How Ghost Kitchens are Impacting the Quick Service Restaurant Industry

May 7, 2020

How Ghost Kitchens are Impacting the Quick Service Restaurant Industry

In the ever-evolving world of quick service restaurants, the growing demand for food delivery has led to an increase in ghost kitchens, which operate exclusively for delivery service. No servers, no tables, no chairs, just a kitchen in service of delivery orders. 

Third-Party Delivery Services

The cultural shift toward food delivery in lieu of takeout opened the door to third-party delivery services such as DoorDash, which currently holds 35 percent of the third-party delivery market overtaking GrubHub. Of course, third-party delivery services charge a fee for the delivery, as well as for the expanded reach. With an up to 30 percent fee for each delivery, third-party delivery apps make an already tight margin barely worth the added business for restaurant operations. Increases in rent for an optimal site selection plus increases in the costs of insurance and goods were already cutting into restaurant revenue. Delivery fees charged by third-party services contribute to the downward spiral when some restaurants even lose money on each delivery order. 

Ghost Kitchens Cut Costs

In response to the razor-thin margins resulting from high delivery fees, members of the restaurant industry adopted the ghost kitchen model, eliminating the need for a dining room, as well as for everything in a dining room, including china, cutlery, tablecloths, and tables. With only a kitchen space and a third-party app, a restaurateur can fulfill the needs of the online food ordering consumer. With third-party app representatives propositioning existing restaurants to branch out with a delivery-only addition to their current offerings, both the market and the delivery services are growing the options to fulfill the needs of consumers who can’t find the cuisine they want, according to searches on the delivery apps.

Technology Needs

Overcoming logistics and the technology required to run a delivery-only operation are challenges standing in the way of the ghost kitchen. From ordering accuracy to delivery radius, the relationship between the ghost kitchen and its partner delivery app can make or break a virtual kitchen operation. Leveraging the technology to reach the highest potential, as well as to not lose money despite demand, may be equally important as the food itself. Something as simple as accurately reflecting menu options on the delivery app can create miscommunications and flawed orders between the kitchen and consumer. If a ghost kitchen can successfully master its underlying technology, their delivery business is in a position to thrive.

Host Merchant Services: What Your Restaurant Needs in a Payment Processor

If your restaurant is adapting to the evolutions of the delivery world, Host Merchant Services can guide you in the next best steps for your success in a competitive market. Whether you need an entirely new point of sale system or a solution for your current system, HMS offers a suite of services to suit your restaurant’s needs. From wireless equipment, payment by check, recurring billing, to online payment gateways, HMS has everything a restaurant needs for serving customers in both traditional sit down establishments and catering services. 

Host Merchant Services provides customer support for restaurant credit card processing 24 hours a day, 7 days a week, 365 days a year. We know we need to work as much as you do to properly support an industry that can operate nearly 24 hours a day. That’s why we have operators standing by to answer your call any time of day.

HMS also explains how payment processing works. Providing a comprehensive package including credit card processing and financial transaction services to restaurants, we will custom design a flexible credit card processing solution to fit the needs of your restaurant.

And when we do demonstrate your payment processing scenario selections, HMS also offers your restaurant  several point of sale options, including Clover, Vital, Bonsai, SwipeSimple, and more to fit your specific operation. If your restaurant is already equipped with hardware, HMS provides an easy point of sale integration. 

With our low rate guarantee, HMS provides a Free Rate Analysis to show where you can save on your restaurant payment processing. If HMS can’t save your restaurant money, we will give you a $50 Gift Card. The best pricing model on the payment processing market, Interchange Plus Pricing will help your restaurant’s bottom line. 

Host Merchant Services will even provide your restaurant free equipment via our free equipment program to qualified merchants along with receipt paper at wholesale prices. We are your restaurant’s credit card processing solution. 


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