What Are Ghost Kitchens, and Why Are They So Scary for Some Restaurants?

You might think ghost kitchens are a result of the global pandemic that shuttered restaurants across the country. You'd be wrong.

So what do you know about ghost kitchens? No, they aren't the next horror movie franchise coming your way. In fact, you may have ordered from one today and not even realized it if you're someone who's frequented food delivery apps during the pandemic.

Here are five things to know:

What Is a Ghost Kitchen?

A ghost kitchen (also known as a delivery-only restaurant or virtual kitchen) is a professional food and cooking facility set up for the preparation of delivery-only meals. They do not have a storefront or indoor seating for customers.

How Long Have Ghost Kitchens Operated?

You might think ghost kitchens are a result of the global pandemic that shuttered restaurants across the country. You'd be wrong. The term was first used in a 2015 NBC New York article that was critical of ghost kitchens after an investigative team caught New York City restaurant owners listing their business under multiple different brands on delivery apps such as Seamless and GrubHub. 

What Do They Mean for the Consumer?

Jorge Sanchez, a chef and culinary instructor, tells NBCLX that ghost or virtual kitchens help an existing food operation create delivery favorites without the traditional overhead. Multiple food options are sold and delivered from a single location sometimes with as few as three employees on site. "People are interested in healthier, fresher ethnic choices. And a customer would never know that this came out of an operator that is producing many other brands at the same time," Sanchez said.

Are They Good for Small Business Owners?

While the consumer may not know (or care) that they're ordering from a ghost kitchen, the same can't be said from the traditional brick-and-mortar mom-and-pop restaurants that may be missing out on your business. Juan Carlos Restrepo, owner and proprietor of Happy Wine in Little Havana, Miami, specializes in wine but also serves small dishes like tapas and other small sandwiches. Restrepo told NBCLX that he was forced into the food delivery model to survive after the pandemic hit. Now that COVID-19 restrictions are being lifted, he's concerned ghost kitchens will rip into his bottom line.

"The problem is it has become like a monopoly from companies like Uber Eats or Doordash because they've taken over the other competitors and the monopoly is going to create negative effects on the independent restaurants because they will raise commission fees. It will affect us and the customer too," he told NBCLX.

Are the Monoply Claims Legit?

Last year a class-action lawsuit was filed in New York's Southern District alleging companies like Doordash and Uber Eats have maintained monopoly power giving consumers and restaurants "little choice but to do business with them." NBCLX reached out to many of the delivery app brands for a response. A spokesperson for Uber Eats responded, "We do not own or operate any ghost kitchens or delivery-only facilities. We appreciate the business of every restaurant who chooses to partner with Uber Eats."