While the ghost kitchen concept is getting plenty of well-deserved press right now, there is one aspect that we believe is worth noting, but which is not yet being discussed: ghost kitchen mergers & acquisitions.
Ghost kitchens offer a unique combination of relatively low upfront investment and great flexibility. A ghost kitchen can be launched by an existing restaurant (witness Chuck-E-Cheese, Brinker, Wendy’s & Chik-fil-A) or grocery store (mainly the deli). It also be launched locally or regionally by partnering with an existing restaurant or grocery that has excess capacity in their kitchen. In either case, the brand can quickly become very valuable.
The challenge for a local or regional ghost kitchen is finding a way to continue that expansion without having to buy real estate and equipment. If a ghost kitchen has more demand than the “host kitchen”, they are limited.
At the same time, some larger regional or national chains may be looking for ways to grow. Instead of trying to develop their own ghost kitchens, it makes a lot of sense for them to acquire an existing, successful local or regional ghost kitchen and, almost overnight, dramatically expand it’s geographic footprint.
Of course, some entrepreneurs are very, very good at developing new concepts. They may be less good (or less interested) in operating them. Again, this is a perfect formula for acquisitions. Someone tests multiple concepts, finds one that works, and then sells it off to a national operator who can grow it from there…and the entrepreneur gets a nice payday and begins the process over again! Everybody wins.