Inside a New York City 'ghost kitchen,' where 6 delivery-only restaurants share fridges, dishwashers, and counter space

Business Insider | 2/14/2020 | Kevin Reilly, Mark Abadi
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Ghost kitchens are a new type of restaurant model in which several restaurants share a kitchen and many of the operating costs.

These restaurants are delivery-only and rely on apps like Uber Eats and Grubhub.

Ghost - Kitchen - Opportunities - €? - Challenges

We toured a ghost kitchen and found out why it's creating opportunities — and challenges — for the food industry.

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This pizza is made by a restaurant that no one can eat at.

Same - Sandwich - Salad

Same with this sandwich and this salad.

It's a new type of business model called a "ghost kitchen," a shared space for restaurants with no traditional storefronts or dining room.

Apps - Uber - Eats - Grubhub

Instead, they're delivery-only, relying on apps like Uber Eats and Grubhub.

Enrique Mendez, cofounder of Stone Bridge Pizza & Salad: "The way people are finding food is no longer physical. It's not by walking around and seeing the restaurant. A lot of people find restaurants online or in the virtual world."

Year - Americans - Order - Food

Last year, one in four Americans used apps to order food. And by 2025, online ordering could bring in more than $200 billion globally.

It has created both an opportunity and challenges for the food industry.

Mendez - Cost - Services - Volume - Profits

Mendez: "The cost of those ancillary services is so high that even though they're helping you get to a certain volume, they're not necessarily helping with profits."

Food apps take a percentage of each order they service — sometimes up to 30%, plus processing fees for credit card orders.

Restaurants - Thin - Margins

That can be overwhelming for restaurants that already operate on thin margins.

Zuul Kitchens opened last year as a way for restaurants to share costs and make the most out of these third-party apps.

Idea - WeWork - Kitchens

The idea is like a WeWork for kitchens.

And it works like this: Kitchens receive orders from a variety of online...
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