One of the historical barriers to entry into the restaurant industry is obtaining start-up capital. According to Forbes, the cost of outfitting, renting or buying a building, and properly staffing a brick-and-mortar fast casual usually ranges between $250,000 and $400,000. .

At its core, that’s what fueled much of the ghost kitchen movement, says John Meyer, CEO of Ghost Financial. It provides a starting point for operators who lack the financial safety net that big brands have access to.

“Ghost Kitchens are revolutionary in that they have lowered the barrier to entry for foodies with a dream by reducing the cost and timeline to start a restaurant from $500,000 and an entire year, to $25,000 and 30 days,” he said.

Ghost Financial is a fintech startup that provides loans, insurance, salaries, and other financial products to ghost kitchen operators. Meyer started the business after venturing into the growing arena himself.

In late 2020, Meyer, who is based in Austin, Texas, launched the Keto Kitchen low-carb shadow kitchen concept as a “side project.” Within 60 days, the business was profitable, which led him to apply for a loan to expand.

After retiring to several major banks, Meyer says he realized there was a need for dedicated financial services in the ghost kitchen space.

“I walked into a big bank and asked for an expansion loan and the bank manager literally asked me what a ghost kitchen was,” he says. “It’s very clear that the traditional banking industry has no idea what’s going on in terms of the evolution that’s happening in this trillion-dollar food space.”

“I saw how tight the margins were and how expensive it was to run a successful operation,” adds Meyer. “I spent my time figuring out how to make more money for restaurant owners and owners.”

Ghost Financial’s services were designed with traders in mind. One of the insights Meyer gleaned from his work was how much money was spent on inventory without getting any benefit from massive monthly recurring expenses.

The end idea being the Ghost Financial charge card, which offers 1% cash back for inventory spend and has the potential to fetch thousands of dollars in returns, Meyer says. He estimates that this could increase profit margins by up to 10%.

“Anyone can start using this card as long as we can verify that you have a legitimate transaction, he says. , get approved, and start using it to start your business in a fraction of the time it usually would take.”

The company also provides shadow kitchen insurance, loans for expansion, and a payroll system tailored to these spaces.

carl Orsbournco-author of Deliver the digital restaurant, says all of these products are useful for independent operators, who have different needs than established brands trying to capitalize on the ghost kitchen boom. After spending years researching digital restaurants for his book, he says there are several viable ghost models, but it really comes down to individual needs.

“Having an entity like Ghost Financial is useful because they can ensure that they [independent operators] don’t waste time, energy and resources in the wrong spaces,” he says.

This is precisely what Meyer seeks to avoid for operators. He says corporate brands have huge legal and financial teams that give them a head start when it comes time to open a store or grow, when those services simply aren’t available to them. small enterprises.

“We want to see these people succeed,” says Meyer, who estimates that the current ghost kitchen failure rate is around 35%.

Orsbourn believes that independent ghost kitchen operators can succeed in a space where big brands and chains have started to flex their muscles.

“It’s really hard for independents to win in this particular environment because they don’t have the means to scale or the resources that a corporate brand might have,” Orsbourn said. “But I think indies have a chance to succeed, really. I know that because I know indies who do very well in that environment.

To help educate operators on the do’s and don’ts of the ghost kitchen space, Meyer and Ghost Financial have launched the GhostU online platform.

“I want to make sure that with proper education, the industry sees failure rates drop to 5% or less,” Meyer says.

The GhostU program will include at least 12 MasterClass-style videos, which will cost $1,000. They will come with step-by-step worksheets and three months of access to Ghost Financial’s Ghost Kitchen community, a forum where homeowners can share experiences and access interactive workshops.

Topics will include how to maximize profitability, build a powerful team, secure funding and investors, and get the most out of delivery apps.

Additionally, Ghost Financial has partnered with Maker Kitchens, which operates commercial ghost kitchen facilities in major metros nationwide. Through this partnership, Ghost Financial will become the preferred insurance and lending partner for more than 300 Maker’s tenants.

Meyer says the deal with Maker is hopefully the first in a long line with ghost real estate companies. Like Meyer, Maker wants to maximize the profitability of ghost kitchen operators. Tenants under the Maker umbrella will have access to Ghost Financial’s margin enhancement products, and Ghost Financial will be able to reach more ghost traders.

“There are huge players making shadow kitchen installations, but there are more mid-sized companies, like Maker, finally bringing much-needed competition to the market with much more attractive pricing and contracts. flexible,” says Meyer. “Maker approaches the ghost kitchen space with an empathy-driven lens and combines that with an equitable business model.”