How To Start A Ghost Kitchen From Home - Street Food Central (2022)

Check out this step by step guide on how to start a ghost kitchen from home

How To Start A Ghost Kitchen From Home - Street Food Central (1)

The commercial food market has been going through a number of shifts in recent years to meet consumer demand and structural shifts as a result of the covid pandemic of 2020.

One of the changes is an increase in online delivery, which has given rise to what is known as “Ghost kitchens” or “Virtual kitchens”. This type of commercial food business sells food through third-party food delivery apps such as Deliveroo & Uber Eats as opposed to having a customer-facing food outlet.

This way of doing business has also made it easier for people to start their own ghost kitchen not only in commercial kitchens but also from home, by cutting costs and generally lowering the barrier to entry.

So if you landed on this article and want to know how to start a ghost kitchen from home read on for a step by step guide.

What is a ghost kitchen?

A ghost kitchen, also known as a “Virtual Kitchen”, “Dark Kitchen” or “Cloud Kitchen” are remote commercial kitchens that operate online and sell to the public through food delivery apps such as Uber eats, Deliveroo and just eats, as opposed to public-facing food outlets.

Borough Market

Borough Market

Ghost or Virtual kitchens have been growing in popularity in recent years, especially since the Covid pandemic of 2020 where businesses and individuals alike have had to adapt to the challenges of lockdowns. According to Statista theglobal market size of ghost kitchens in 2019was valued at over $40 billion, which, CNBC states could increase to a $1 trillion global market by 2030.

The Pros and cons of ghost kitchens

(Video) Cloud Kitchen Business Model | Faasos by Rebel Foods Case Study

Like any type of business venture, there are numerous pros and cons to ghost kitchens as a business model.

Pros

Low start-up costs

Ghost kitchens don’t have the additional costs that come with physical food outlets, such as signage, interior design and fittings etc. Even for relatively low start-up ventures like food trucks, you still need to buy the catering unit you operate from.

All you really need is a large domestic or commercial kitchen, storage space and the right cooking equipment for a food delivery operation.

Lower operating costs

This applies especially if you start a ghost kitchen from home because you don’t need to pay the high running costs associated with customer-facing food outlets such as rents or utility bills.

Moreover, if you are running your ghost kitchen delivery service from home you don’t even need to pay the rent on pop-up commercial kitchens.

Existing infrastructure

When you sell through third-party food delivery apps such as Deliveroo or Uber Eats you are tapping into their existing ecosystem with thousands of people ordering each day. This means you don’t have to spend time or money marketing to reach new customers.

Third parties deal with the delivery

In addition to having a ready-made client base, third party apps also have the capacity to fulfil the orders, which means you can just focus on creating good food without the headache of logistics.

Quick & inexpensive way to test a concept

Starting a ghost kitchen from home is a relatively quick and inexpensive business model, which means it’s easy to test a new food concept without all the risks associated with starting a physical food outlet.

This also means because you don’t need so much equipment you can quickly get up and running, making those deliveries.

Cons

Paying a commission

(Video) Ye Kaisi Biryani Hai ? 😱😱 #shorts #trending

When you sell food through third-party delivery apps, like Uber Eats or Deliveroo you have to pay a commission which will eat into your profits. Commission for selling and handing the deliveries range from 14% per order, plus a fixed 50p for Just Eats to around 20-25% commission for Deliveroo.

Not in control of customer data

Third-party food delivery platforms deal with all the orders and have control of the customer-generated data. It’s therefore, harder for businesses that sell on these platforms to gain insights and make business decisions based on consumer behaviour.

Hard to build customer rapport

Not having access to customer data also makes it harder to connect with them through things like email marketing, thus making it hard to build rapport.

Competition

Unlike a high street where there are a handful of other food outlets, businesses that operate through third-party apps will be competing with hundreds of other food businesses in one place.

This can make it harder to stand out, especially if you are new, or if you sell a type of cuisine that many other companies are already doing.

Can you operate a ghost kitchen from home?

