Andrew Martino bootstrapped his way to opening a ghost truck-themed, multi-concept, delivery-only kitchen in New Jersey that offers a more refined delivery and takeout experience with nine in-house concepts operating out of a tiny space. Six months in, Ghost Truck Kitchen is turning a modest profit, even while giving a sizable portion of each order to third-party delivery providers. The key to much higher profits for the self-funded facility, however, lies in guiding its customers to order through its own channels, so the business doesn’t have to divert nearly as much revenue to delivery fees.
After 16 years in hospitality, Martino worked with his graphic designer sister to build a brick-and-mortar facility that only evokes the feel of a ghost truck park. With corrugated metal, changeable letter boards and concept names like The Stinky Bulb, Side Pieces, Meat Candy and Just The Dip, its offerings cover a range of foods that travel well and are trendy without being flashes in the pan.
As the founder and CEO explains, the real magic of Ghost Truck Kitchen is in the details like carefully planned, complementary entrées with overlapping ingredients that reduce food waste and a tiny 900 square-foot space that retains the ability to produce significant volume at peak times.
With the business meeting initial projections as the owner sets his sights on “getting funded and expanding” to future locations, Martino stressed he’s coming at this with a long-term hospitality mindset, rather than an investor-fueled, unsustainable growth model that’s become a hallmark of new-age restaurant innovations.
“There was a huge gap in doing a more refined takeout, so our price point is higher than, typically, what people would expect from a takeout joint,” Martino said. “We use all organic produce, we use all antibiotic-free proteins, we make our entire menu from scratch and the big differentiator for us is that we make everything to order.”
As an example of ingredient sharing, the garlic-themed Stinky Bulb combines a few of the “trucks” together, using teriyaki chicken and fried rice from Bowly Moly, which is the globally inspired bowls concept. Meat Candy offers smoked meats that each come with two sides, while Underground Sandwich offers gourmet sandwiches.
“You never know how it’s going to go when you open off the bat, especially when people don’t know what you are,” Martino said of his initial ramp-up. “There was a lot of, I wouldn’t say confusion, but curiosity when we first opened, like, what are you guys, what are you doing—people have grasped our concept quicker than I expected.”
Having been featured in a Vice news story that talked about Yelp and Grubhub charging restaurants from phone calls that weren’t actually orders, Martino is outspoken about the opportunities and frustrations inherent in a newly reshuffled restaurant industry.
“I look at it as a marketing expense,” he said of third-party providers that have brought the facility many of its first-time customers. “If this is what we do to get customers to know we’re here, so be it, and then it’s on me to convert those customers to my customers.”
As many restaurants try various ways of convincing third-party customers to order directly through their own channels—so the restaurant can enjoy much better margins—Martino has tried a variety of incentives to mixed results. To encourage pick-up orders, he’s found offering customers a snack when picking up orders has proven to be one of the most effective ways to reward this behavior, even though several customers have resisted any attempts to shift their ordering behavior away from third parties.
“There’s a lot of different ways to go, and I think you need to utilize all of them,” he added. “Just to convert a small percentage of people because the reality is, it is convenient and people’s information, delivery instructions and money is already there, so it’s hard to ask a customer to take an extra step.”
Looking ahead to possible future locations, Ghost Truck Kitchen isn’t in a rush, preferring to focus on perfecting its economic model and increasing revenue before actively searching for its next facility. At present, the company is looking for a partner with a tech background to enable further innovation and experimentation with its one-owner ghost kitchen.
He views the trend of delivery brands building their own ghost kitchens and virtual restaurants as his biggest fear, what he calls the “amazonification of restaurants.”
“Grubhub now has data from, let’s say, 5 million restaurants, they know what people order, what time they order, what they prefer, what this is, what that is, [and] what’s to stop them from utilizing all of those data points and becoming a provider themselves and cutting down their costs to make food as cheaply as possible?” Martino asked. He likened the practice to what Amazon did with its in-house AmazonBasics brand that includes clothing, luggage and countless other everyday staples.
As for ghost kitchen-only operations like Kitchen United and CloudKitchens, Martino predicted it will be difficult for those brands to focus on operations, rather than constantly looking for new tenants and functioning as a landlord rather than a restaurant operator.
“I don’t see it as a food business model, I see it as a real estate play,” he said of the largest ghost kitchen brands. “I almost see it like a coworking space for restaurants where they could get a little money off the sales if that’s how their agreements are, but generally speaking, the idea for them is to get as many paying tenants into as small of a space as possible.”
His approach, he said, is different by pricing his foods higher and focusing on a premium experience, rather than going in the opposite direction. However his model may differ from other players, he’s still beholden to third-parties, with a majority of sales coming in through outside providers.
“Every time we get a takeout order from our own [internal] system I’m smiling ear to ear, because that’s the most profitable and that’s how we want people to utilize us,” Martino added. “If they place an order and expect to pick it up at 7:17, it is ready at 7:17 … we try to be down to the minute to maintain that food quality the best we can.”
