Making sure your franchise restaurant succeeds
The F&B industry is one of the most competitive industries in the world, with more than RM82.8 billion made in 2017 and an annual growth rate of 11.7%. There are many different cultures in Malaysia, contributing to food that is very culturally diverse. American, Middle Eastern, Thai, Japanese, Italian, and Malaysian food are all options that Malaysians choose daily.
Running a food and beverage (F&B) business isn’t easy, especially with high overhead costs and huge risks that make starting a F&B establishment hardly a worthwhile undertaking for many aspiring F&B owners.
This concern has only been exacerbated in 2020, as Malaysia plunges into lockdown in the face of the COVID-19 pandemic. Restaurants were forced to halt operations, leaving F&B owners suffering huge losses. Many restaurateurs realised that the best option to see their business succeed was to pivot towards food delivery options.
However, it is also this time that a new trend in the food industry was fully realised – that of food delivery. Even as the effect of the pandemic wanes, the online food delivery business is showing no signs of slowing down. The food delivery market is headed to reach USD2.1 billion in 2022, with a predicted 13 million people by 2027. It is for this reason that so many F&B businesses have transitioned their businesses into ghost kitchens as online food delivery options amount to 70% of all meals ordered.
What is a ghost kitchen?
Ghost kitchens – also called cloud kitchens, virtual kitchens, as well as dark kitchens – are culinary spaces that give you the opportunity to expand your food business quickly and effortlessly with only minimal financial outlay. Ghost kitchens are centred around food delivery instead of dine-in experiences. All that matters are the orders that come in and the food that’s prepared before being delivered to customers’ homes.
With this business model, you cut all the upfront and operational costs that you normally undertake when opening a regular restaurant. This way, you get to open a franchise fast, in a great location, and close to many new customers that otherwise wouldn’t be buying from your F&B business.
When you work with a kitchen space provider such as KitchenConnect, you’ll have your F&B franchise up and running in no time at all! You can launch locations all over Malaysia and attract a wide array of customers.
One of the most attractive features of setting up a ghost kitchen is that there is hardly any risk involved. There isn’t a huge amount of capital that needs to be laid out, meaning you can move fast and effectively in transitioning your restaurant.
Why Ghost Kitchens?
There are many options available to franchisees, especially in Malaysia. On some corners, there are drive-throughs and on others lie dine-in restaurants – not to mention all the food businesses at local markets. What the coronavirus did was shake the industry and showed restaurateurs like yourself the wealth of benefits of transitioning to ghost kitchens and food-delivery services.
The concept is easy to grasp and transitioning from a dine-in restaurant to a ghost kitchen is a natural progression in the food industry. Ghost kitchens allow F&B businesses, such as the one you own, to expand at only a fraction of the cost you would spend on a regular restaurant. They’re wonderful as they focus on catering for Malaysia’s budding delivery industry. Ghost kitchens give you all the tools, security, and space you need so that you can quickly expand your business with minimum capital outlay.
Suddenly customers and areas you never thought were possible to tap into all become an amazing reality – with quick set-up times and low investment costs as well.
5 ways ghost kitchens are the dream answer to your F&B business
1. Reach more customers than ever online
The most important thing when it comes to your F&B business is the customers you serve. You have to know who they are and cater to their needs so that your food services will be in high demand. By 2025, the food delivery industry is expected to be worth USD $470 billion. It’s important to jump on the bandwagon, not only because all your competitors are, but because you need to cater to all those people out there that are potential customers. By streamlining your business and concentrating on a delivery-only business model, you’ll be able to get orders in and out in a matter of minutes. The best thing is that all this will be done from an efficient space where all the facilities you need are available at your disposal.
KitchenConnect has done the hard work for you in finding the best areas for food-delivery businesses. You’ll be opening in the hottest areas around Malaysia, where rent is reasonable and hungry customers are always close by. Besides, ghost kitchens perfectly complement other dine-in locations – should you already have them.
2. Lower upfront and operational costs
In the F&B business, there is often nothing more expensive than the capital put towards an on-site, dine-in location. In such restaurants, customers are seated by waiters who come and take their orders. In the kitchen, a head chef makes sure that all the other chefs (often up to 20 or more) are doing their jobs properly. There are also dishwashers and cleaners who constantly make sure the restaurant is looking pristine, and toilets are kept clean. Together, you’ll be paying extortionate amounts of money every month in the form of salaries that eat away at your profit. Many months, restaurants find themselves not making a significant profit.
However, when you open and run a ghost kitchen, it costs only a fraction of a traditional restaurant. Instead of these countless restaurant employees, all you really need now are a few great chefs. Our runners and your food delivery service partners will step in to do the rest.
In fact, when you open a ghost kitchen, it will cost you less than MYR 161,760 in comparison to the usual MYR 500,000 it costs to start a restaurant or café in Malaysia.
You’ll also have the pleasure of knowing that logistical issues that go into running a dine-in restaurant – like rent, wasted food, and other logistical requirements – simply fall away. What matters here is speed, efficiency, great food, and on-time deliveries.
3. Turnkey expansion
One of the most frustrating parts of opening a new franchise is the time it can take from conception to your first order.
You are literally starting from the ground up and often spend time waiting for reconstruction to take place before you can even open the place. Another great benefit of ghost kitchens is the fact that they are extremely quick to set up. In fact, many businesses moving into our ghost kitchens have set up their space within a few weeks.
Once you rent your ghost kitchen, all you need to do is put your basic equipment in place, organise your chefs, and start cooking. Typically, you’ll be seeing a positive return on your investment within 6 months – a short timeframe compared to the five years it often takes for dine-in restaurants to see the same.
4. Expand quickly
You’d never imagine how fast you can grow your F&B business in so many locations thanks to ghost kitchens. Expand quickly, get your name to as many areas as possible, and watch your F&B business flourish.
5. Partner with third-party delivery platforms
When you move into a KitchenConnect space, all the technology you need to operate your business as effectively as possible is waiting for you. Ghost kitchens work easily with many food delivery businesses such as GrabFood, Food Panda, Bungkusit, Hometaste, Pop Meals, and many more. All of these orders can be easily tracked and managed through a single tablet in your kitchen.
KitchenConnect is also ready to provide support anywhere you may need it while transitioning your business. Maintenance and security are all taken care of by us.
Ready to open a ghost kitchen?
At KitchenConnect, we strive to drive innovation and help F&B franchises succeed in this new norm. We’ve been at the forefront of the new and modern delivery-centric world helping F&B businesses find renewed success.
Interested in making a great ROI in our kitchen spaces? Fill in our form below to contact us today, and our friendly customer service staff will help you with any burning questions you may want to ask!