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How restaurants use real estate in the age of delivery and takeout

Restaurants are changing the way they use real estate as consumers demand the freedom to dine at home, at work or on the go.


March 29, 2020

Some are reengineering their reception and dining spaces for better circulation among diners, takeout customers and delivery drivers. Behind the counter, kitchen reconfigurations have helped sales of off-premises dining flourish alongside production for the dining room.

Chipotle Mexican Grill has eliminated kitchen logjams by introducing separate assembly areas for digital orders, including third-party delivery and takeout. These “second-make lines,” completed last year, helped the company grow its digital business to 20 percent of its total sales in the third quarter of 2019. The chain is trying out new restaurant designs in multiple markets to ease friction among diners, delivery drivers and takeout customers. Layouts under evaluation range from freestanding and end-cap stores with Chipotlanes for picking up online orders to an urban storefront with a walk-up window. Inside, customers can still see the kitchen, and self-service portals await pickup customers.

Tabassum Zalotrawala, Chipotle’s chief development officer, says these design changes help improve kitchen efficiency. “We didn’t change the size of our dining rooms, but the flow of the dining room and kitchen had to change,” she said.

David Orkin, an executive vice president and restaurant-practice leader for the Americas at CBRE, thinks others too will insulate main production areas from such takeout and delivery activities. “Kitchens had to be redesigned to accommodate all those functions, and if the restaurant has enough space, second lines or production areas have been added just to handle the takeout business,” Orkin said. Second lines are a logical next step to support off-premises-dining sales, he says, and they are more efficient than moving those operations off-site (continued below).

Ghost kitchens

Ghost kitchens (also called dark kitchens or cloud kitchens) offer turnkey setups that combine semi-private production lines with shared food storage, refrigeration and other facilities. Members can expect to pay more per square foot for a ghost kitchen than they would in a direct lease, but the setup cost is minimal, and they can ramp up production quickly.

“Think of us like a virtual food hall,” said Joy Lai, chief marketing officer of Los Angeles–based Kitchen United, one of the largest ghost-kitchen providers. The company says it plans to open about 400 kitchen centers over the next four years. Most of its centers measure roughly 6,000 to 10,000 square feet and can house about a dozen four-walled kitchens. The terms usually run for one year and typically include multiple renewal options. Among the available services are labor, assistance with operations, dishwashing and customer relations, and the provider handles the front-desk interactions with delivery drivers and takeout customers.


Emily HughesHow restaurants use real estate in the age of delivery and takeout