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The strange, underground world of ghost kitchens in Virginia

"Build a food concept without losing your shirt," reads the marketing copy for CloudKitchens, a ghost-kitchen company from Uber founder Travis Kalanick.
Credit: AP
A bag of MrBeast burgers, delivered to the parking lot of the Town Center Barnes & Noble in Virginia Beach, Va., in January 2021. MrBeast is not a traditional restaurant, in the sense that you can’t actually go there. They also lack so much as a phone number. The burger spot instead has a shadowy and somewhat tenuous existence: findable only on delivery apps, and only if your address happens to fall within the delivery radius. (Matthew Korfhage/The Virginian-Pilot via AP)

VIRGINIA BEACH, Va. — I have arrived at a neutral location — the parking lot of a Virginia Beach Barnes & Noble — to procure a bag of hamburgers that can't be found at any restaurant.

The burgers in question are not good, as it turns out. They are, in fact, barely edible. But they arrive with a pedigree of sorts. They come from MrBeast Burger, a fast-food chain that launched overnight in December with a boggling 300 locations, stamped with the name of a 22-year-old North Carolina YouTube star famous for filming himself giving away stacks of money to randomly selected people.

MrBeast is not a traditional restaurant, in the sense that you can't actually go there. They also lack so much as a phone number. The burger spot instead has a shadowy and somewhat tenuous existence: findable only on delivery apps, and only if your address happens to fall within the delivery radius.

And because my home didn't fit into this category, here I was in a Town Center parking lot, flagging down a bemused driver who'd traveled only three blocks to reach me.

MrBeast is part of a massive nationwide trend toward ghost kitchens — also known variously as virtual kitchens, dark kitchens or shadow kitchens — an undercover version of a restaurant whose revenues already add up to billions of dollars nationwide.

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The idea is simple. Ghost kitchens are restaurants without the restaurant: delivery-only food brands that often make food in the kitchens of more traditional businesses. This might be a commissary kitchen for multiple brands or a restaurant that had its business decimated by the pandemic. In some ways, the ghost kitchens are the outsourced gig work of the restaurant world, an invention of the decentralized Internet economy.

MrBeast's burgers, as it turns out, were cooked at a corporate location of Bravo! Italian Kitchen, a chain that does not otherwise serve hamburgers — a fact you'd only discover through moderate online sleuthing.

While MrBeast Burger's menu was ostensibly conceived by online celebrity Jimmy "MrBeast" Donaldson, it was executed by a corporate chef from a company called Virtual Dining Concepts, co-owned by the founder of Planet Hollywood. And like Planet Hollywood, the company leverages celebrity clout to sell food. The company also pushes chicken "bytes" from rapper Tyga, and Italian subs from the Jersey Shore's Pauly D. Mariah's Cookies, a bakery branded for Mariah Carey, also sells out of the same Virginia Beach kitchen as MrBeast.

Ghost kitchens are often a bit like Mardi Gras masks for chain restaurants. Look on Doordash or Grubhub and you might find something called "It's Just Wings." While it may appear to be a new restaurant, it turns out to be a delivery-only wing brand cooked by Chili's and Maggiano's Little Italy.

Meanwhile, The Captain's Boil will deliver you bags of crawfish from locations of Ruby Tuesday. "Neighborhood Wings" turns out to be Applebee's. Chuck E. Cheese sells its pizza online as "Pasqually's," named after the mouse-mascot arcade's fictional chef.

The results could be charitably called mixed. Turns out, it's often smart to be afraid of ghosts.

But delivery-only kitchens are also one of the only categories of restaurants whose business has grown during the pandemic, as dining rooms have been shut down or limited across the country. Michael Schaefer, with market research company Euromonitor, estimated in a presentation last year that ghost kitchens could be a trillion-dollar industry by 2030.

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The restaurant-industry trade press has filled with headlines claiming that the ghost kitchen will either bring the death of the restaurant or become the food industry's savior, propping up revenues for pandemic-stricken restaurants by lowering overhead and making use of fallow grills and fryers.

"Build a food concept without losing your shirt," reads the marketing copy for CloudKitchens, a ghost-kitchen company from Uber founder Travis Kalanick. "Open a kitchen in one month. Test multiple food concepts out of one kitchen. Experiment with low risk. Minimize cost, maximize profit."

A few local restaurants in southeastern Virginia have gotten in on the ghost game, as well. Last summer, Norfolk Indian restaurant Tamarind received a sales pitch out of the blue from an Illinois-based company called Ghost Kitchen Concepts, which promised to market Tamarind's excellent chaat and curries online under the name "Gunpowder Cafe."

"It was another platform we could use for delivery service," said Tamarind co-owner Tejas Patel. "They market it for us, and like any third-party service, it costs a fee."

The Gunpowder Cafe concept has surfaced at various small Indian restaurants from Baltimore to San Francisco. But as it turns out, Gunpowder is less a restaurant than a shiny new name badge.

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Ordered side by side for delivery, dishes from Gunpowder Cafe and Tamarind were indistinguishable except by price. Gunpowder's "Peshawari" butter chicken costs $18.74. Tamarind's costs $14.99. But it's the same chicken, Patel says. Tamarind's delicious chickpea-blanketed samosa chaat, rebranded as a "deconstructed samosa," also receives a 25% markup.

But Patel said the extra business has been helpful to their restaurant, whose business has suffered during the pandemic. Though he credits his loyal regulars for keeping the lights on, the Gunpowder Cafe brand has allowed them to reach new customers they otherwise wouldn't have had.

"I don't mind if they give our food a different name," Patel says. "It's helped a little bit here and there. We get more orders per day — it's two or three extra orders we'd never have had. The way we look at it is, it's better than zero orders. We have a full running kitchen: If Gunpowder sells a couple dishes, why not?"

Local hot pot spot Fire Ninja also hosts a ghost kitchen, selling noodles under the name Ramen Hero. And in some of the country's denser food cities, from New York to Portland to Washington, small entrepreneurs have launched ghost kitchens serving off-track Thai or Burmese food.

But in much of the country, including Hampton Roads, the ghost kitchen has been a largely corporate phenomenon.

Large companies are far more likely to have the infrastructure in place to set up ghost brands that can crowd out struggling local businesses on delivery apps, says Pat Garafalo, a director at anti-monopoly advocacy group the American Economic Liberties Project.

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"It's generally a bad situation for small, local business," Garafalo says. "The pandemic has become an opportunity for these companies that have financial backing to surge into all these areas, and take advantage of the struggles of small businesses. "

Ghost kitchens are sometimes set up in partnership with app companies such as DoorDash, he says, who use data they've gathered from their own clients to conduct pinpoint marketing of dishes sold in direct competition with local restaurants.

The ghost kitchen concepts can, of course, also help local restaurants, said Virtual Dining Concepts spokesperson Tamar Aprahamian. She notes that while many MrBeast locations are chain spots, others are small restaurants that have been kept afloat during the pandemic by the added delivery business provided by fans of Mariah Carey or Jimmy Donaldson.

But in the long run, Garafolo considers the ghost kitchen an existential threat to traditional small restaurants, especially as the delivery market expands.

"The question is, do we want small businesses to survive?" he said. "Or do we want a world where the only option is SEO-optimized stuff that comes from a warehouse down the street?"