Ghost Restaurant

Ghost Restaurants: The Complete Guide To Starting A Virtual Restaurant

Want an affordable first step into the food service industry? What about expanding your brick-and-mortar location without going into debt? Try starting a ghost restaurant.

In this article, the restaurant management experts at Sling tell you everything you need to know about starting a virtual restaurant and guiding it to success.

Ghost Restaurant Defined

Chefs cooking in a ghost/virtual restaurant

A ghost restaurant (a.k.a. virtual restaurant, delivery-only restaurant, online-only restaurant, or dark kitchen) is a food-service business that serves customers exclusively through phone orders, online orders, or both.

In a virtual restaurant — as the name rightly suggests — the majority (if not all) of the business is conducted via computer, tablet, or smartphone.

A ghost restaurant doesn’t have a traditional storefront with decor, signage, and a large dining room. Instead, this new business model only requires a kitchen and delivery drivers.

How Ghost Restaurants Operate

Food orders in the kitchen of a virtual restaurant

In its simplest form, customers contact the virtual restaurant via a web or mobile application. Through this software, they can view the menu, place an order, and even pay for their food with a credit card or bank transfer.

After the patron places the order, the app notifies the kitchen staff and they begin preparing the food.

When the food is ready, a delivery driver employed by the restaurant (or even a food-delivery service, like Waiter On The Way) transports the meal to the specified location.

After the customer receives the order and the transaction is complete, the mobile app releases the funds to your business.

The Benefits Of Owning A Ghost Restaurant

Man delivering food on a bike

1) Lower Overhead

A ghost restaurant eliminates the need for an expensive dining room, store frontage, and elaborate decor. Employing this model reduces your overhead to the bare minimum required to do business.

In some cases, you can even operate without delivery drivers and utilities like telephone and TV. Doing away with those expenses can improve your bottom line.

2) Less Risk

While risk is a big part of all new businesses, opening a virtual restaurant involves less risk than opening a traditional, brick-and-mortar restaurant.

The simplified nature reduces your expenses — square footage, furniture, utilities, staff — so that you don’t invest as heavily upfront before making money.

3) Simpler New-Market Testing

Testing new markets is expensive for traditional restaurants. It may even require opening up a new location with all its inherent costs and risks.

But with a ghost restaurant, you can test new markets from a central location without the time, effort, or cost of establishing a storefront.

4) Lower Dependency On Table Turnover

Traditional restaurants have two options for making a profit:

  1. Increase food prices and decrease table turnover rate
  2. Decrease food prices and increase table turnover rate

While formal, high-end restaurants can operate successfully under the first option, most restaurants depend on turnover to make money.

Running a ghost restaurant eliminates this dependency on turnover rate because you have no diners.

5) Fewer Staff Members

Labor is one of the restaurant industry’s biggest expenses. Traditional restaurants need hosts/hostesses, food runners, wait staff, and food prep.

A virtual restaurant, though, only needs to staff cooks, chefs, and other food-prep positions. This drastically reduces the costs associated with hiring, organizing, and maintaining a team.

Tips For Running A Successful Ghost Restaurant

Ghost restaurant kithen

1) Consider Kitchen Sharing

As the popularity of ghost kitchens continues to grow, so too will the popularity of kitchen sharing. In a kitchen-sharing situation, multiple delivery-only restaurants rent space in a large, well-equipped kitchen.

Benefits of sharing a kitchen include:

  • Shared costs for technology, such as POS and inventory tracking
  • Zero investment in equipment, maintenance, and infrastructure
  • Combined and streamlined supply, clean-up, and laundry services

Even if you move your ghost restaurant to its own dedicated space later on, kitchen sharing is a great way to keep costs low while getting started.

2) Don’t Skimp On Layout Or Equipment

If you choose to outfit your own dark kitchen, don’t skimp on layout or equipment.

A well-designed kitchen and professional equipment can mean the difference between a happy team (and well-prepared food) and an unhappy team (and low-quality food).

Both of those variables — team productivity and food quality — can profoundly affect the success of your business.

3) Factor Delivery Costs Into Your Prices

Your virtual restaurant doesn’t have a dining room to pay for, but it does depend entirely on delivery drivers or delivery services.

Delivery services can take anywhere from 10- to 30-percent. If you employ your own drivers, they need to be paid and you might need to include some portion of their gas cost. All this adds up quickly.

Be sure to include a portion of the delivery costs in your food prices so you don’t slowly hemorrhage money.

4) Market Your Ghost Restaurant Just Like A Regular Restaurant

When you run a virtual restaurant, you’ll have less money going toward labor and rent. As a result, you’ll have more money to put toward getting your name out there.

Many of the marketing tactics that work for traditional restaurants work equally as well for ghost restaurants, including:

  • Search engine optimization (SEO)
  • Social media exposure
  • Positive reviews

And just because your business operates mostly online doesn’t mean you can skip traditional marketing channels, like radio, print, and television. Each of those can lead to more exposure, more orders, and more success.

Effective Scheduling Is Essential For Success

Sling scheduling feature

The ghost restaurant business model eliminates, simplifies, and streamlines a great deal of the variables that make traditional restaurants so difficult and expensive to operate.

But one factor that you can never remove completely is the need for effective scheduling. As long as you have employees, organizing your team and keeping them on-task is essential for success.

Food service businesses of all kinds — from traditional brick-and-mortar establishments to virtual restaurants and everything in-between — are discovering the simplicity and value of all-in-one workforce management software like Sling.

Sling offers powerful and intuitive scheduling as well as a whole host of tools to help you optimize the way your business runs, including:

  • Time and attendance tracking
  • Built-in time clock
  • Labor cost optimization
  • Customizable reporting
  • Messaging and communication features
  • Task list
  • Geofencing

Sling's shifts feature

Sling even boasts an onboard A.I. that offers suggestions and alerts to help you avoid double-bookings and scheduling an employee when they’ve requested time off.

Sling really is the easiest way to schedule and communicate with your team whether you own an established storefront or a fledgling ghost restaurant.

Try Sling for free and discover just how easy it is to streamline your operations and keep your business on the road to success.

For more resources to help you manage your business better, organize and schedule your team, and track and calculate labor costs, visit today.

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This content is for informational purposes and is not intended as legal, tax, HR, or any other professional advice. Please contact an attorney or other professional for specific advice.

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