Five Guys has opened its first ghost kitchen, which only cooks food for delivery, as digital demand continues

• Five Guys has opened its first US ghost kitchen in Garland, Texas.
• There is no dining room and the restaurant only cooks food for delivery.
• Many restaurant chains have pivoted to ghost kitchens as demand for takeout boomed.
• See more stories on Insider's business page.

Five Guys has opened its first ghost kitchen in the United States, which doesn't have a dining room and just cooks food for delivery.

Diners can only get food from the Garland, Texas location if they order take-out on Five Guys' website or app, or via a third-party delivery service like DoorDash, Grubhub, or Uber Eats.

The location is managed by Encore Restaurants, Five Guys' largest franchisee in the US.

Read more: Smashburger president lays out why the brand is looking for prime real estate, not ghost kitchen space

Encore President Dale Doerhoff said in a statement shared with Insider that the company is "confident this location will be a success," citing its knowledge of the local market and its experience with delivery-only sites during the pandemic.

As demand for fast-food takeout soared over the pandemic,

"Dark", or "ghost", kitchens have existed for years but these only really gained traction in 2020 during the pandemic and have since sprung up all over the world, as demand for fast-food takeout has soared.

Ghost kitchens mean chains can cut costs and build their delivery capacity, or explore a new area, without opening a new restaurant, which would usually involve large outlays for real estate and staffing.

Other chains including Burger King, Wendy's, and even grocery giant Kroger all have ghost kitchens.

Chipotle also opened its first dedicated ghost kitchen in New York in November after previously shunning the concept, telling Insider in 2019 that all Chipotle restaurants already had a separate kitchen solely for deliveries.

There's a business in providing real estate for ghost kitchens, too. Five Guys' new ghost kitchen is located in Garland's Revolving Kitchen facility, which rents out 25 commercial kitchens to catering services, as well as restaurants that use the space to prepare online orders.

And former Uber CEO Travis Kalanick created the startup CloudKitchens in 2016, which rents commercial space and turns it into shared kitchens for restaurateurs. It's now worth $5 billion.

Some chains, however, still see a future for dine-in services and aren't jumping on this particular bandwagon.

Smashburger told Insider it has an "aggressive" restaurant opening plan that involves snapping up prime real estate and building smaller restaurants in areas where orders are heavily skewed towards take-out or delivery, in place of ghost kitchens.

And Noodles and Company executives said the fast-casual chain plans to use ghost kitchens to explore new markets - but it's not planning a major shift towards this concept any time soon.