The economy of ghost kitchens

When I first heard the term Ghost Kitchen a couple of months ago, I immediately thought of something far sinister than what they actually represent. I guess that is just where my mind goes sometimes.

Thinking back, I am not even sure where or why I even heard the term. I have no doubt businesses like this have been around for quite some time, but with the Covid-19 pandemic they have really taken off.

Basically, here is the concept. Ghost kitchens are spaces that house delivery only restaurants.

Although it seems very simple, it actually gets quite complex.

As I was typing the description I remembered where I first heard the term. It was in an article talking about how many people think they are supporting small local businesses when really they are unknowingly shelling out there money to big corporations.

This is how it works... Let's say a large national company like Denny's is starting to feel the pinch from people not going out to eat as much due to the pandemic. Sure they have take out options, but people are just not wanting to go out that much.

So what they decide to do is spin off a brand that may or may not focus on a specific cuisine. Let's say Bob's Burgers. Pretty obvious what they are focusing on right? You are sitting at home jonesing for a burger and you look through the online reviews.

Bob's burgers jumps out at you. The reviews are great, and you have never heard of it before, must be a new mom and pop shop right?

Little do you know (unless you do your research), it is actually a ghost kitchen running out of the same Denny's that you used to go to every Sunday to get your Grand Slam breakfast.

Of course, not all ghost kitchens are quite so nefarious or devious (if that is how you see it). Many small business rent space in ghost kitchens to simply get their feet under them. Without having to worry about the up-front outlay for real-estate, equipment, wait staff, it can really give a new business a boost.

Celebrity chef Guy Fieri just announced the opening of a handful of ghost kitchens in the Detroit and Lansing areas.

In addition to ghost kitchens being an alternative for businesses struggling during the pandemic, it has also become big business for the companies that house these ghost kitchens. My brother in law was telling me the other day that the Kroger grocery store down the street from them in Columbus, OH houses at least one ghost kitchen that he knows of.

Savvy investors are buying space and building their own kitchens to lease out tenants. In some cases there could be multiple brands/restaurants housed in a single ghost kitchen space. Like my Denny's example above, even some restaurants are renting out space in their kitchens to other businesses.

I decided to write this post, because this is a very novel concept that I had never considered until it was brought to my attention. It is amazing how businesses can adapt to changing circumstances and create, improve, or expand a simple concept into something massive.

Just remember the next time you are ordering takeout from that local small business, it might be more than it seems!

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@eos.detroit Staff Writer/BOID Team Leader
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