According to the Food Standards Agency, you can start a ghost kitchen from home as long as you register as a food business; register as self-employed; have the correct food training and certification, and keep a record of all the suppliers that provide you with any food ingredients.

There are a few more things that are required which we will go into in more detail in the next section.

How to start a ghost kitchen from home

Step 1 – Choose a niche

First up you want to decide what food you want to sell. Try and choose a particular niche and stick to it, as this will help with your brand identity.

You also want to strike a balance between a food niche that has not been overdone (think pizzas and burgers) but not too obscure that people don’t really know what you are selling.

Related articles:

  • 7 Most Profitable Food Truck Items
  • 28 Food Truck Menu Ideas 2021
  • Best Packaging For Hot Food Delivery

Step 2 – Market research

(Video) Hotel Hell: Gordon Ramsay Visits James Corden's B&B

Another part of the process when choosing what food you want to sell is market research.

There are a number of ways to find out food trends that include subscribing to statistical websites to access the data and keeping an eye on food outlets & food trucks to see which ones are popular and what new types of foods are coming to market.

For example, Vietnamese food, which I would argue has been underserved previously is now becoming a popular cuisine in the UK.

Step 3 – Optimise for delivery

Remember, ghost kitchens are all about food delivery so It’s also a good idea to pick food that can easily be cooked in bulk and delivered. Dishes like curries and rice can be cooked in big pans and kept at the correct serving temperature which makes the timing of delivery easier than cooking chips and burgers.

Step 4 – Business name & Branding

Once you have chosen your niche, you now have a concept which means it needs a business name and branding to convey what you are about to your customers.

Try and choose a business name that has the food you sell in the name and is three words or less (think V’s Vietnamese).

Related article:

  • How To Name Your Food Truck
  • Best Packaging For Hot Food Delivery
  • What Food Has The Highest Profit Margin?

Step 5 – equipment

The type of food you sell will dictate what equipment you need, so once you’ve decided on your niche you can start buying catering equipment.

If you want to keep costs low I recommend buying second-hand. There are a number of websites such as eBay and Gumtree, in addition to Facebook groups that have a wide range of second-hand catering equipment.

Related article:

  • Where To Buy Used Food Truck Equipment

Step 6 – Storage and space

When starting a ghost kitchen from home space may be limited which means you need to make sure you have enough room for the catering equipment and surface area to prepare and package the food.

You also need adequate refrigeration and storage space for your stock and packaging. If you don’t have enough space at home you can adopt a hybrid model whereby you have a separate storage facility for stock and you do the cooking at home or vice versa. Pop-up commercial kitchens can be rented for as little as £20 per hour.

Step 7 – Packaging

(Video) CHICKEN SHAWARMA ROLL | WORLD FAMOUS CHICKEN RECIPE street food

You need to choose packaging that is suitable for hot food delivery that provides heat insulation and regulates temperature.

You also want to make sure you go for packaging made from sustainable sources such as compostable or biodegradable containers

Related article:

  • 6 Best Suppliers Of Biodegradable packaging

Step 8 – Operating legally

Before you start serving food to the public you need to make sure you have the right insurance, training and certificates in place.

The Food Standards Agency has put together a very useful guide on what you need to start a ghost kitchen from home legally.

Here is a summary:

  • Register as a food business – This should be done 28 days before opening
  • Register as self-employed – Notify HMRC of the change in your employment status
  • Permission to trade from home – Get permission from mortgage provider or landlord to sell food from home
  • Risk assessment – Document the risks associated with your businesses (burns, trip hazards etc)
  • HACCP – Document the process of buying, storing, cooking and transporting foodstuffs
  • Food hygiene training – Whilst not compulsory it’s suggested to get relevant food hygiene training
  • Allergen management – Handle and manage food allergens effectively in food preparation and provide allergen information to your customers
  • Traceability – Keep a record of the supplier you source food from

Related article:

  • What Food Truck Catering License Do I Need For The UK?

