Chicago, IL

Chicago to Open Second Multi Restaurant Ghost Kitchen Downtown: What It Means for Restaurant Workers

Natalie Frank, Ph.D.

Benefits and concerns related to Kitchen United plans to open second Chicago location

Source: Kitchen United Pasadena

Kitchen United, the California based ghost kitchen company, has announced plans to take over the 10,500 square foot Well Street Market space, which has been vacant since September 2020. The company already has entered the Chicago area with a popular 16,000 square foot River North location, which opened in 2019. This facility is housed in a former culinary school and has 11 kitchens with each restaurant having its own staff. Overhead is further reduced through shared freezes, dry storage and cold storage space. Kitchen United rents scaled-down kitchens to restaurants that use the space to prep orders for delivery, takeout and catering.

The new Chicago location will be similar to the original one, allowing customers to order food from different restaurants while providing a single location to pay and pick up their orders if they’ve opted for take-out. Customers also get the convenience of selecting items and paying online. The new locations will have ten kitchens but hasn’t yet announced which restaurants will be part of the new project.

The original ghost kitchen owned by Kitchen United at 831 N. Sedwick is home to a number of chain restaurants including Jollibee, Portillo’s Panera Bread, Chick-fil-A, The Budlong Hot Chicken, and Smokey Bones Bar and Fire Grill. The new location will originally have a similar set up but there are plans to eventually turn it from a ghost kitchen to a food hall with tables and chairs for all customers of the self-serve establishment. Pickup and delivery options will still be available.

Ghost Kitchens and Kitchen United

Kitchen United was a success from the beginning. It first opened in 2017 and within two years received $40 million in funding which allowed it to grow at a rapid pace. This meant it was well positioned when the pandemic began to help restaurants remain in business by allowing them to downsize operations while still maintaining a revenue base.

The concept of the ghost kitchen isn’t new, but it has taken off exponentially during the pandemic as one way that restaurant owners can stay in business. These facilities are usually solely kitchen spaces without any place to dine. They offer pickup and delivery only while some provide catering as well.

Although prior to the pandemic ghost kitchens in Chicago were designed specifically for that purpose, since COVID-19 many of these new kitchens are rehabbed restaurant spaces. Some of them, like Charmers in East Rogers Park which was previously a dine in, dine out coffee shop with no delivery service, has kept the kitchen function but changed the restaurant space into something new. At Charmers what was once indoor seating is now a quaint little boutique gift shop. Coffee and food can still be picked up at a new take out window along the side street. They have also added delivery services.

Concerns of Small Businesses Related to the Multi Restaurant Ghost Kitchen Trend

While the Kitchen United model seems like a sound one for owners, employees and customers alike, apprehension exists for those in the restaurant business who were hit hardest by the economic fallout of the pandemic. Small restaurant owners are concerned that the lineup at the original location indicates that small independent restaurants will be priced out and not able to compete in order to obtain one of the spaces.

Another concern, at least for the duration of the pandemic, is that the pared down operations allow kitchens to operate with only 2 or 3 staff at a time. As restaurant workers suffer from unemployment due to the numerous restaurant closures which are either temporary or long term, there is worry that the concept of the ghost kitchen will begin a trend that will continue past when restaurants are allowed to reopen.

The fear is that the number of jobs won’t bounce back since remaining restaurateurs will likely fall into two categories. The first would be expensive, fine dining establishments that managed to weather the pandemic and will be able to handle any startup expenses associated with reopening. The second group would be less expensive restaurants who barely held on during the health crisis and who will remain in business by making their ghost kitchen status long term or perhaps even permanent. Taken together, these possibilities mean significantly fewer jobs available for restaurant workers.

Many feel that even those workers who will be able to find employment in this ghost kitchen trend will not be able to make a living wage. That is because they believe that this model is perpetuated by the vulnerability of underpaid gig economy workers. Whereas workers in restaurants are classified as employees, those that work in ghost kitchens are usually classified as independent contractors. This saves restaurants more money because they don’t have to pay benefits or overtime.

Easing of Indoor Dining Restrictions in Chicago May Not Help Local Restaurants

Despite the easing of restrictions on indoor dining to allow up to 50 percent capacity for restaurants in Chicago, stories of inconsiderate, unmasked customers and anxious workers, almost none of whom are eligible to get the vaccine currently, many restaurants are remaining closed, further bolstering ghost kitchen businesses like Kitchen United. The longer this trend continues, the more restaurants will likely go out of business. Sam Toia, president of the Illinois Restaurant Association said, “The further we go, the harder it is gonna be for restaurants to re-open.”

Now, with predictions that 25% or 1 in 4 of small restaurants could close because of the pandemic, restaurant owners are apprehensive about continuing to operate a mortar and brick establishment, having learned that all you need is a kitchen, an online menu and a way to deliver food.

What the success of large scale multi restaurant ghost kitchens like Kitchen United, combined with the negative effects of the pandemic will mean for the future of the restaurant business stands to be seen. In the meantime, these virtual restaurants allow people to purchase meals comprised of comfort foods for pickup or delivery while giving them a break from cooking during a time when eating in sit down restaurants remains risky or not possible, at least in Chicago.

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