Ghost kitchens, dark kitchens, cloud restaurants, virtual restaurants… Depending on who you’re talking to you might get into a discussion over semantics, but the terms are often used interchangeably to describe businesses that prepare food solely for delivery-only brands, offering no brick-and-mortar location for dining in. In the current restaurant industry reality of increased online orders/food delivery and limited capacities for dining in, this digital-driven business model has found space to flourish.
So what is a restaurant to do if they want to capitalize on the trend? Sure, they could go at it alone, but nowadays there’s another option. Cue The Local Culinary, one of the first ghost kitchen franchises out there.
Applying his restaurant industry experience to the rising demand for ghost kitchens, Alp Franko founded The Local Culinary, a ghost kitchen concept in Florida, in May 2019. Then, in July of this year, he expanded into franchising. The Local Culinary franchise model aims to help restaurants create extra revenue by adding virtual restaurants to their kitchens from its list of profit-driven brands.
“When COVID started, it was heartbreaking to see the restaurant industry devastated, as it was already a suffering market due to higher competition and costs,” he says. “I knew I wanted to help, and soon realized that my business model could be replicated in any restaurant without increasing its costs.”
The Local Culinary currently offers 50 virtual restaurant brands for franchisees to choose from, including Chef Burger, Taco Loco, and Yoko Bowl. These restaurants are available for delivery on Postmates, UberEats, DoorDash, and Grubhub GRUB .
Franko says the whole onboarding process for franchisees takes just around 10 to 20 days. This includes The Local Culinary training the franchisee’s team, setting up and optimizing their kitchen if necessary, providing the tablets for orders, and organizing the market list and packaging.
“Franchising makes a lot of sense with ghost kitchens, since practically any restaurant can host a ghost kitchen to make an additional source of revenue without increasing costs,” Franko says. “Due to the nature of ghost kitchens, restaurants are not having to create a whole new business, but instead they are building off of what they already have. If independent restaurants can optimize their kitchen space to bring in extra revenue it is a win-win situation.”
The Local Culinary is quickly making its way across the U.S. According to Franko, they have four locations open in Florida, three in the San Francisco Bay area, and a few in Louisiana—and they are under contract for three locations in New York and two in Chicago.
So how much does it all cost? Franko says it’s $50,000 for a restaurant to join The Local Culinary franchise plus a monthly fee of 7% of The Local Culinary brands’ gross revenue.
One restaurant owner who has found success with The Local Culinary amid the pandemic is Richard Leteurtre, the chef and owner of Bistro 1902 in Hollywood, Florida.
After closing his restaurant in March due to COVID-19, Leteurtre reopened in May with The Local Culinary’s ghost kitchen franchise model. “A friend of mine talked to me about The Local Culinary, and I found the idea exciting, innovative, and low-risk,” he says. “I realized that it could solve most of my problems.”
Leteurtre worked with The Local Culinary to choose which brands to bring to his kitchen. He explains, “The selection was a mix of my local market knowledge and The Local Culinary’s knowledge of their brand. They know what brands to combine to be more effective and profitable.”
Leteurtre currently has 16 virtual restaurants and plans to add five to eight more brands in the coming month. He says The Local Culinary represents 20% of his turnover and that that number is increasing monthly.
“The restaurant industry is suffering and has suffered for a long time. The pandemic has made it worse by creating incredible losses and changing consumer behavior,” Franko says. “At this point in time, many people feel safer eating at home and this behavior is not expected to change any time soon. The Local Culinary helps solve the problems that many restaurants are facing today by creating additional revenue without increasing their costs and supporting restaurants’ survival for the long run.”
While the union of ghost kitchens and franchising is still fresh, The Local Culinary isn’t alone in the field. Combo Kitchen was also founded this year and similarly offers restaurant owners the chance to add a Combo Kitchen fast-casual concept to their existing operation.
With Euromonitor saying ghost kitchens could be a $1 trillion global opportunity by 2030, it seems like it’s only a matter of time before more ghost kitchen franchise opportunities pop up in response to the pandemic’s ripple effects.
Source: Forbes – Business