1851

Over the past two years of the COVID-19 pandemic, franchise chains have had to come up with <a href="https://1851franchise.com/why-full-service-restaurant-franchises-are-starting-to-look-more-like-qsrs-2714686">creative ways</a> to save on costs while keeping revenue up. One of the most popular strategies has been the widespread adoption of <a href="https://1851franchise.com/wendys-ghost-kitchen-strategy-could-revolutionize-the-modern-franchise-model-2716443">ghost kitchens</a> — physical locations designed to serve delivery-only concepts or serve as mobile order-only restaurants, with no storefronts or dining areas. Although the ghost kitchen phenomenon has been <a href="https://1851franchise.com/the-latest-advancement-in-ghost-kitchen-development-parking-garages-2711688">picking up steam</a> for a while, especially among <a href="https://www.prnewswire.com/news-releases/chipotle-announces-virtual-farmers-market-powered-by-shopify-301085587.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-state-of-ghost-kitchens-in-2022-2717902" target="_blank" rel="nofollow">QSR concepts</a> and <a href="https://1851franchise.com/ubereats-is-taking-the-lead-in-the-booming-virtual-restaurant-trend-2710836#most-recent">third-party delivery providers</a>, the pandemic significantly accelerated the trend. Now, heading into 2022, the ghost kitchen train shows no signs of slowing down.&nbsp;Ghost kitchens allow restaurants to secure market share at a lower cost of production by significantly bringing down rent and staffing costs. Franchisors are finding that all you really need is a kitchen, an online menu and a way to deliver food (usually through a delivery app). If done correctly, ghost kitchens can also reduce food delivery times and improve operational efficiency with the added volume delivery creates.&nbsp;And while some franchisors have decided to simply open ghost kitchens under their established brand names, many are choosing to start fresh with new brands — <a href="https://1851franchise.com/virtual-brands-boost-restaurant-revenues-30-50-expert-says-2715094">virtual concepts</a> — as a way to differentiate their offerings and diversify their franchisees’ portfolios. Plus, virtual brands are an easy way to expand a franchisor’s reach without necessarily needing to sign new franchise agreements.For the franchisee, virtual brands not only offer a way to increase the bottom line of their established restaurants, but also the opportunity to expand easily into new markets or diversify their consumer offering through multiple brands.1851 Franchise spoke with <a href="https://www.linkedin.com/in/al-hank?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-state-of-ghost-kitchens-in-2022-2717902" target="_blank" rel="nofollow">Al Hank</a>, <a href="https://www.bbq-holdings.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-state-of-ghost-kitchens-in-2022-2717902" target="_blank" rel="nofollow">BBQ Holdings Inc.</a>’s chief operating officer, to learn about the strategy behind barbeque concept <a href="https://www.famousdaves.com/FranchiseOpportunities?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-state-of-ghost-kitchens-in-2022-2717902" target="_blank" rel="nofollow">Famous Dave&#x2019;s*</a> successful ghost kitchen expansion and hear his opinions on the future of the trend in 2022.<h4>1851 Franchise: Can you tell me a bit about Famous Dave’s history with ghost kitchens?</h4>Al Hank: We first dabbled in ghost kitchens way back in 2018 when we launched a concept called Burgers and Sandwiches by Famous Dave’s. The thought process there was that Famous Dave’s was very well-known for barbecue, but we had a lot of other great menu items that weren’t being highlighted on third-party delivery platforms. At that time, there was a lot of data that showed people would primarily find food options through third-party delivery platforms’ different category sections, and Famous Dave’s was only showing up under the BBQ category. So we spun off a concept to make sure we showed up in other categories like burgers and sandwiches. We launched another concept called Hayward's Hen House to enter the chicken delivery segment in early 2020 and ran that for a little while.&nbsp;Now, our newest ghost kitchen concept is <a href="https://5dollarburgers.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-state-of-ghost-kitchens-in-2022-2717902" target="_blank" rel="nofollow">$5 Burgers</a>, which we launched a few months ago. We know that burgers sell really well, but it is an incredibly saturated market. If we can go in and make a concept based around value, especially in a third-party-delivery marketplace, we can stand out while enticing guests to build the check through sides, sodas, etc. If you can go into that market and tell a compelling story, you will generate interest, buzz and clicks.