As a CPA working with restaurant clients, I recently had a concerning experience with Ghost Kitchens, a company offering shared kitchen spaces for restaurants to operate delivery-only setups.
The premise itself seems decent – renting affordable kitchen spaces in industrial areas specifically geared towards food delivery operations without the overhead of a traditional storefront. However, Ghost Kitchens’ contract terms raised major red flags.
Not only do they require monthly rental fees for the kitchen space (which is fair), but they also mandate that ALL orders go through their proprietary app AND charge an additional 2% commission on every sale!
This tacked-on commission is extremely problematic for a few reasons:
Restaurants are already paying exorbitant fees to third-party delivery apps like DoorDash and Uber Eats, often 20-30% of each order. Adding another 2% fee is severely cutting into already-thin profit margins.
The value proposition is questionable at best. What exactly are they providing beyond kitchen real estate to justify this added commission? Certainly not customer data or robust marketing.
It defeats the entire purpose of these delivery-centric ghost kitchens, which is affordability by avoiding traditional storefront costs. The economics get worse than a regular restaurant!
You’re further removing control and data ownership from restaurants by essentiallySubContracting orders through yet another third-party platform.
Unless Ghost Kitchens revises their greedy commission structure, I cannot reasonably recommend any restaurant clients to work with them. Their practices seem exploitative rather than mutually beneficial.
There may be alternatives in this ghost kitchen space worth exploring, but fair commission policies that respect the economics of the restaurant business need to be non-negotiable for operators.
