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Why Most Ghost Kitchens Will Fail in 2021

Entrepeneur 19 Nov 2020 11:30
Why Most Ghost Kitchens Will Fail in 2021
Image credit: Maskot | Getty Images
4 min read
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This year, every restaurant franchise is grappling with decisions about delivery. But the fact is, delivery was a priority even before the pandemic, with 78 percent of respondents in last year’s National Restaurant Association survey looking to focus on their off-premise strategy.

This year, 33 percent of customers report that they are ordering more take-out, creating a significant new revenue stream for restaurants willing to double-down on delivery.

Ghost kitchens — professional cooking facilities created for the preparation of delivery-only meals — enable restaurants to rapidly start delivering food to their customers. These kitchens exploded in popularity this year, but the question remains, are ghost kitchens here to stay, or will they go the way of the food hall and crumble like a house of cards?

What's in it for the restaurant?

From a value perspective, it's easy to understand the appeal of a ghost kitchen. By cutting out the expense of front-of-house operations and dining rooms, restaurant operators can significantly reduce rent and labor costs. Delivery is also difficult for most brands to do well on their own, and facilities like DoorDash Kitchens in California already have the infrastructure and agreements in place to enable third-party delivery for their tenants.

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National Restaurant Association
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