on the money entrepreneur By Jana Jacobs
Giving up the (traditional) restaurant ghost
The concept of ‘ghost’ kitchens, which are restaurants that operate purely on a delivery basis, has gained traction abroad and South Africa is catching on. Axelrod and Theodosiou run three brands from their kitchen: ONO (pictured), Metalab Meals and Pap ’n Chuck.
g
Jake Axelrod (L) and Anthony Theodosiou (R) run a ghost kitchen in Sandton, Johannesburg.
host, dark or cloud kitchens – also known as virtual restaurants – are commercial facilities purpose-built to run restaurant kitchens on a delivery-only basis. Although still a relatively novel concept in South Africa, there are a few in operation locally and their low-cost business model is providing a unique advantage amid the Covid-19 lockdown. Anthony Theodosiou, who runs a ghost kitchen in Johannesburg with his business partner, Jake Axelrod, talks to finweek about why he did away with his traditional dine-in eatery in Melrose Arch in favour of this model.
Can you tell us how your business works?
Myself and my business partner, Jake, run three brands (ONO, Metalab Meals and Pap ’n Chuck) out of one kitchen space located in the industrial side of Sandton. We use UberEats as a platform to deliver our meals. This platform only works for the immediate 5km around our site. So, to target a larger market and reduce the commission structure that UberEats charges us, we are launching our own web platform that we will run, which will facilitate the delivery of our brands across Johannesburg. 46
finweek 25 June 2020
What made you decide to forgo your sit-down eatery?
I spent three years in retail spaces only to come away with a lot of effort expelled for very little return. The rentals were just too high for the level of foot traffic these retail spaces were ‘promising’. Without a license to sell alcohol, a restaurant needs to sell high-volume; low feet = low volume.
Do you think switching to this model put you in a better position going into lockdown than if you’d still been operating on the dine-in model?
Absolutely. There would be no way of coming out of this for the small brands that we currently run. The economy was already depressed throughout 2019 and 2020, the lockdown has exasperated this. As it stands, our brands are 50% down on sales, and in a retail space it would be worse as foot traffic would be at its absolute minimum. Not only that, there are no sit-downs allowed and that cancels out all alcohol sales. These stores are now doing a fraction of the turnover they once did by trying to reach online customers through apps, with the staff and overheads they’ve always had. www.fin24.com/finweek
