'Ghost kitchen': How a plain storefront hides more than a dozen delivery restaurants
Business model is gaining popularity as food delivery apps gain a foothold in Canada
More than a dozen delivery-only restaurants are being run out of this 'ghost kitchen' in southeast Calgary. It's a new business model that capitalizes on the popularity of delivery apps in Canada.
It's a modest storefront, sandwiched between two thrift stores in a quiet strip mall on the edge of a southeast Calgary rail yard.
But between 6 p.m. and 3 a.m., the restaurateur behind the business says it will be abuzz with delivery drivers ducking in and out, bringing orders from 13 different restaurant concepts to people across the city with late-night cravings.
The restaurant (or restaurants) opened Wednesday as Alberta's first "ghost kitchen" — multiple restaurants operating out of a single kitchen space, leaving the customer service and delivery up to third-party delivery companies.
It's a unique concept no one else is doing.
"Ghost kitchens" are a new restaurant model that's taken off as food delivery apps like Skip the Dishes, Foodora and UberEats have gained a foothold in Canada.
Someone sitting on their couch at home ordering beef kufta from Babaz Shwarma might not realize that their order is coming from the same address — 2808 Ogden Road S.E. — as an order of perogies from Pepe's polish restaurant, or a churro burger (which is exactly what it sounds like) from, you guessed it, Churro Burger. Each is advertised as a separate business.
"No one has done it in Alberta so far," says restaurateur Ramandeep Sahota.
He and his business partners have licensed the restaurant names from Toronto-based Jackpot Brandz but will run all of the restaurants under the concept name Nikos.
Taking advantage of market demand
Sahota said the business is designed to fill a niche market: late-night demand for a variety of cuisines. When most traditional restaurants or bars have closed their kitchens, his will remain open.
Data from various food-delivery apps helps ghost kitchen owners determine what types of restaurants would be popular in different neighbourhoods and what hours of operation would be most successful.
The ghost kitchen concept also allows business owners to take advantage of cheaper real estate, since they won't need to rely on foot traffic or a busy dining room to drive revenue.
"After 9 or 10 p.m., sometimes it's really hard for us to find good food … if anyone orders from [our] 13 different menus, we will get the order at Ogden, and we can now make it and prepare it, and then we can send it through Skip the Dishes anywhere," he said, adding that his cooks have been trained to average a prep time of 10 minutes for an order.
Sahota said he doesn't require any additional Alberta Health Services approvals — the kitchen's been inspected, and any number of restaurants can run out of the space.
Same rules apply to 'ghost kitchens': AHS
AHS said it's aware of the concept of "ghost kitchens," and it's available to work with any operators planning to open one. It said it hasn't issued any enforcement orders for a "ghost kitchen" to date.
"Any food business, be it a restaurant or a kitchen that uses an external delivery model, has to adhere to the same food safety regulations outlined in the Public Health Act. They must be inspected … and have a valid food handling permit," an emailed statement read.
"Additionally, any food business that sells its products through a third-party delivery service has to make sure that every item is visually associated with their business name as it appears on their permit. This ensures that patrons are able to follow up or make a complaint should an issue come up. Environmental Public Health investigates all complaints.
?"Whenever possible, EPH also works with businesses that offer food delivery to make sure that their clients are operating safely and legally."
Multiple delivery restaurants, with different menus and cuisines, are operating out of a single kitchen in southeast Calgary. (Sarah Rieger/CBC)
Sahota eventually wants to open a kitchen every four to five kilometres around the city with the same restaurant names and menus in order to increase their coverage area.
A second location will be opening on Northmount Drive N.W. in February, and one in Edmonton shortly after. And Sahota hopes to open the restaurant for dine-in customers as well during the day, to serve workers in the nearby industrial area.
Sahota doesn't have a background in the food industry — he's an insurance agent — but says the idea is good business.
"It's a unique concept no one else is doing, and I see it as a win-win situation."