&nbsp;<h4>1851 Franchise: How would you describe the state of ghost kitchens in 2022?&nbsp;</h4>Hank: We still believe that ghost kitchens are just a piece of the restaurant business. Generally speaking, ghost kitchens have provided a lift in some locations that weren’t performing as well as they had in previous years. Especially with some of our dine-in-heavy brands like <a href="https://www.gcfb.com/company-info/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-state-of-ghost-kitchens-in-2022-2717902" target="_blank" rel="nofollow">Granite City Brewery</a>, operators saw sales impacted by COVID-19. Famous Dave’s, on the other hand, was already operating at 30% off-premise service, which has now grown to 55%. If you look at those types of brands, they have that infrastructure to grow, while other brands are struggling. So, in locations where we have identified the viability of a market, we are able to deploy Famous Dave’s ghost kitchens and add anywhere from $5,000 to $12,000 a week in revenue for franchisees, which is incremental because rent doesn’t go up with a ghost kitchen. It has been a very viable lever for us to pull from that perspective.&nbsp;Now, as we look to the future, ghost kitchens will allow us to affordably test the viability of a market. For example, we’ve been able to enter markets where there was at one time a Famous Dave’s brick-and-mortar location and reintroduce the brand back into the community through a ghost kitchen. The brand already has a strong following in the market, so we are able to go back in and test the viability of that market. This is even more valuable in brand-new markets where we can determine if a brick-and-mortar location makes sense. That is typically a multi-million-dollar test, and you never know what the outcome is going to be, but ghost kitchens allow you to do it in a much more cost-effective manner. That is why ghost kitchens will continue to play a role in our business model.<h4>1851 Franchise: Why are ghost kitchens well-positioned for the current industry landscape?</h4>Hank: Based on what we’ve seen in our business, off-premise has sustained its popularity over the past year. We’ve seen a slight drop off from mid-2020, but a lot of that growth has been sustained. The key component to making sure off-premise stays strong is having a really fluid ordering and pick-up experience. The synergy has to be there. If you can execute a positive and seamless experience for the consumer, they will want to re-engage over and over again. Off-premise is all about convenience.&nbsp;When you think about ghost kitchens, virtual concepts have also played a role. Are all virtual concepts going to sustain and make it? No. You’ve seen those come in and make a big splash, <a href="https://1851franchise.com/youtuber-mrbeasts-virtual-restaurant-brand-could-be-the-future-of-franchising-2715008">like MrBeastBurger</a>, but time will tell how long they stay successful. We believe that as long as the owner is continuing to promote the ghost kitchen and make it relevant, it will succeed. We’ve seen a lot of concepts sign on quite a few ghost kitchen units lately — it offers owners a way to increase top-line revenue, but only if the concept is viable. It has to be something that can operate successfully from the owner’s perspective. You can’t just innondate the back-of-house with a ton of new menu items, they have to be able to continue to maintain operations.<h4>1851 Franchise: Speaking of the owners, can new franchisees sign on with a Famous Dave’s ghost kitchen?</h4>Hank: We don’t take on franchisees from a ghost-kitchen-only perspective. We have about 20 franchise-operated ghost kitchens right now, all of which were with pre-existing Famous Dave’s operators who own other restaurants that they can operate the ghost kitchen out of. There is a lot that goes into Famous Dave’s, so we felt most comfortable executing this with current franchisees who already have the teams and knowledge in place. That creates a more successful environment. We’ve had inquiries about ghost kitchens with new franchisees, but for right now we are focused on existing Famous Dave’s franchisees.&nbsp;Photo credit: <a href="https://www.google.com/url?sa=i&amp%3Burl=https%3A%2F%2Fwww.sctimes.com%2Fstory%2Fmoney%2Fbusiness%2F2020%2F12%2F02%2Fghost-kitchen-concept-brings-famous-daves-back-st-cloud%2F3781749001%2F&amp%3Bpsig=AOvVaw2KHH5tpYqmF7P11iG3YbAJ&amp%3Bust=1643982817976000&amp%3Bsource=images&amp%3Bcd=vfe&amp%3Bved=0CAsQjRxqFwoTCJie0rPX4_UCFQAAAAAdAAAAABAD&utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-state-of-ghost-kitchens-in-2022-2717902" target="_blank" rel="nofollow">sctimes.com</a>