Step 9 – Choosing a digital platform

Finally, you need to decide which food delivery platform you want to sell through. As previously mentioned the amount each company charges will differ so you will have to factor this into your operating costs.

However, cost shouldn’t be the only consideration as some of these apps have better marketing and are better known which means whilst they may charge more they have a larger customer base.

Key takeaways

The shift towards online food delivery shows no signs of slowing down, which means ghost kitchens will likely become more of a feature of this industry.

On balance, the pros of starting a ghost kitchen from home outweigh the cons. It’s a relatively low-cost venture to start in terms of the initial financial outlay and you can test your food concept quickly.

You also have access to a large ready-made customer base on food delivery apps that deal with all the logistics of getting the food from your kitchen to the customer.

A few things to bear in mind, however, is as delivery apps become more popular so will the number of other food outlets on them, which might make it harder to find a niche. The commission you pay can also be relatively high on some platforms.

FAQs

What is an example of a ghost kitchen? ›

A ghost kitchen, also known as a shared commercial kitchen or cloud kitchen, is a kitchen where food is prepared but not served. It may be shared by multiple restaurants and food trucks, or it may house only one ghost restaurant. One example of a ghost kitchen is Kitchen United.

How do you brand a ghost kitchen? ›

Focus on platforms with wide reach, like Facebook and Instagram. Spotlight your food through photos and videos. Emphasize your brand values and the quality of your food in your digital messaging. Social media marketing provides the easiest and most affordable means of marketing a ghost kitchen.

How does ghost kitchen work? ›

In a ghost kitchen, you're cooking in a delivery-optimized kitchen that's designed to cut unnecessary costs. Rent is low and efficiency is high. You have your own private commercial kitchen space within a delivery hub to cook up orders. It can be difficult to expand your traditional restaurant with high overhead costs.

Do ghost kitchens make money? ›

Depending on food costs and local KPIs, ghost kitchens can expect to become profitable within the first two years of operation. Using sales forecasts and average revenue, you can estimate how long it will take for your ghost kitchen to earn more than it costs to operate.

Are ghost kitchens successful? ›

Unlike traditional, brick-and-mortar restaurants, ghost kitchens lack an in-person dining area. Instead, they rely entirely on online orders and delivery to connect with customers. Thanks to low management costs and increases in online ordering, ghost kitchens have seen success in the modern world.

What is the difference between ghost kitchen and cloud kitchen? ›

Both ghost kitchens and virtual restaurants are restaurant concepts that don't have a brick-and-mortar dining experience. They exist solely online for delivery or pickup. Virtual restaurants (sometimes called cloud restaurants or delivery-only restaurants) are typically new brands that run out of existing kitchens.

What is a virtual kitchen concept? ›

A virtual kitchen, also commonly known as a ghost kitchen, is a restaurant that eliminates the eat-in option for diners and focuses purely on off-premise sales channels. A virtual kitchen operates as delivery only, with some offering takeout options.

Why do ghost kitchens fail? ›

By providing more options to their customers, ghost kitchens can make their food accessible to more consumers. And the biggest reason why they fail is that they are not profitable.

Why do cloud kitchens fail? ›

Lack Of Consistency. Inconsistency is often the primary reason why restaurants fail and shut down permanently. The competition in the cloud kitchen space is also rising as more restaurants are pivoting to online delivery models.

How big is the ghost kitchen industry? ›

And with that comes an industry that's estimated to grow to a net worth of $1 trillion. Now, more than ever, it's vital to adapt to the growing changes in market demand with the growing ghost kitchen trend, so your restaurant is future-proof.

Why is it called ghost kitchen? ›

Ghost kitchens are food prep operations with no waiters, no dining room and no parking lot – really, no public presence whatsoever. But on food delivery apps, they're alive and well. In short, ghost kitchens are physical spaces for operators to create food for off-premises consumption.

Why is ghost kitchen popular? ›

The appeal of a ghost kitchen, or virtual restaurant, is very obvious. By being able to cut operating costs, eliminate any issues relating to brick and mortar, and expand your customer reach, ghost kitchens have many benefits. Society has shifted, and delivery and takeout demand will continue to rise.

