By Nate McCallister

Last Updated December 29, 2020


With the introduction of apps such as Uber Eats, GrubHub, and DoorDash, there’s no stopping the growth of the food delivery market. COVID-19 lockdowns just added fuel to the fire. As I wondered how my community’s beloved restaurants would survive the new normal of limited capacity dining rooms and skittish customers, I learned how some food businesses had quickly adapted and were not only surviving but thriving thanks to a concept called "ghost kitchens." 

What Is a Ghost Kitchen?

A ghost kitchen is a restaurant that exists in name only. They may be owned by 3rd parties or be alternative brand names for established businesses. The ghost kitchen leverages other restaurants facilities and staff to prepare their items.  For example, Applebees could fulfill food under a made up restaurant name like "Wings Wings Wings." Likewise, an entrepreneur could create a burger chain and have the items prepared by an established chain like Red Robin. Typically, the food is the same as it would be produced in the restaurant itself.

By partnering with established food delivery services or independent contractor drivers, they are able to fulfill online food orders without their own dining room space. This can also give companies a way to sell other food items that they aren't well known for. Think of it like drop shipping for food.

Ghost kitchens also go by names such as cloud kitchens, virtual kitchens, shadow kitchens, and dark kitchens.

Before you tell your friends about this genius way that food service entrepreneurs are disrupting the restaurant industry, I want to let you in on some of the downsides of using these services. 

My Recent Ghost Kitchen Experience 

In my house, we love chicken wings. I've honestly never had a bad chicken wing. Some are different and better than others, but they are all chicken wings and should taste like...chicken. 

That wasn't the case when I recently purchased from what I thought was a new local wing restaurant called Westar Wings.

Fake restaurant ghost kitchen

Looks legit, right? 

I wasn't thrown off by the fact they had 0 reviews and I had never heard of them. Wings are wings...I thought.

The wings arrived and dear Lord, they tasted like they were from baby turkey vultures. Repulsive to say the least. We had a couple and decided it wasn't smart to eat anymore.

I tried to call the company and got no reply. So, I did some Googling to find Westar Wings online...nothing.

So, I typed in that address and this is what came up.

Ghost Kitchen

Westar Wings was a front for a nasty little restaurant inside of a Renaissance Hotel.

Never in a million years would I have intentionally ordered wings from Renaissance Hotel. I was pissed so I did some digging into the concept of ghost kitchens. 

Here's the big issue I found.

#1 Flying Under the Radar of Public Health Regulators

With everyone being overly careful about wearing masks and dousing people in hand sanitizer before they allow them to enter public spaces, I was shocked that there are food service businesses that aren’t even following pre-COVID health standards for sanitation. 

These establishments have an online presence on food service apps complete with a menu and slick-looking pictures of their food and interior spaces. When a customer places an order, his or her food is quickly prepared in a space that looks much different than the online pictures. 

Food delivery drivers and nosy food critics give the low-down on this new food scene, and believe me, it goes pretty low. Atlanta is known for its delicious restaurant food, but times have changed. Virtual kitchens allow foods to be prepared nearly anywhere without needed visits from the health department.

A food delivery driver in the area who drives for several services said that she’s picked up food from industrial warehouses, trailers, and even private residences. She said that one man had her sit on his couch to wait until he finished fixing the food for a customer. 

San Francisco also has a reputation for haute cuisine that will potentially be destroyed by the ghost kitchen concept. One of the city’s food critics uncovered a virtual kitchen establishment that was located in a seedy part of town. The “kitchen” made food for several online brands. When food orders were done, staff members placed the food in lockers for delivery drivers to pick up. The lockers lacked heat or refrigeration that supports food safety

#2 No Customer Service If Anything Goes Sideways

The food entrepreneurs who operate these dark kitchens are skilled at optimizing space to accommodate multiple orders for different online brands. This is a short-term win for these online eateries, but it makes tracing food mishaps harder. Imagine how difficult it would be to trace an E. coli outbreak for the public if several food operators rented one space to make dishes for several virtual restaurant brands. When things go wrong, I believe that customers will be in the dark about their food orders.

#3 Potential for Brand Fraud

I found a side effect of the virtual kitchen concept that’s especially disturbing. I can’t describe it in any terms other than brand identity theft. For example, the little Italian restaurant around the corner from you is viewed as a neighborhood treasure for its food and the superior dining experience that it consistently delivers. Before COVID, it was the place for special occasion meals, and you can’t wait until it returns to full capacity seating again.

The restaurant’s owners won’t offer delivery because they fear that food quality would suffer. That’s okay. You may still be able to order the restaurant’s food online courtesy of dishonest virtual kitchen operators. These operators scout out restaurants that have good reputations in the marketplace and just offer online food options in their names.

Of course, you won’t get the same wonderful food quality that you would by going to the restaurant in person, but I would expect some drop in quality just because a food item had to go through the delivery process. What I wouldn’t expect is that the food wasn’t actually prepared by the chefs at the Italian restaurant.

Unscrupulous virtual kitchen operators can potentially tarnish a restaurant’s brand that the owner spent decades to cultivate.

#4 Enables Unfair Labor Practices

Many gig workers already have a tough time earning a fair wage for the work that they do, and decent work environments are often traded off for the chance to make extra coin. The proliferation of virtual kitchens make it even harder for independent contractor delivery drivers to make a living wage without literally living in their vehicles waiting for the next food pick up.

Most of these delivery drivers work for several services and independent virtual kitchens that are located around their cities. When several drivers line up for food pickups at low-rent virtual kitchens, I doubt that many of these places even have enough bathrooms to accommodate them.

#5 The Traditional Dining Out Experience Is Dead

One of the hidden side effects of the ghost kitchen concept is the death of the traditional dining out experience. As food service operators get everyone conditioned to accept lower-quality delivery food and no customer care, I fear that we may never get back into the dining rooms of our favorite restaurants again. There won’t be enough demand for in-person dining, and restaurant operators can make just as much money without your physical presence in their establishments.

Conclusion

While cloud kitchens appear to be the wave of the future akin to cloud storage and virtual private networks, they really have the potential to drive the U.S. restaurant industry into third-world status overnight. If you value the dining experience and your health, my advice is to find out exactly where your food is prepared and who handles it

If you’re not comfortable with the answers that you find, wait to patronize an actual restaurant when it becomes safer to do so. Also, I encourage you to raise awareness of this issue with your local government representatives. Hopefully, we can drive these dark kitchens back into the Dark Ages where they belong. 

Ghost kitchens don't solve a consumer problem like good business models. They provide entrepreneurs with a way to earn money through less than honest business practices. Not a fan.

Ghost Kitchen

About the author

Nate is the founder and main contributor of EntreResource.com. He is a lifestyle entrepreneur who spends his time building businesses and raising his four kids Sawyer, Brooks, Van and Lua with his beautiful wife Emily. His main interests include copywriting, economics and piano.

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