Not too long ago, ghost kitchens were hailed as the future of food delivery. Then restaurants started questioning their long-term viability once the pandemic was in the rearview mirror.
In some ways, ghost kitchens were a victim of their own success. Initial excitement and surging delivery demand led to rapid expansion before operational challenges were ironed out. As a result, many brands pulled back, and the model lost some of its luster. Now, only one in five quick-service operators surveyed by the National Restaurant Association expect delivery from ghost kitchens to become more common within the segment in 2025.
Some brands, like Marco’s Pizza, still see a bright future for the model. The company inked several fresh ghost kitchen deals late last year that have led to recent openings in Cleveland, Denver, and Austin.
That’s just the start. More units are in the works for cities including San Antonio and Charlotte as Marco’s looks to add delivery-only kitchens nationwide. Chief development officer Gerardo Flores sees ghost kitchens as a key player in driving multi-unit restaurant expansion and creating new pathways for growth.
Marco’s first got into the ghost kitchen game in 2020 with two sites in Houston, back when they were the solution of the moment for navigating through the pandemic. It didn’t race to add any more after that, but those initial units were still plugging along when Flores joined the company two years later.
“I started looking at the strategy there from a 10,000-foot level,” he says. “The stores that opened up in Houston were still performing very, very well. As we were looking into that, we realized this is a good opportunity for us to really look at another channel of distribution where we can put stores in locations at a fraction of the cost—probably about a third of the cost of a normal store.”
With a smaller upfront investment and the potential for higher returns on invested capital, ghost kitchens provide a more efficient model for franchisees seeking lower operating and real estate costs. They allow Marco’s to infill existing markets and enter new areas where a traditional brick-and-mortar store wouldn’t make sense—particularly in dense urban settings.
“We are very much an evening and weekend concept, so we’re not going to go into an eight-to-five office environment, but we can put one right outside of that,” Flores says, pointing to the new Austin location as an example. “It’s near downtown and near the University of Texas. Normally, there’s not a lot of traditional real estate in that area. So, it allows us to capture not just some of the university traffic, but also allows us to capture the business in the surrounding area.”
Beyond real estate flexibility, there are broader advantages to a delivery-focused model. Flores points to data from Deloitte and NerdWallet showing that customers spend 20 percent more when ordering via technology, and those who place online orders visit a restaurant 67 percent more frequently than those who don’t. Additionally, shifts in dining habits—such as the rise of remote work—have increased demand for lunch deliveries and family-style meals. Ghost kitchens allow Marco’s to quickly adapt to these changes while optimizing order times and logistics costs.
The company has a non-exclusive partnership with CloudKitchens, which houses multiple concepts in its buildings. All of Marco’s ghost kitchens are franchised, though the company is considering corporate locations in the future. Franchisees sign a kitchen agreement that gives them 150 to 200 square feet of space. Because of the compact footprint, the kitchen setup differs significantly from a standard location.
“We’re used to working with a 1,000-square-foot kitchen, and we have to condense it down to around 250 square feet,” Flores says. “We work very closely with our ops partners when we sit down and design the space. That includes different types of equipment, a different oven—just anticipating the flow of the space. The layout of the kitchen is the one thing that really sets this piece apart. We connect with our franchisees, our partners, our design team, and really drive towards making it functional at the end of the day, because we’re literally working with 25 percent of the normal space we would operate in.”
Another key challenge is raising brand awareness and clarifying that this isn’t a walk-in location for pick-up, he adds.
“That, along with the tech advances that we’ve done with our POS system, have really helped us considerably in driving growth here,” Flores says. “Our Marco’s Order Management system is really intuitive and helps us wrap these stores up.”
Two years ago, the company introduced Marco’s Order Management (MOM), a proprietary cloud-based tech stack developed in-house. By building its own system, the company eliminated the need for external tech vendors. The system integrates POS functions, labor scheduling, inventory management, and real-time dashboards, giving franchisees and store employees better operational insights.
Ghost kitchens are just one piece of a broader effort to diversify Marco’s real estate strategy. Last summer, the company unveiled a flexible prototype designed for various footprints, including endcap and in-line locations. Now, it is exploring how insights from its ghost kitchen operations can inform new formats and unlock additional nontraditional opportunities.
Flores aims to sign at least 10 more nontraditional deals this year, with ghost kitchens serving as a springboard into other high-traffic venues.
“The ghost kitchens are really our first toe dip into the nontraditional piece,” he says. “I would love nothing more than to get into universities and airports. We’ve touched a little bit on sporting venues as well, but my goal is to develop a format where we can turn our product over really quickly in these highly populated venues. So, nontraditional is going to be a concentrated effort for 2025.”
