Ghost Kitchens: The Smarter Way to Open A Food Franchise This Year

Future proof and set your franchise restaurant up for success. 

If you are having difficulty opening, running, or expanding your restaurant, you are not alone. 

Countless franchises and franchise developers around the world suffer from the same problem. The time, costs, and planning that comes with opening a new location can be troublesome – especially during a pandemic. As consumer behaviour shifts towards online ordering and food delivery options, opening a brick-and-mortar store has become even more difficult. 

After the effects of coronavirus become more ingrained in society, online delivery food options will account for up to 70% of meals. If you want your franchise to survive and thrive in these challenging times, then it might be time to pivot. 

In fact, many are already pivoting away from opening any more dine-in locations, citing an unpredictable future that by far outweighs the time and effort needed to open a new location. Instead, more savvy and forward-thinking franchises are expanding by opening ghost kitchens. 

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Sometimes referred to as virtual kitchens, CloudKitchens™ or even dark kitchens – these spaces offer a much faster and convenient way of expanding your food business. Rather than trying to accommodate a very-much bleak dine-in industry, ghost kitchens put all their resources into a delivery-focused business model. By cutting the upfront and operational costs associated with running a more traditional restaurant, ghost kitchens are a highly efficient and effective way for you to expand in a transitioning food and beverage industry. 

Working with a kitchen space provider like Chef Collective allows you to open a ghost kitchen and get it up and running within weeks. Launch locations in new regions across Australia and unveil a whole new pool of customers – all without a disproportionate risk. This article will go into detail about how exactly ghost kitchens compare with traditional brick-and-mortar franchises. By the end of this guide, you will know just how easy it is to grow your franchise by using ghost kitchen spaces. 

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Why Ghost Kitchens?

Franchises have never exactly been starved for options. Drive-thrus, dine-in restaurants, and food trucks have all been popular variants of the brick-and-mortar restaurant in Australia. Now, with the coronavirus changing the way we live, eat, and work, ghost kitchens are modernising how restaurant owners and franchisees operate. 

Fortunately, the concept is quite simple, and most – if not all – restaurants are more than capable of making the transition. In a way, ghost kitchens are a natural progression of the industry. With more and more people opting for food delivery options, unused seating areas in restaurants have become a bottleneck in operations. Ghost kitchens allow franchises to eliminate this bottleneck and quickly expand and scale their food business by purely catering towards Australia’s burgeoning delivery industry. They provide your business with all the tools and space you need to expand, at a fraction of the price. 

Lowering your costs means it’s more feasible to expand into potentially profitable areas that weren’t realistic before, and with quicker set-up times, your restaurant can do this faster than ever before.  

Here are the top 5 ways ghost kitchens can help your food franchise grow at a record pace. 

#1 Lower upfront and operational costs

Put simply, opening, and running a ghost kitchen will cost you a fraction of what it would to open a brick-and-mortar location. Opening a ghost kitchen location would cost you less than AUD 40K in upfront investments, whereas traditional restaurants owners spend around AUD 650K. All these prices depend on location, size, and more, but they effectively showcase just how much cheaper ghost kitchens can be in comparison. 

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But it’s not just about the upfront investment: ghost kitchens have a much lower operational cost as well. In a typical restaurant, you need to hire a suite of front of house staff – whether it be waiters, bartenders, dishwashers, cooks, and more. With this comes more salaries to pay and more staff to manage. On the other hand, Ghost kitchens only require a few employees, allowing you to slim down your operational costs so you can focus on fulfilling the delivery-orders you receive.

Not to mention, in a ghost kitchen, you’ll be significantly cutting back on costs like rent, wasted food, and other logistical requirements of a dine-in location. The common theme in ghost kitchens is a greater emphasis on efficiency. 

With higher margins, lower costs, and more profits, you’ll be able to sit back and watch your food franchise business reap the benefits of Australia’s growing food delivery industry. 

#2 Turnkey expansion

Other than the far more reasonable financial costs, one of the huge benefits of ghost kitchens is how quickly they are to set up. It’s more than feasible to use ghost kitchens as your primary method of breaking into new markets and new locations. 

They provide a fresh alternative to months of constructions, renovations, and other time-wasting stages of setting up a brick-and-mortar location. In as little as a month, you can get up and running with these turnkey solutions. 

Let’s imagine a franchiser trying to open a new brick-and-mortar Mad Mex location. They’ll have to spend months, if not over a year negotiating the lease, organising construction or renovation works, and training staff. In comparison, all you need to do with a ghost kitchen is get the basic equipment fitted and move your chefs in. 

By taking this route, you’ll be able to see a positive return on your (much smaller) investment in a much quicker timeframe. In some cases, you’ll even be able to save money in the early stages of growing your business – something often unheard of in new restaurants that are often forced to take huge risks and gamble their way through a highly competitive industry. 

We typically expect ghost kitchens to break even on their investment in as little as 6 months, rather than the 5 years of a brick-and-mortar location.

#3 Reach more customers than ever online

The food delivery industry is expected to be valued at USD 470B by 2025. If you’re not there to cater to this growing pool of online delivery orders, your competitors will. Traditional brick-and-mortar restaurants have always struggled to find a balance between prioritising dine-in orders and delivery orders. By streamlining your processes and modernising with a more delivery-centric approach, you’ll be able to fulfil way more orders than ever before – from a much smaller space. 

At Chef Collective, we’ve done the hard work and researched which areas are the most promising locations for Australian food-delivery businesses. You’ll be opening a location in a delivery hotspot like Coorparoo in Brisbane, where you can strike the perfect balance between reasonable rents and proximity to hungry customers. Don’t forget – ghost kitchens nicely complement other dine-in locations, if you already have them. 

So exactly how easy is it to set up a franchise in a ghost kitchen? Let’s move onto the specifics.

#4 Expand quickly

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With ghost kitchens, you’re able to expand much quicker in different areas, therefore minimising risk, and maximising profits. You will never need to develop your own brick-and-mortar location each time you open a new location. All you have to do is open the ghost kitchen and wait for the orders to flow in. By pivoting your strategy to target more locations at the same time, you’re also opening up your business to far more customers through more digital storefronts at zero additional cost. 

#5 Partner with your delivery experts

Moving into a Chef Collective kitchen also gives you access to all the technology you need to operate seamlessly. Ghost kitchens operate seamlessly with various food delivery businesses, whether it be UberEats, Deliveroo, Doordash, or any others. But tracking all these orders at once can become complicated. 

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In our ghost kitchens, you’ll be able to track and manage each order through one single tablet. All you have to do is start cooking. 

On top of this, Chef Collective offers specialised support to help you manage your transition into the delivery-focused world. By working with us, you’ll be able to run your business with the peace of mind knowing that we are always there to help. We also help you take care of maintenance, security and more so you have less to worry about.

Ready to open a ghost kitchen?

At Chef Collective, our goal is to drive innovation and help build a new era of successful F&B franchises. We’ve been at the forefront of the delivery-centric restaurant world, helping businesses find renewed success in a rapidly changing world. 

Interested in capitalising on a growing market in our kitchen spaces? Get in touch with us today. We’re also more than happy to hear your questions or inquiries.


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