By now, most people have heard about Ghost Kitchens and Virtual Brands, do they work? Virtual Brands are restaurant concepts that are online-only brands that offer pickup and delivery. Virtual Brands help restaurant owners create multiple brands to represent its existing menu.
Restaurant owners have complained about third-party platforms only allowing restaurants to choose a couple searchable terms for customers to find them on. This is a big problem because what happens if your restaurant has a diverse menu? Only 2-3 searchable terms will not cover most restaurant owners’ menus.
Dominique Maddox, a Restaurant Broker and Founder of EATS Broker, says, “ I can see more restaurants creating Virtual Brands in 2021 to help with the decrease in business and with indoor dining restrictions. I know a restaurant owner that owns a bar/tavern; they created a Chicken Wing, Hot Dog, and Hamburger virtual brand. Now their portfolio has 4 different restaurant brands under one roof.
The most successful virtual brands understand their labor cost, food cost, marketing cost, and delivery party commission to make them profitable”.
What are the Pros and Cons for Virtual Brands?
Pros:
-Helps restaurant owners create 2nd and 3rd streams of income
-Helps restaurant owners increase food delivery sales
-Does not require multiple locations
-Great way to add new food options to customers
-Can make money by charging for shared kitchen space to other Virtual Brand operators
Cons:
-Food cost can increase due to adding new items to the menu
– Most restaurant owners are too busy marketing and branding their central concept that they don’t have the time to focus on building up the Virtual Brand.
-Adding Virtual Brands can make restaurant owners a jack of all trades but a master of none
-Increased labor costs can be an issue with making various food cuisines.
-Virtual Brands don’t allow you to promote your primary restaurant
-Google Reviews are usually done on brick-and-mortar locations and not Virtual Brands
Virtual Brands and Ghost Kitchens will continue to grow in 2021. Some restaurant franchise brands and restaurant owners are experiencing success with Virtual Brands and Ghost Kitchens. Others are not experiencing success because they don’t have time to build up and market the new concept. The concept of having a brick-and-mortar location for customers to dine-in is a concept that some restaurant owners are moving away from, and they are much happier with virtual brands.
For more information on the restaurant market and other available consulting services or restaurant valuations, contact Dominique Maddox at 404-993-4448 or by email at [email protected]. Visit our website at www.EATSbroker.com
