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Ghost kitchens on the rise in Memphis News

MEMPHIS, Tenn. – Memphis has long been known for its barbecue, but now many are choosing to get their food delivered through apps like Uber Eats, DoorDash and Grubhub.

You’ll find plenty of local favorites on those apps, but also unfamiliar ones including ghost kitchens.

Ghost kitchens or virtual brands are restaurants with no physical location that partner with existing restaurants to produce and sell menu items through delivery apps.

One example is the Perkins Restaurant and Bakery on Poplar.

The restaurant also sells food from a virtual restaurant called MrBeast Burger, one of the countless unusually-named delivery options from virtual brands available in Memphis.

MrBeast Burger was created by the most subscribed person on YouTube, MrBeast, and has more than 300 “locations” throughout the US.

It is far from the only ghost kitchen operating in Memphis, though.

Many restaurants in the area sell food from the virtual brands, which appear as separate restaurants on the delivery apps.

The IHOP on Showcase Boulevard sells products from four virtual brands.

“Any chef knows, if you have the ingredients, you can make so many different items of food,” Haaz Ilyas, the IHOP’s owner and operator, said. “That’s kind of what we are playing off of here.”

In addition to IHOP’s omelets and pancakes, Ilyas’ employees now prepare all kinds of foods for the virtual brands Pardon My Cheesesteak, Tender Fix, Thrilled Cheese and Super Mega Dilla.

Ilyas said IHOP partnered with other companies to have locations sell their food, showing that a physical location or commercial kitchen is no longer necessary to grow a restaurant business.

“We’re basically their kitchen,” he said. “We’re partnered with them in the sense that we are providing that for them, but they control the marketing, the pricing and all those things.”

Ilyas said the menus at the virtual restaurants he hosts were designed around the equipment and products already on-hand at IHOP.

The only new products he had to start stocking were provolone cheese and chipotle mayo.

“We have extra kitchen space and extra staff on hand that we are trying to give more hours,” he said. “This is another way for us to provide all those things.”

Ilyas said IHOP partnered with the virtual brands and began allowing stores to opt in to selling their food two months ago.

He chose to opt in because during the pandemic, the rise of delivery apps became a key part of the business and he wanted to continue capitalizing on the trend.

He has even converted an entire section of the store from dine-in seating to a delivery pickup station complete with an area for the drivers to sit and wait on their orders.

Ilyas said Memphis is one of the top areas in the country for delivery apps.

“Our take out business is at least 40%, which is an incredible amount,” he said. “I think the national average sits around 25%.

Ilyas said the profit margins for online delivery are smaller than in-person sales because the apps take a service fee.

The margins get even smaller with virtual brands because those companies get a cut as well.

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