A cloud kitchen (or ghost kitchen) is a restaurant that sells only through delivery apps, with no dine-in area. It needs far less capital than a normal restaurant, skips prime-location rent, and can run several brands from one kitchen.
The catch is a specific set of risks: platform commissions (GP) eat into every order, and sales are tied to your in-app ranking and reviews, which can shift constantly. Before investing, you have to understand the per-order economics.
01Why capital is lower
- No expensive storefront rent — a kitchen in a secondary location works
- No dining fit-out or front-of-house staff
- Run multiple brands/menus from one kitchen to spread risk
- Test menus and close what doesn't work quickly and cheaply
02The per-order economics to model
GP quietly eats margin
Platform commission plus promotion spend can make per-dish profit far thinner than it looks. Compute net profit after everything, not just food cost.
03In-app ranking is your location
With no storefront, your 'location' is your ranking and reviews inside the delivery apps. Rating, speed, and consistency matter most. A good cloud-kitchen operator or brand helps with in-app marketing and running multiple brands efficiently.