'Ghost Brands' Deliver a Spirited Performance During Pandemic

Feb 3, 2021 4:00 AM ET
Article

Hong Kong’s restaurants haven’t had it easy over the past year with the pandemic battering business and sending customer numbers plunging as people stay at home.

The very notion of opening a new restaurant in such a climate might seem insane – but there is one model of restaurant that has succeeded in the downturn because it involves no rent, no shop front, no dine-in areas, and no waiters. Just food and delivery.

The “ghost brand” is a relatively new business model for restaurants to develop a second brand that offers a different menu. Using existing resources such as kitchen and staff, it exists only virtually to save costs and drive revenue.

A ghost brand allows a restaurant operator to test a new business idea with minimal additional capital spending. Without a physical restaurant, the operator only needs to worry about the menu, the food supply, the market demand, and the logistics of delivering the food.

This model not only allows restaurants to create new brands at low costs. It also opens up opportunities for non-restaurant operators to launch restaurant brands easily, leading to more crossover among different sectors. And with the pandemic generating a boom in home delivery, it may be the perfect business model for our times…

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