Imagine expanding a restaurant to fifty different locations throughout the world without ever having to lease a single square foot of dining space or purchase a single chair for any of those locations. This is the era of the “ghost” franchise, in which food brands have begun to grow in size by leveraging digital technology, cloud kitchens, and the use of third-party delivery companies to get their food in the hands of customers worldwide.
For decades, the cost of starting a franchise was relatively high due to the amount of money that needed to be invested in the build-out of the franchise location. However, ghost franchises change the game altogether. These are franchises that white-label products and services for others to operate, often taking advantage of the existing physical plant of another business that already has the necessary ability to offer these extra services.
The appeal for both sides is pure efficiency:
For the franchisor: Rapid and low-cost market penetration. The franchisor is scaling its intellectual property rather than scaling physical buildings. For information on Franchise My Business, visit https://www.ashtonsfranchise.com/franchise-my-business/
For the franchisee: Instant monetisation of underutilised assets. A traditional restaurant kitchen that is utilising only 60% of its capabilities during off-peak hours can be utilised to host two different delivery-only ghost franchise brands that use the same equipment and staff.
While this invisible expansion may be achieved relatively easily, there are still several hurdles to overcome in order to maintain high levels of quality control within these expanded kitchen spaces.
However, as consumers increasingly depend upon digital ordering systems to order their food, the franchise has proven itself to be intelligent about leveraging the existing physical spaces to create an efficient customer experience.
