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When Hady Kfoury was approached about opening a ghost kitchen in the summer of 2019, he didn’t know what a ghost kitchen was.
Since 2008, Kfoury had successfully grown his Lebanese restaurant Naya from one location in midtown Manhattan to seven. He was approached by ghost kitchen operator Zuul, a 5,000-square-foot space in Soho launched in September 2019 with ten separate kitchens, each dedicated to pumping out orders for delivery-only outposts of New York restaurants.
Zuul presented the opportunity for Kfoury to expand into Soho, a section of the New York market beyond Naya’s delivery reach, at a fraction of the start-up cost for a new restaurant.
At the end of December, Kfoury launched Naya’s ghost kitchen for about $50,000 in startup costs, rather than $1 million he estimates he’d need to open a new full-service restaurant. And his rent was just a third as much as rent at his most expensive location ($33,000 on Madison and 52nd Street).
His timing was on point. The pandemic has accelerated a simmering trend in restaurants: delivery as the primary source of revenue. While COVID-19 has reduced most of Naya’s sales to 30% of the previous year, Kfoury is happy with the ghost kitchen. Though forced to close from March until June, it’s currently doing about 200 orders a day.
Business Insider talked to Kfoury and others to learn these five critical steps to a successful ghost kitchen operation.
Ghost kitchens are harder for first-timers
“If you don’t have a solid brand, there’s a lot of risk involved,” said Kfoury.
For example, in early 2019, Kfoury sublet one of his brick and mortar kitchens to a friend, a former fast-casual dining CFO who wanted to try a ghost restaurant for his exclusively late-night, sauce-driven chicken concept. Despite zero start-up costs, and a serious attempt, including marketing, photoshoots, and influencers, the CFO gave up after two months.
“It’s much easier for a brand that already has some recognition.”
Kfoury, who turned down an offer to establish a ghost kitchen in Philadelphia, also cautions against moving too far beyond your market.
“I don’t have brand recognition in Philly. We have one store, but we’re not solid enough to be there.”
The key is to know how firm your reputation is and how much demand will be within the potential ghost kitchen delivery radius.
Read more: Ghost kitchens are pitching themselves as the future of restaurants. These are the 15 …read more
Source:: Business Insider