Ghost Franchises on the Rise
You’ve heard of ghost kitchens, where independent brands rent out space from existing brick-and-mortar locations. They save a lot of time and money, not having to build a suitable dining floor or hire front of house workers. Instead, customers get delivery and sometimes takeout services. The brands put all their focus into these off-premise channels which have been useful as a sales tool during this pandemic. Now these one-off restaurants are upping their game: Introducing ghost franchises.
As you might expect, these are ghost restaurants that have opened small chains throughout the country. They typically have condensed menus—say, only burgers and fries. This provides a golden opportunity for both the ghost franchise owner as well as pre-existing restaurant spaces who need some extra money during difficult times.
How do ghost franchises work?
You may wonder how they generate sufficient revenue without an expansive menu. Although they may not make as many sales by limiting their ordering channels as well as their dishes, this does allow ghost franchises to perfect their craft.
Meanwhile the kitchens they rent out also benefit from this arrangement. They get some of the revenue generated by the ghost franchises’s name, logo, recipes and brand recognition. The ghost franchise saves on kitchen maintenance by renting the space; everybody wins.
Additionally, this saves both brands the danger of trying to launch a new business in a global pandemic. The liabilities inherent in opening new revenue streams aren’t worth it for a lot of restaurants looking to scale. Thus, this is a safer way for independent restaurants to expand their menu and offer something new to customers in the area. Ghost franchises don’t have to shell out for a chain of brick-and-mortar stores.
Foot traffic has slowed down around the world as we all wait for full capacity restrictions to lift with ongoing vaccine rollouts. Ghost franchise partnerships could be the solution everyone needs to survive the final phases of COVID-19.
A More Successful Venture
If you’re thinking about opening a ghost kitchen for the first time, start small. No ghost franchise was built in a day. Instead, learn the ropes with one location first and then think about expanding your relationships. You don’t have to limit yourself to one: Partner with Red Robin in Chicago, Denny’s in Miami, Cheesecake Factory in Los Angeles. The possibilities are endless and you can even run multiple franchises at once—say, selling wings under one name and burgers under another to double your profit and expand your reach. Ghost kitchens make it not just possible, but easy.
Visibility is key to success. Use third party apps just like regular restaurants to immediately connect with a wide marketplace of potential new customers, without finding or hiring couriers yourself. It saves money and exposes you to people who just might become your most loyal guests.
Then, pick a staple food that’s easy to make and guaranteed to turn a profit. Things like pizza or tacos are always a safe bet. Turn a profit satisfying a very particular niche while also padding the bottom line of whomever you’re renting from.