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What is a Virtual restaurant?

Learn more about what a virtual restaurant is, how to start one, and how much it costs to open one.

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A virtual restaurant is a restaurant that services customers solely through online ordering. Learn more about what a virtual restaurant is, how to start one, and how much it costs to open one.

What is a Virtual restaurant?

A virtual restaurant is a food business that exclusively sells and serves customers through an online platform, meaning, there is no physical location for customers to dine in at the restaurant. Instead, the restaurant operates in a shared, commercial kitchen space (usually with other virtual restaurant concepts) and offers its menu on online ordering platforms. A virtual restaurant will primarily sell their food through an app or through phone orders and the customer will either pick up their order or receive it through delivery.

What is the history of Virtual restaurants?

Food service apps have changed the typical restaurant concept and the 2020 COVID-19 pandemic heavily influenced the shift to virtual restaurant concepts. But, delivery-only virtual restaurant concepts have existed since 2013 when the first virtual restaurant concept called Green Summit Group opened a “ghost kitchen” in New York City.  A “ghost kitchen” is a term used to describe a commercial kitchen space within a delivery hub where chefs can cook food made to order for delivery to the customer. 

During the pandemic, many restaurants were closed or on standby due to the health department restrictions regarding public dining. At the same time, the industry saw a huge demand for home delivery, which increased the interest in virtual restaurants.

What is typically on the menu at a Virtual restaurant?

Since any type of restaurant can operate as a virtual restaurant, you can find various types of food options. Virtual restaurants tend to operate on quick processes, so many virtual restaurants will offer foods that are easier and fast to cook and can be prepped ahead of time.

Some common menu items at a virtual restaurant include sandwiches, pasta, burgers, chicken fingers, salads, and rice bowls.

How do you start a Virtual restaurant?

If you want to start a virtual restaurant, one of the first steps to take is to conduct a market analysis and determine the competition – and what types of food you should offer to set yourself apart. Since you do not need a brick-and-mortar location for your restaurant, you will instead need to find a commercial kitchen to run your virtual concept out of. You will also need to determine an online ordering platform and delivery app that will allow customers to place orders and receive the delivery. 

To lease or rent a ghost kitchen, you will need to submit a business plan or proposal, so one of the first steps to starting a virtual restaurant is writing out your concept, determining your market strategy, and calculating your financial start-up and operating costs.

How much does it cost to start a Virtual restaurant?

On average, it costs between $20,000 and $60,000 to open a virtual restaurant in a ghost kitchen and the monthly operating costs range from $13,000 to $65,000. This is a much smaller starting cost than opening a typical brick-and-mortar restaurant, which can average between $95,000 and $250,000 in start-up costs

Constructing your own commercial kitchen for your virtual restaurant can increase those costs, so you should weigh your options between building out your own space and leasing from an established commercial kitchen or restaurant. How you choose to model your virtual restaurant and where you are located will determine your monthly rent, utility costs, and marketing needs.

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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.