How to Start a Ghost Kitchen: Tips, Tools, and Resources
Before we dive into how to start a ghost kitchen, we’re going to cover a brief introduction to the concept. Many major chain restaurants have already hopped on the bandwagon, and new independent eateries are showing up across the US. Some experts report that in 2019 the delivery-only concept had raked in $43.1 billion. Those same experts anticipate that the dark kitchen industry will grow to about $72 billion, but there’s no limit in sight. The new movement toward ghost kitchens, virtual kitchens, and a few other hybrids has the Internet buzzing with online orders and a promising future for the food and beverage industry. Ghost kitchens, also known as dark kitchens, are popping up all over the US. Existing commercial kitchens are benefiting from renting out space when it’s not in use, and kitchens designed specifically for this emerging concept are developing in larger cities. We’re also seeing multiple menus being offered from the same kitchens.
Restaurants and commercial kitchens are scrambling to unroll this unconventional business concept across America, but there is plenty of room for growth. If you’re looking for ways to maximize profits from your kitchen investment, this article is just the guide to offer insights and get your ghost kitchen startup running quickly.
MyCompanyWorks has formed tens of thousands of startup LLCs and Corporations since 2001. If you’re ready to start a ghost kitchen business, we can form your LLC or Corporation online, starting today.
Read on for more information on the following topics:
- Ghost kitchen definition
- Ghost kitchen startup benefits
- Licensing and tax responsibilities
- How to start a ghost kitchen
Ghost kitchen meaning
There’s some disagreement over where the first ghost kitchen started, but they are extremely popular in Asia and Europe. Since about 2015, this concept has also swept across America. Wikipedia states that the first ghost kitchen was actually an illegal operation in New York City. However, once the owners produced proper licensing, they were allowed to continue, and the concept has only grown since the pandemic. A ghost kitchen – also known as a dark kitchen or cloud kitchen – prepares food for online-only menus and serves meals via delivery. Some kitchens have incorporated pick-up windows or limited outdoor seating, but the money savings come largely from the absence of a restaurant storefront. Existing restaurants can either use their own space to run additional online kitchens or rent out space when the kitchen’s not in use.
The ghost kitchen concept is an excellent way for restaurant startups to open on limited funds and experiment with menus.
4 ghost kitchen startup benefits
- You’ll still need startup funding, but you can open a ghost kitchen as soon as your business is registered and you have a signed lease agreement with a kitchen. If you’re already in business, you can start making food under the ghost brand as soon as your DBA is filed and the online menu’s ready.
- A ghost kitchen LLC is easy to start and costs less than a traditional corporation to manage.
- Especially for new restaurateurs, the ghost kitchen concept is much easier and less expensive to run than a traditional dine-in restaurant.
- Starting a ghost kitchen is the perfect way to experiment with endless menus without the theme and overhead of a brick-and-mortar building.
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Ghost kitchen business plan
If you’re going to need funding for your ghost kitchen, your business plan is critical to securing funding and establishing bank and credit accounts. A well-written business plan can be the difference in whether or not investors and lenders take your ghost kitchen seriously. we have a guide to help you write a professional business plan or hire a professional.
This handy Ghost Kitchen calculator will help you determine how much funding you’ll need to get started.
How to start a Ghost Kitchen
Our comprehensive state business guides offer instructions and resources to start a ghost kitchen in your state.
When you start a business, LLC or incorporation paperwork is typically filed with the state’s business division. You can search online for the website of your state’s Secretary of State to find out where to register. The majority of states now have online filing systems, but be mindful that some state sites aren’t very user-friendly, so make sure you’re prepared to spend some time and effort inputting your data.
In general, the ghost kitchen LLC or corporation will require the following information to apply for business registration:
- Your company name – should be screened through at least a Google search and your county or state’s business database to confirm the name isn’t already in use. Scanning the US Patent and Trademark Office site for your name is advised for national and international businesses.
- Primary business address – this will be the address of your ghost kitchen.
- Names and addresses of agents or members that are authorized to manage or control business activities.
- Appoint a Registered Agent – you can appoint yourself or someone else.
NOTE: To be your own Registered Agent, you’ll need to make sure you’re available during business hours and will also have to go through a few additional steps. If you don’t want to be your own registered agent, MyCompanyWorks professional registered agent service will cover you.
Once you have registered your business and appointed a Registered Agent, you can hold your initial business meeting and establish an operating agreement.
NOTE: All business packages come with a free operating agreement.
Ghost kitchen DBA
If you’re already running a restaurant, a DBA (“Doing Business As” or sometimes called a trade name or fictitious name) can be used to distinguish between your brick and mortar and online kitchens. As long as you can keep funds and accounting separate, a DBA is a quick and affordable way to establish a separate ghost kitchen identity. We can prepare DBA documents for any county and send them for you “signature ready”.
Ghost kitchens for rent
There are different organizations across various states that lease ghost kitchen space. You may have heard of CloudKitchens, one of the nationwide commercial kitchens, but there are lots of local options if you just search Google for “ghost kitchens for rent” in your locale.
Ghost kitchen licenses, permits, and taxes
Depending on what your ghost kitchen offers, licensing and permits vary by local and state jurisdictions. If you’re going to have employees, you’ll need to apply for an Employer Identification Number – or EIN with the IRS. You’ll definitely need a state business license, but you may also be required to apply for city and/or county licenses and permits to operate legally. You’ll like need some combination of the following licenses and permits:
- Employer ID Number (EIN)
- state business license (and maybe even local licenses)
- occupancy permit
- food or health inspection permit
- state resale permit
- sales tax license
- permits related to proper food waste disposal
- if you’re operating off-site catering or food truck services, you’ll be required to obtain additional licenses and permits
We’ll apply for your EIN free with either our Entrepreneur or Complete business package. EIN searches are available as an add-on to our Basic business package.
Your local business licensing division can help you file for all the necessary licensing and permits. Our business license partner can also help you apply for all the appropriate licenses in one place.
Apply for Your Ghost Kitchen LLC or Corporation Today
To summarize, we’ve gone over the popularity and possibilities of the ghost kitchen model in the US. Many existing restaurants are embracing the online and delivery-only concept as a way to maximize profitability and experiment with various menu items. New restaurants are using the ghost kitchen or dark kitchen model to try new things and get a feel for what the public wants from their online menus. The ghost kitchen model also allows new businesses to start quickly without a bunch of overhead or heavy financial burdens.
Whether you decide that an LLC, Corporation, or DBA is right for your ghost business, we’re here to help you file documents and prepare for a healthy startup. Check out our website and blog for all kinds of information and resources to help your start and manage your company all in one place.
We hope this article has offered help and tips to start a ghost kitchen LLC or corporation. Contact your state business division if you want to start a ghost kitchen on your own, or let MyCompanyWorks online business startup service do the work for you.
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