Noodles and Company
- Noodles and Company is testing a ghost kitchen in Humboldt Park, Chicago.
- You can only get food from there through Noodles' website and app or via DoorDash and UberEats.
- Noodles also has plans for a ghost kitchen in San Jose, which is a new market for the chain.
- See more stories on Insider's business page.
Fast-casual chain Noodles and Company is testing its first ghost kitchen in Humboldt Park, Chicago.
The location doesn't have a dining room and is tasked solely with cooking food for delivery and collection.
Diners can get food from the location only if they order through Noodles' website or app or via third-party delivery services DoorDash and UberEats.
Execs from the company previously told Insider it plans to use a mixture of ghost kitchens and franchise restaurants to dip its toe in new markets – but it's not planning a major pivot to ghost kitchens any time soon.
Noodles, which already has 20 locations in the metro Chicago market, said that by launching a ghost kitchen it can expand the brand without the higher overhead, real estate, and labor costs of a traditional restaurant.
Carl Lukach, the company's chief finance officer, told Insider that its choice of Chicago means there would be wide brand recognition in the site's catchment area, but that the kitchen's location in a more industrial area means it won't cannibalize sales at other Noodles restaurants.
Noodles also has plans for a ghost kitchen in San Jose, which is a new market for the chain. Lukach said that Noodles can use ghost kitchens in new markets to understand the location before it moves in with a freestanding restaurant.
The launch of its first ghost kitchen as demand for delivery and collection continues to boom even as the US economy reopens.
Digital orders account for nearly two-thirds of Noodles' total sales after more than doubling during the pandemic.
Ghost kitchens, also called dark kitchens, have existed for years but only really gained traction in 2020 during the coronavirus pandemic. They have since sprung up all over the world as demand for food delivery has soared.
Other chains, including Burger King, Wendy's, Five Guys, Chipotle, and even the grocery giant Kroger, all have ghost kitchens.
There's a business in providing real estate for ghost kitchens, too. 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 had an "aggressive" restaurant-opening plan that, in place of ghost kitchens, involved snapping up prime real estate and building smaller restaurants in areas where orders were heavily skewed toward takeout or delivery.
And Panera Bread said that, while more customers are ordering digitally, it's still betting on people wanting to dine in. It unveiled an overhauled cafe design this week with a range of features to attract dine-in customers, including digital order boards that tie in to your loyalty account, exposed ovens so you can watch the bread baking, and a natural, earthy design.