Ghost kitchens are a growing front in the food-delivery wars

The death of the American mall and the rise of the food-delivery app have created some tasty opportunities.


February 2, 2020

The next delivery burger you order might be served up by a ghost — a ghost kitchen, that is. 

Real-estate developers are buying space in empty malls and renting trailers in parking lots. They’re transforming them into mobile kitchens to get a taste of the booming delivery biz.

In some cases, the kitchens prepare food from brick-and-mortar establishments. In others, the “restaurants” (like the blandly named Burger Bytes) exist only online.

It’s like a 2-trend sandwich

The death of the American mall and the rise of the food-delivery app have created some mouth-watering opportunities:

  • Delivery accounts for 9% of the $282B fast-food sector in the US.
  • Those sales are growing faster than drive-through and dine-in.

Some of the most prominent players in ghost kitchens include CloudKitchens (from former Uber CEO Travis Kalanick), Miami’s Reef Technology, and Pasadena-based Kitchen United.

The companies say they can build filet-grade kitchen space at ground-chuck prices. CloudKitchens says a 230-square-foot site can be built in two weeks for $30k, while a 3.5k-square-foot restaurant can cost $1m to outfit.

But some restaurants don’t like what’s on the menu

Last week, we reported on a ghostly controversy in San Francisco, where a chef exposed fake delivery pages that had been generated for her non-delivering restaurant.

This week, the New York City Council is scheduled to hold a hearing on ghost kitchens and their impact on small businesses.

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