What is a virtual brand? ›

A virtual brand is a food or beverage business that utilizes a ghost kitchen to prepare its offerings. These goods are then delivered to customers, who never step into a dining room or traditional brick-and-mortar building.

What are the hottest food trends? ›

Plant-based 'meats' will continue to increase in popularity.

Meat alternatives are nothing new. Beyond Meat burgers and Impossible Burgers and such have been on home grills and menus for several years now. Major fast-food chains are trying out vegan nuggets. Pizza chains are trying out plant-based pepperoni.

What is the most popular food in the world? ›

Pizza is the topmost liked food in the world. Today you can find pizza in almost every corner of the world. This traditional Italian dish is made of flattened round dough topped with cheese, and tomatoes, and additionally garnished with basil, olives, and oregano.

Are we going to have a food shortage in 2022? ›

It looks like food shortages have continued into 2022. This is what might be causing the issue. After some signs of a slow and cautious return to pre-pandemic normalcy last year, 2022 is looking remarkably like fall 2020—and that means supply issues at grocery stores.

How does cloud kitchen make money? ›

What is the Revenue Model of Cloud Kitchens? Well, a cloud kitchen makes money much in the same way a typical kitchen would. The revenues generated from the sale of food less the costs of running the kitchen typically represents profits for the cloud kitchen.

What is a dark kitchen concept? ›

'Dark kitchen' is one of the phrases used to describe the concept of setting up a catering venue for the sole purpose of providing takeaways - as opposed to a restaurant or other catering facility that would serve food to patrons.

What are dark cloud kitchens? ›

Also known as virtual, remote, commissary, ghost kitchens or cloud kitchens, unlike a traditional restaurant, a dark kitchen is a professional commercial kitchen that only produces food for sale on delivery platforms.

What do you need for a virtual kitchen? ›

A virtual kitchen can be a stand-alone delivery and takeout-only or an off-premise support kitchen. It doesn't need dining furnishings, but in most cases, only cooking and packaging essentials. There are also cloud kitchen owners who prefer to share workspaces to reduce rent costs.

How do you create a virtual brand? ›

How to create a virtual brand in 5 steps
  1. Study the market.
  2. Choose your concept.
  3. Build your brand.
  4. Plan your operations.
  5. Prioritize marketing.
  6. ‍‍

What is the difference between ghost kitchen and cloud kitchen? ›

Both ghost kitchens and virtual restaurants are restaurant concepts that don't have a brick-and-mortar dining experience. They exist solely online for delivery or pickup. Virtual restaurants (sometimes called cloud restaurants or delivery-only restaurants) are typically new brands that run out of existing kitchens.

What are ghost or cloud kitchens? ›

What is a ghost kitchen? QSR describes it well: "Virtual—also called cloud or ghost—kitchens are stripped-down commercial cooking spaces with no dine-in option." They give restaurants all the resources they need to crank out more food (commercial equipment, dishwashers, cold storage, etc.) at a lower cost.

What is a dark kitchen concept? ›

'Dark kitchen' is one of the phrases used to describe the concept of setting up a catering venue for the sole purpose of providing takeaways - as opposed to a restaurant or other catering facility that would serve food to patrons.

What is a virtual kitchen concept? ›

A virtual kitchen, also commonly known as a ghost kitchen, is a restaurant that eliminates the eat-in option for diners and focuses purely on off-premise sales channels. A virtual kitchen operates as delivery only, with some offering takeout options.

How does cloud kitchen make money? ›

What is the Revenue Model of Cloud Kitchens? Well, a cloud kitchen makes money much in the same way a typical kitchen would. The revenues generated from the sale of food less the costs of running the kitchen typically represents profits for the cloud kitchen.

How do shared kitchens work? ›

Shared kitchens are licensed commercial spaces that provide a pathway for food entrepreneurs—ranging from chefs, caterers, food truck operators, and bakers, to value-added producers and packaged food and beverage makers—to launch and grow their businesses.

