If you deliver food for DoorDash or Uber Eats, you may notice that some deliveries come from locations without signs or even an entirely different restaurant. The practice of preparing food in a separate kitchen or a different restaurant is known as running a ghost kitchen. It became a major trend during the height of the pandemic as demand for delivery services grew.
So, why do restaurants use different names on DoorDash? Setting up “ghost kitchens” allows restaurants to keep up with demand in specific regions. It also helps keep operating costs down.
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What Is a Ghost Kitchen?
Types of Ghost Kitchens
- Stand-alone mobile trailer or building. Typically they will either make the food for one restaurant, like Wendy’s and McDonald’s and feature that restaurant’s branding. Or, the one that prepares food for several brands that can be prepared in the same kitchen. The trailer in the photo above is one that makes food under at least five different brands.
- Restaurants listing under several names. This got popular during the Covid pandemic when restaurants would list themselves as 2 or more names in apps like UberEats. Typically they’ll have their own branding, but the food is prepared in the same restaurant’s kitchen.
What Is a Delivery-Only Restaurant Called?
Delivery-only restaurants are called virtual brands. Virtual brands typically operate out of ghost kitchens, which may include space in unmarked locations or existing restaurants. Virtual brands are created to reach more customers. The brand is “virtual” as it does not have a permanent, physical location. It is created for deliveries only and does not offer a place for diners to come in and eat.
Many virtual brands are owned by large companies. The owners of a Red Robin in the Sacramento area started selling food under the brand name “Chicken Sammy’s.” The food was identical to the items on the Red Robin menu but included different branding and labels.
While some virtual brands are developed by successful restaurant franchises, others are launched by entrepreneurs and independent restaurateurs. The lower costs allow almost anyone to set up a new virtual brand. Unfortunately, many of these brands go unnoticed by health inspectors.
An investigative report from 2015 examined the top 100 restaurants in New York City. 10% of the restaurants had never received a health inspection and were not licensed to operate commercial kitchens.
Why Do Restaurants Have Multiple Names in Food Delivery Apps?
When a restaurant includes multiple names in a food delivery app, it is running one or more ghost kitchens. The ghost kitchens contain the same physical address as an existing restaurant, resulting in multiple names.
For example, you may pick up an order from a restaurant that appears in the same physical location as a Chick-fil-A. This likely indicates that the manager of the Chick-fil-A location is renting out kitchen space to a virtual brand.
What Is the Point of a Ghost Kitchen?
The growth of food delivery apps has led to an increase in ghost kitchens in most major cities. The pandemic accelerated the growth of the industry. The total revenue from US food delivery apps in 2020 was $26.5 billion, resulting in a 204% increase in just five years.
Over 111 million US citizens use food delivery apps, which is over one-third of the population. Ghost kitchens help restaurants meet demand. Ghost kitchens are typically used to launch new businesses or expand the service range of existing brands. For example, a successful restaurant with a single brick-and-mortar location may want to reach customers across the city.
The delivery range for DoorDash and GrubHub is a five-mile radius around the restaurant. Opening a second location in another part of the city increases the brand’s service area. A ghost kitchen allows restaurant owners to reach new markets or meet demand without adding significant overhead. Setting up a ghost kitchen or a virtual brand takes less time. You can quickly set up a kitchen in a new location and start serving a larger audience.
The costs are also much lower compared to starting a new restaurant. You do not need to pay for servers, hostesses, or bussers. Ghost kitchens also have fewer expenses, as they do not need chairs, tables, tableware, linens, and signage.
The rise of ghost kitchens has confused customers and food delivery drivers. Some physical locations appear to include multiple restaurants operating out of the same kitchen. In some cases, the locations where the ghost kitchens operate are delivery-only facilities.
Yet, picking up an order from a ghost kitchen involves the same steps as any other delivery. You may even find that you occasionally pick up orders for multiple brands from a single location, which saves you time.