Ghost Kitchen vs. Restaurant: Real Startup Costs and Timelines

If your passion is food and you are ready to make it your vocation, this message is for you. 

Using current numbers, I want to compare the difference between renting a commercial kitchen (sometimes called a ghost kitchen) and a brick-and-mortar restaurant in Greater Los Angeles. Real costs and timelines for founders in Los Angeles and Long Beach are explored, and special attention is paid to the hidden costs you might encounter. 

Ghost kitchen numbers are from Partake Collective’s locations in Los Angeles and Long Beach. Restaurant numbers are an average – your experience will be unique, but the magnitude of difference is consistent. Here we go. 

Overview 

In most instances, opening a physical restaurant is going to take 12 to 18 months to launch and anywhere from $750,000 to $1.5 million to open the doors. The differences depend on things like renovation versus new build, current zoning of location, and amenities provided for customers. 

By contrast, most founders can ring up their first sales inside 45 days when operating from a ghost kitchen. Initial outlay averages $30,000, with a long-term lease of a couple thousand dollars per month, depending on the size of the kitchen suite and the term of the lease. Leases of restaurant space average $25,000 a month, depending on location and build out. 

Then it’s all about the details. 

Ghost Kitchen vs. Restaurant 

Timeline – To open a restaurant, you must lease, design, plan check and build the facility, as well as train staff. At a commercial kitchen with Partake Collective, you can launch within 30-60 days if you are prepared. 

Permits – A restaurant requires a full plan review with multiple building and health inspections, often taking months if not years in some cases. Our commercial kitchens are already permitted and we help you complete your licenses and certificate of insurance. 

Utilities/maintenance – A standalone means separate utility accounts and deposits, along with responsibility for maintenance of the property. A commercial kitchen facility includes utilities and maintenance fees with predictable costs established already, removing the guesswork. 

Equipment – A restaurant means buy and install all your equipment, both kitchen and support spaces. A commercial kitchen provides some equipment and is set up for plug-and-play installation of specialized equipment that many chefs require to support their business. 

Risk profile – Brick-and-mortar means higher fixed costs and a longer runway to the chance for proof of concept. Ghost kitchens offer lower fixed costs, faster testing and iteration of your creations. 

Step by step – Assuming take-over of an existing space, you must take these steps: lease negotiations (3-6 months), as-built & design (2-3 months), Plan check & revisions (4-6 months), build-out (4-6 months), hiring/training/soft-open (2-4 weeks). That’s 12-18 months if everything goes well. At commercial kitchens including Partake, there are three steps: application & fit (one week), insurance, business license, health approvals (2-5 weeks), and move-in, test days, first sale (1-2 weeks). We’re talking about 30 to 60 days if you are ready to go to work.