What is Ghost in food? ›

The term ghost kitchen categorizes foodservice businesses without dining areas that offer delivery and, occasionally, takeout. Sometimes referred to as ghost restaurants, virtual kitchens, or satellite kitchens, ghost kitchens use third-party delivery services to receive orders and get meals to customers.

What is a satellite kitchen? ›

Satellite kitchen is a food service establishment where food is stored, prepared, portioned or packaged for service elsewhere. It is different from the central kitchen as it is created to specifically cater to 1 outlet when the central kitchen cannot do so due to geographical disadvantages.

Is it profitable to start a cloud kitchen? ›

cloud kitchens can be very profitable (pay attention to that 'can' there), and; cloud kitchen operations are much easier to scale than dine-in operations.

What is Swiggy kitchen? ›

Swiggy's first cloud kitchen vertical Swiggy Access offered plug-and-play kitchens to partner restaurants to help them expand to new localities and cities. It later rolled out a new brand called BrandWorks, which partnered with fine dining restaurants to co-create delivery-only brands and menus.

What is the difference between a dark kitchen and a ghost kitchen? ›

One concept, various names: Cloud kitchens, virtual kitchens, ghost kitchens, delivery-only, or dark kitchens – these are different names for the same thing. Whichever way you choose to call it, a dark kitchen uses the same business model i.e. sells made-to-order food or meals via delivery for online orders received.

What is a delivery kitchen? ›

Delivery Kitchens, also known as Ghost Kitchens, Cloud Kitchens, Dark Kitchens, and Virtual Kitchens, are purpose-built for one reason only, to allow restaurants to produce food just for delivery.

What do you need for a virtual kitchen? ›

A virtual kitchen can be a stand-alone delivery and takeout-only or an off-premise support kitchen. It doesn't need dining furnishings, but in most cases, only cooking and packaging essentials. There are also cloud kitchen owners who prefer to share workspaces to reduce rent costs.

What is a virtual food brand? ›

Virtual brands are restaurants that exist only on third-party delivery apps. Their creators use existing restaurant kitchens to whip up orders from a menu that was designed for off-premise customers. Pizza, chicken wings and burgers are popular because those foods travel well.

How do you create a virtual brand? ›

How to create a virtual brand in 5 steps
  1. Study the market.
  2. Choose your concept.
  3. Build your brand.
  4. Plan your operations.
  5. Prioritize marketing.
  6. ‍‍

Videos

1. The Ultimate DUBAI FOOD TOUR - Street Food and Emirati Cuisine in Dubai, UAE!
(Mark Wiens)
2. 💥🤯 வீட்டு-ல Food Review Panirukeengala 🎉💢⁉️ | #shorts #peppafoodie
(Peppa Foodie)
3. Manda Roti Making | Street Roll and Samosa Patti - Dough Machine Modern Food Processing Technology
(Rashida Hussain)
4. Chicken White Karahi Recipe By Food Fusion
(Food Fusion)
5. LEGENDARY Bhel Puri of North Campus🤩🤩 #bhelpuri #streetfood #delhiuniversity #shorts
(Foodie Incarnate)
6. World Smallest Gulab Jamun Rs. 5/- Only😱 #jammufood #shorts
(INDIA EAT MANIA)

Top Articles

Latest Posts

Article information

Author: Kelle Weber

Last Updated: 11/18/2022

Views: 6286

Rating: 4.2 / 5 (73 voted)

Reviews: 88% of readers found this page helpful

Author information

Name: Kelle Weber

Birthday: 2000-08-05

Address: 6796 Juan Square, Markfort, MN 58988

Phone: +8215934114615

Job: Hospitality Director

Hobby: tabletop games, Foreign language learning, Leather crafting, Horseback riding, Swimming, Knapping, Handball

Introduction: My name is Kelle Weber, I am a magnificent, enchanting, fair, joyous, light, determined, joyous person who loves writing and wants to share my knowledge and understanding with you.