What is a Ghost Kitchen?
A ghost kitchen or virtual kitchen is a professional food preparation and cooking facility set up for the preparation of delivery-only meals. Some ghost kitchens franchises have allowed takeout meals or included drive-throughs. They do not include a storefront or indoor seating for customers.
The Local Culinary: A new Ghost Kitchen Franchise
The Local Culinary is the first ghost kitchen franchise that offers food services to businesses and individuals. It’s a new player that was founded in 2019 in a very new space that could be massively big, or it could be falling face. There is a lot of competition with the United Kitchen or CloudKitchens. There are a lot of players in the space. Some of them, are direct competitors to the Local Culinary.
In this article, I am going to review the Local Culinary as a franchise investment, particularly for those E-2 Visa investors.
The Local Culinary: More than 100 locations
I first heard about the Local Culinary from one of its founders, who reached out to me on LinkedIn. We have reviewed its FDD for a better analysis of the franchise. To this date, we haven’t advised any Visa Franchise clients who invest in The Local Culinary, but it got brought back to my attention because many people, said that the founder of the Local Culinary told them that we had four Visa Franchise clients that invested in the Local Culinary. When pressed on whom these Visa Franchise clients were, I could not get a response.
The local Culinary has more than 100 locations, they made the franchise 500 lists and were selected for 86 in terms of the fastest-growing franchises. On the contrary, I thought that was a little strange because I clicked on their LinkedIn and with over 100 locations, they just have six employees. And with one corporate location that they have in Miami, I would imagine there’d be more employees.
A few months back, one of our team members at Visa Franchise spoke to one of their franchisees. The franchisee mentioned it took about 9 to 10 months to find a location. It could have taken two months, but they had negotiated different leases, and it was just taking longer.
Ghost Kitchen Franchise: What do you need to start this business?
Once this franchisee got the keys of the restaurant; in less than two weeks, they added papers to be able to start cooking. Moreover, everything can be manged with the iPad (the kitchen, food, employees, and more). In addition, it’s important to take into consideration additional costs such as, Uber Eats; other delivery services (they get about 60% of the revenue left); payments to the franchisor (10%); rent; employees; five professional cooks; one chef and four in-line cooks; electricity, and internet bills.
If the owner plans to cook, he could earn from $5,000 to $8,000, (if not more) per month. From our point of view, if you are interested in opening this franchise, you will need at least $100,000 to get started.
On the other hand, this franchisee expected to break even in three, up to six months from the operation, which it is not bad. He was excited about the different brands that the Local Culinary offered. He said it was about 30 brands, and it could go up to 50 potentially, depending on the location.
They boost that everything is automated: IT; no cash; video and cameras access through the tablet; the food and the ticket. As I mentioned before, you will need one main chef, a cook, and four line cooks that get paid in the $12 to $15 an hour range
The Local Culinary: Is it a Good E2 Visa Business?
If you look at this franchise on Google, you can see that they have a 3.6-star. The two co-founders rated it at five-star. In that case, you could bring that to more like 3.3.
It is still really an unproven concept. They are seeking investors from abroad to basically see the growth of this business as they cleared the 100 location mark. It is about $100,000 all-in investment. Per their FDD, it can go up higher, $200,000 or even more. But, if you already own a restaurant, it is going to be a lot less than $100,000.
They’re really seeking two types of owners: a chef-owner operator who spends a lot of time producing the food, and an investor (semi-absentee) that don’t know much about food but wants to be the boss. The franchisor advises them to spend five, or ten hours a week in the business, taking employments decisions, such as: directing, hiring, training or firing employees.
Summary
The Local Culinary is particularly targeting E-2 Visa investors. One of their founders actually came to the United States on an E-2 Visa from Europe. They are very familiar with the brand. They’ve had a lot of investors, they’ve told us, from France, Turkey, Egypt, as well as Canada. As of last year, they said that they had 45 locations, and about eight to ten of those were E-2 Visa investors.
Be sure, if you are seeking an E-2 Visa investment through this franchise, to talk to those eight or ten investors. See if they are happy with the business and if they would’ve done it again. The Local Culinary only have one corporate location in Miami, and as I reviewed, they had pretty lackluster reviews.
In addition, if you are interested in an E-2 Visa through the Local Culinary franchise, definitely get their franchise disclosure document, and review it with your franchise attorney. If you are committed to invest in it, contact us! We are pleased to help you.
