that, he said.
Developers are working on the downtown storefronts, said Cox, but he doesn’t expect them to be ready for another two years. He’s using the ghost kitchen to prove his concept and build up a loyal customer base, and plans to move into a brick-and-mortar location in downtown Albion as soon as affordable space becomes available.
“The limitation on overhead has been a blessing,” said Cox. Because he doesn’t have to pay an expensive commercial rent bill, he said he’s able to offer meals at prices that are affordable to the college students (the church he’s in is on the Albion College campus) and retirees that make up a large portion of the population.
A longtime hospitality worker, Cox said he decided to open his own restaurant because he was “done cooking somebody else’s menu.”
Matthew McLeod is the founder of Wired Kitchens, a commercial kitchen operator building facilities in Chicago and Miami. “We certainly see a trend toward people wanting to do ghost kitchens with an eye towards opening a brick and mortar location in the future,” he said. As an example, he said Wired Kitchens had an inquiry from a Korean bowl concept, currently doing pop-ups, that was looking to set up a ghost kitchen as a stepping stone toward opening a restaurant.
McLeod noted that prospective restaurant owners made up just a small segment of the client inquiries Wired Kitchens has seen. “There’s a lot of interest from larger chains,” he said, as well as entrepreneurs that have licensed multiple brands looking to fill orders from all of them out of a single kitchen.
Chef Regina ”Reggie” Turner got into the prepared food business after the pandemic hit, and she lost her job as food and beverage director at a golf course. She started driving for delivery companies, including Market Wagon, which she described as a “farmers market on wheels,” and made the jump from driver to vendor when the business exploded due to COVID-19, and the company put out an open call to local bakers.
She started out making buckeye candies, and her business began growing a few months later when she started selling infused butter with things such as sugar and honey. From there, her business has grown as she continues to add new products—she started selling meals, such as mac and cheese in January 2021—and expanded her geographic reach. The Columbus, Ohio-based chef said she averages “425 to 450 orders per week,” from customers in Ohio cities such as Columbus, Cincinnati and Cleveland, as well as Lexington, Kentucky, and Pittsburgh, Pennsylvania.
While restaurants retain some of their appeal, they aren’t always the end goal. “I don’t think I would want to do a brick and mortar only because I love the freedom” of setting my own hours and being able to take days off, Turner said. She previously considered getting a kiosk in a large marketplace, but said she abandoned the idea after learning it would require her to staff the location seven days a week, including some holidays.
Restaurants are an on-demand business. Market Wagon forces customers to pre-order their food, and Turner doesn’t want to give up the flexibility and lower fixed costs that come with that.
Davis noted that while many of The Kitchen Terminal’s clients come in with a larger goal, some are content to stay in their shared space. “We have clients that have been with us for six or seven years,” she said.
There are plenty of stories about restaurants making the opposite move, too, going from brick-and-mortar locations to delivery- and takeout-only operations. Popular Alton, Illinois, burger spot Mini Corral will enjoy a second life as a ghost kitchen, according to the Illinois publication The Telegraph. And in Indianapolis, chef Theresa Borel launched a cajun restaurant as a ghost kitchen, barely a year after high rents forced her family’s cajun restaurant to close. “We weren’t going to pay $5,000 a month,” she said.
