Dark Kitchen – How Much Money Can You really Make?

Dark kitchen, ghost kitchen, virtual kitchen.. so many names for what is basically a delivery only kitchen. The low setup cost compared to traditional restaurants has made this a growing trend for food business entrepreneurs. 

But you have to be careful here, starting a dark kitchen can mean 3 things:

Dark kitchen as a food brand

This is a real startup business. You create a new food menu and you then promote this menu on food delivery apps such as Deliveroo and Uber eats. As soon as an order is placed, your cloud kitchen makes the food and the delivery people deliver. 

That’s it! You do not need a front of house, high street rent prices and you don’t need to decorate your restaurant. This is about efficient food making and marketing.

Rebelfoods raised 125M$ this summer just to build dark kitchen brands. https://rebelfoods.co/

An extension to your existing restaurant

You already have a restaurant and you’d like to grow by getting into the food delivery business. Using your existing kitchen to cater for extra online orders can mess with your setup. It’s also not great having delivery people constantly walking in and out of your restaurant while clients are eating.

A virtual kitchen will enable you to make and deliver your restaurant’s food off site. It could also allow you to extend your brand and reach to other areas in town. 

Dark kitchen as a property investment

In this case, you lease or buy a warehouse. You then split the building into fully kitted professional kitchens and you then rent these kitchens out to food brands. These brands can be pure dark kitchens or extra space for restaurants. 

In the UK you’ll find:

Dark kitchens as a commercial property investment is big business. Foodstars is actually owned by CloudKitchen which is Travis Kalanick (the founder of Uber).. small world!

In London, prices are high. Renting a dark kitchen will cost you £3000/month + VAT on a 12 months contract.

Let’s do some quick maths:

Outgoings

£190 000/year: 4000 sqft warehouse in south London rent + business rates + maintenance. 

£275 000 in year 1: refurbishment for 15 kitchens (£15 000/kitchen) + shared area (£50 000)

_______

  • £465 000 in year 1
  • £190 000/year in year 2+

Revenu

£540 000/year: 15 kitchens x £3 000

Profit

  • Year 1: £75 000
  • Year 2: £350 000

Obviously, this is an estimation. There will be a churn rate. Not all kitchens will be full all the time and you’ll have issues. But that’s a very healthy return on investment even if half of the kitchens are empty…

You’d have to flip A LOT of burgers to make that kind of money…

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