It is worth mentioning that while virtual restaurant concepts and online ordering/delivery platforms are a match made in low-overhead heaven, they're not without their pitfalls: Maple, David Chang's New York City-based all-in-one virtual restaurant and delivery app, lost money on every meal in 2015 and decided to close their virtual doors in 2017; a variety of the "brands” Green Summit Group has tested failed or have very low ratings on GrubHub. At the end of the day, no matter how enticing low overhead may be to ambitious souls looking to start a restaurant, it can't be ignored that our industry is one of the riskiest in the game, where 26% of new restaurants fail within the first year.

The Restaurant Delivery Marketplace in 2019

Restaurant delivery isn’t a fad. According to a Statista survey, 70% of consumers order food delivery from quick-service restaurants and 44% of consumers order food delivery at least once a month.

Platforms like Chowly have grown out of restaurants' need for streamlined, robust, online ordering platforms that seamlessly sync third-party online ordering platforms with their restaurant POS system and kitchen display system. Companies like UberEats, Grubhub, DoorDash, and Postmates have emerged on the scene to shoulder restaurants' delivery in exchange for a percentage of each order's total. And other restaurant technology players like Toast online ordering offer white-label online ordering services for consumers to order from a restaurant’s branded website. With so many options, it’s clear restaurants can create a customized approach to the delivery trend.

By 2030, the restaurant industry's online ordering and food delivery arm is expected to eclipse $365 billion worldwide according to UBS, further reinforcing the market's preference for on-demand, convenient dining experiences where technology is masterfully intertwined in every step of the process. In fact, the report predicts the end of consumer kitchens, thanks to the wider availability and appeal of food delivery services.

How to Test the Cloud Kitchen Concept at Your Restaurant

The ghost kitchen model is a worthwhile option for the following types of restaurant owners:

First-time owners with passion and great ideas, but little experience operating a business (e.g. farmers market vendors, pop-up concepts)

Successful food truck owners

Existing restaurant owners with a successful concept and takeout revenue stream

Existing restaurant owners with a successful concept and takeout revenue stream who are looking to expand but aren't sure if they can sustain the operational costs associated with opening a second location.

Geography could also make pursuing a ghost kitchen model enticing: Rent prices continue to skyrocket in major metros like New York City, Boston, and San Francisco, threatening the health of existing restaurants and making the real estate costs associated with opening a second location impossible to shoulder for many would-be and existing restaurateurs.

Want to get your feet wet and see if the ghost kitchen model is a sustainable option for your restaurant, without completely overhauling your existing operations? Try shutting down in-house meal service one night a week for a month and only fulfill phone or online orders. Advertise this shift across all of your marketing channels and offer deals for participation; for existing customers, offer rewards via your customer loyalty program to entice their participation. Let them know that this is just a test, and that your restaurant will be resuming regularly scheduled programming the next month.

Performing this test for an entire month will give you a statistically significant data set to analyze and use in making an informed decision to either continue or shutter your pursuit of a ghost kitchen model. In order to discern whether this test was a success, you'll first need to know the following three restaurant metrics to have as a control in your experiment:

Your restaurant's break-even point (this needs to be positive)

Your restaurant's prime cost (want this to be lower)

Your restaurant's average profitability (as a percent)

After conducting your ghost kitchen test, it's time to dig into your data. You'll want to calculate the above three metrics for the four days you ran the test and on a week by week level and then compare them against the control metrics.

The Future of Dining is Delivery

The cloud kitchen concept isn't for everyone, but leveraging the power of online ordering and delivery is. If your restaurant does not currently offer online ordering for guests, there are a variety of companies who create robust online ordering or mobile ordering solutions for restaurants so you don't have to. The online ordering arm of the restaurant industry is expected to surpass $76 billion in the next five years; don't let the opportunity to cut yourself a slice of the billion-dollar pie pass you by.