Multiple menus and brands, one restaurant kitchen; 5 On Your Side digs into 'ghost kitchens'

5 On Your Side found an emerging food delivery trend that makes it harder to figure out where your food is really coming from.

The food delivery market more than doubled during the pandemic and all that growth helped fuel the rise in what’s known as "virtual kitchens" or "ghost kitchens."

Food from a virtual kitchen is cooked at a real, permitted restaurant, but it's sold under a different name and only exists online for takeout and delivery.

It can be a way for restaurants to sell more food, cater to more tastes and make more money.

Vladimir Mejia is from the Dominican Republic and manages The Dominicans Restaurant in Raleigh.

“We opened before the pandemic, right before, and it was tough to get business in,” Mejia told 5 On Your Side.

So, Mejia decided to take on virtual kitchens.

“During the slow times, like down hours, that helped a lot to pay the bills,” he said.

Mejia's business partner said it is also a way to saturate the market.

5 On Your Side tracked each of the virtual kitchens that The Dominicans Restaurant has taken on – 18 different kitchens in all. The kitchens account for about 30 percent of the breakfast options within six miles of its location on DoorDash.

A DoorDash spokesperson told 5 On Your Side, “Local and national restaurants across the country have adopted virtual brands to help them reach new customers, provide more selection in their neighborhoods, and grow their revenue in a cost-effective way. DoorDash is proud to partner with restaurants in a variety of ways, including through virtual brands, as we know each business has unique individual needs.”

“Yea, it’s impressive,” said Nextbite CEO Alex Canter when we told him how many virtual kitchens The Dominicans Restaurant was hosting.

Canter’s company sells the recipes that The Dominicans Restaurant uses for some of their 18 virtual brands.

“These menus are so streamlined and simplified,” Canter said. “They can actually re-purpose some of the same stuff that's already on one menu for another menu. It makes it easy for them to take on more than one of these virtual menus.”

"There's no limitation on the number they can have,” says Larry Michael with North Carolina’s Department of Health and Human Services. “There is no definition in our administrative codes. There's no defined 'ghost kitchen, virtual kitchen.'"

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You won’t find virtual kitchens on health inspection reports. Figuring out where the food is actually made involves cross-checking address information you can typically only find on food delivery apps, and sometimes those addresses are incomplete. It’s not even clear how many virtual kitchens there are in North Carolina.

Even with the few guidelines the state does have, it doesn’t appear all counties have been following them.

“If an establishment operates the virtual kitchen or ghost kitchen, then the local health department must be informed before they actually initiate that new service,” explained Michael.

Those are the steps the state expects local health departments to take, but when we asked Wake County and Durham County if they were doing that, they said they hadn’t gotten that guidance from the state.

After 5 On Your Side investigated, the state issued that guidance to all county health departments.

A NCDHHS spokesperson shared a copy of that guidance:

Good morning, I hope this email finds you well.

Virtual branding or “Ghost Kitchens” have gained in popularity over the last several years and have been one of the topics of discussion during regional meetings and conferences. For example, a panel discussion was held at the Food Safety and Defense Task Force’s annual conference last month and it has also been discussed at Food Service Advisory Committee meetings. However, most recently, there has been an uptick in the number of questions from local health departments regarding legal guidance on how to handle these marketing concepts. As you are aware, virtual kitchens are not defined, there is no authority to regulate such marketing concepts, and it is not addressed in the FDA’s Food Code; however, to help promote statewide consistency, we are working on written guidance that will be distributed soon to be included on an updated position statement regarding shared kitchens. In the interim please consider the following which is consistent with recent discussions:

The state is now working on developing more formal guidance.

Back at The Dominicans Restaurant, 5 On Your Side asked Mejia if people should be concerned by how many virtual kitchens his restaurant is hosting.

“Us personally, they shouldn’t be worried about anything because we try to keep everything on temperature, keep everything up to code. We’re on top of it, so they just shouldn’t be worried,” he said.

“It’s very helpful, I’m pretty sure I’m going to stick to this for a long time,” Mejia said when asked if he planned to continue this model.

To be clear, it doesn't appear The Dominicans Restaurant is doing anything they’re not supposed to. There are several other restaurants doing the exact same thing with virtual brands.

5 On Your Side also reached out to Lynn Minges, president and CEO at the North Carolina Restaurant and Lodging Association, about the topic.

“I did reach out to a few members following a model like this and asked how they're operating and inspected, and they told me that there seem to be some inconsistencies with the local health department when they come into inspect,” Minges said. “The business owner discloses that they are not only preparing the main thing on their menu but also a couple of other concepts and there seems to be some uncertainty around that simply because I don’t think there are good clear regulations in place that we need. We need standards statewide.

“The technology, the business model, emerged before the public policy caught up to regulate it, and I think that’s what we’re seeing here now,” Minges said.

Larry Michael from NCDHHS says North Carolina is looking to the FDA for guidance in setting rules and regulations for virtual and ghost kitchens.

The FDA is currently taking a long look at these concepts and gave 5 On Your Side this statement:

“The New Era of Smarter Food Safety Summit on E-Commerce in October 2021 brought together industry, consumers, academia and regulatory partners and gave the FDA much food for thought in the area of food e-commerce.  The agency’s focus before and after the Summit is on ensuring the safety of foods that are ordered and delivered online directly to consumers. Toward this endpoint, the FDA is actively at work identifying how best to address the outcomes of the Summit. 

As we learn more about the broad array of business models, our immediate focus is to first establish clarity around jurisdictional authorities. Other aspects that we are delving into include understanding the different business models that exist, including ghost kitchens, the safety risks associated with the sale of food through an e-commerce platform, how industry addresses these risks, the different types of delivery models that exist and risks around such models, and most importantly, understanding the regulatory landscape and what the regulatory community along with the FDA can do to address the gaps. We are not yet positioned to state specific actions the FDA may take or policies that may develop but can assure that we are working internally and will continue to engage externally with all representative stakeholders at the Summit for a path forward.”