The State of Ghost Kitchens in 2022

1851 Franchise

1851 Franchise spoke with Al Hank, BBQ Holdings’ chief operating officer, to learn more about Famous Dave’s robust ghost kitchen strategy and hear his opinion on the future of the trend.

the-state-of-ghost-kitchens-in-2022

HomeTeam Inspection Service

HomeTeam Inspection Service Highlights Strong Franchisee Performance and Tech Innovation in Successful Second Quarter

hometeam-inspection-q2-2025-growth-expansion

TWO MEN AND A TRUCK

TWO MEN AND A TRUCK Celebrates 40 Years With Growth, New Franchise Signings and Charitable Milestones in 2025

two-men-and-a-truck-celebrates-40-years-with-growth-new-franchise-signings-and-charitable-milestones-in-2025

Express Employment Professionals

Express Employment Professionals Offers 50% Off Its Franchising Fee in Select Markets

express-employment-professionals-offers-50-off-its-franchising-fee-in-select-markets

Woodhouse Spas

image of woodhouse spa building franchise spa treatment

Woodhouse Spas’ Culture of Excellence, Support Further Elevates Top-Performing Franchise Opportunity

woodhouse-spas-supportive-franchise-culture

Sola Salons

Image of sola salons franchise spa industry interior of a franchise building

Sola Salons 2025 FDD Savings: How Data-Driven Adaptation Has Cut Costs for Franchisees

sola-salons-2025-fdd-savings

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Planet Fitness Franchisees Donate $100K to Support Texas Flood Relief - 1851 Franchise

Planet Fitness Franchisees Donate $100K To Support Texas Flood Relief

planet-fitness-texas-flood-relief

McDonald’s Is the Latest Franchise To Bet Big on Beverages with 500-Store Premium Drink Test

mcdonalds-is-the-latest-franchise-to-bet-big-on-beverages-with-500-store-premium-drink-test

Friendly’s Parent Company Acquired by Multi-Unit Franchisee as More Owners Take the Lead in Brand Acquisitions 

friendlys-parent-company-acquired-by-multi-unit-franchisee-as-more-owners-take-the-lead-in-brand-acquisitions

Subway - John Fitzpatrick Named CEO - Breaking News - 1851 Franchise

Subway Names Jonathan Fitzpatrick as New CEO, Effective July 28

jonathan-fitzpatrick-subway-ceo-leadership-change

AI Is Reshaping Franchising: $100 Billion Valuations and Hyper-Localized Advertising

ai-is-reshaping-franchising-100-billion-valuations-and-hyper-localized-advertising

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores - Agg - 1851 Franchise

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores

hooters-franchise-model-company-owned-closures

Rising Jobless Claims Could Signal Challenges — and Opportunities — for Franchising

rising-jobless-claims-affect-franchising

Technomic Releases Annual Ranking of the Top 15 Fast-Food Chains in the U.S.

technomic-releases-annual-ranking-of-the-top-15-fast-food-chains-in-the-us

Hely and Hiral Patel Bring Their Longtime Dream to Life With The Brass Tap

brass-tap-franchise-pasadena-maryland-hely-hiral-patel

DevHub - Meet the Supplier - 1851 Franchise

DevHub: Scalable Digital Marketing for Franchises and Multi-Location Brands

devhub-meet-the-supplier

1851 Keyword - The Secret To Succeeding With a Part-Time Franchise Is Picking the Right Model

The Secret To Succeeding With a Part-Time Franchise Is Picking the Right Model

part-time-franchises-picking-the-right-model

graphic image of a franchisee spotlight jeff kinkade of trublue home service ally

After Building One Home Services Business, Jeff Kinkade Is Doing It Again — This Time With His Son

jeff-kinkade-trublue-north-johnson-county

Navy Veteran and Professional Artist Couple Open Caring Transitions in Texas

Navy Veteran and Professional Artist Couple Set Out to Build a Purpose-Driven Business With Caring Transitions in Texas

navy-veteran-and-professional-artist-couple-set-out-to-build-a-purpose-driven-business-with-caring-transitions-in-texas

The State of Ghost Kitchens in 2022

MORE STORIES LIKE THIS