Area‘s ghost kitchens’ prosper by appearing and disappearing
By Abigail Knapp
Special The Business Times
On a recent Wednesday, six food trucks circled up for a weekly “food truck rally” in San Luis Obispo, serving lunch-goers from the back lot of The Kitchen Terminal, a commercial kitchen.
“People love getting different types of food in one walk,” said the Kitchen Terminal co-founder Sunita Singh. “It’s like a new version of the food court in a mall. We don’t charge the food trucks anything, because they’re our clients.”
Singh and partner Daniella Davis started the Kitchen Terminal in 2014, a kitchen-sharing company for food entrepreneurs looking to lease cooking spaces and grow a business. Since then, they’ve expanded their offering, building, licensing and renting kitchens. In addition to San Luis Obispo, they lease five kitchens in Redondo Beach and three in Ventura County. Contracts are done on a sliding scale, but typically require a monthly commitment and an hourly minimum per month. Since the pandemic forced restaurants to stop serving, the need for speedy, tasty, delivered meals and novelty pop-up food–including dinners for pets–has never been stronger.
With 11 food trucks and four commercial kitchens ranging from 200 – 400 square meters ready for lease in San Luis Obispo, the food truck rally is just one of several activities planned by Singh and her team to support small entrepreneurs.
“With us you can trial base your business and spend $800 a month and just try it out,” said Singh. “There’s no big upfront investment. And if you have a strong social media following, you could sell pre-ordered fried chicken sandwiches on weekends from 11-2 p.m. It gives people an opportunity to do something fun.”
But the Kitchen Terminal offers more than just space to cook and bake. They also help food entrepreneurs with logistics and marketing. Most referrals come from county health departments. This evolving business model ––providing food entrepreneurs with cooking space and logistics services– has also taken off since the pandemic.
“We help our clients navigate the business world,” said Singh. “We give them business advice and social media advice and help them with marketing; we’re an incubator and we do more than nurture them.”
For decades, churches and community centers rented out commissary kitchens to the public without the help of digital technology. Thanks to food ordering and takeout software systems, like Uber Eats, and new booking platforms, like the Food Corridor, kitchen and restaurant owners can now diversify their business models to serve food entrepreneurs who need to cook and get their food out to the public for maybe just a weekend. In a sense, kitchens are having an Airbnb moment.
Some kitchens are now leased as “ghost kitchens,” where a food entrepreneur can book out an entire kitchen to sell ordered food for a long period of time. While others have invested in launching “virtual restaurants,” targeting restaurant kitchens in need of additional revenue who can prepare and sell separately branded food for takeout only. Celebrity Chef Guy Fieri launched FlavorTown Kitchen, a chain with more than 20 sites around the country, including Thousand Oaks, offering delivery only.
Such low-risk, low-capital innovations continue to grow, aided by new software platforms.
But ghost kitchens and virtual restaurants business models don’t work for all commercial kitchens, even with the right software.
“Kitchen operators have to be flexible about users and attract diverse businesses,” said kitchen-sharing expert Ashley Colpaart. “Delivery type food businesses pose unique challenges, because they need specific hours that are prime-time for ordering, largely in the evening during the dinner rush.”
In 2015, Colpaart founded Food Corridor, a software program to help kitchen operators with billing, storage, scheduling and rentals. Seeing the opportunity for kitchen-rental leads, she then founded Kitchen Door, a free listing website for kitchen-sharing. The website has over 1,000 kitchens listed in the US and Canada. In October, 36,000 users visited the site.
Like Singh, who is a client, Colpaart said nationwide kitchen-sharing has gained momentum since the pandemic.
“The kitchen tends to be an amplification of what’s happening in the local food system,” she said. “During COVID, we saw a steady rise month-over-month in the number of food businesses popping up. It was easy for people to get into a lot of new innovative ideas while taking advantage of the socioeconomic changes happening in society.”
In many respects, she said, renting a kitchen is comparable to owning a gym. There are issues with traffic flow, security, equipment, maintenance, safety and hygiene. And on top of it all, there’s room for new brands and experiences.
“This past year was the first time we saw multiple kitchens open second, third, fourth locations using our software,” said Colpaart. “This shows they are addressing the needs of the community, finding other spaces and replicating their model and brand.”