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Wednesday, August 18, 2021

CloudKitchens, the Global Ghost Kitchen Provider From Former Uber CEO, to Open Cleveland Facility This Fall

Posted By on Wed, Aug 18, 2021 at 12:35 PM

click to enlarge A Cleveland location of CloudKitchens will open on Carnegie this fall. - GOOGLE MAPS
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  • A Cleveland location of CloudKitchens will open on Carnegie this fall.
CloudKitchens, the international network of ghost kitchens operated by Uber co-founder and former CEO Travis Kalanick, has been quietly building out a Cleveland facility in MidTown. Located in the former Audio Craft building at 3915 Carnegie Ave., the 16,000-square-foot operation is expected to go live in late September or early October, according to company representative Megan Gilroy.

It will be the second CloudKitchens location in Ohio, joining a Columbus property that launched in March of 2019. That facility has 48 rentable kitchens compared to the 29 that will be available in Cleveland. According to Gilroy, the kitchens range from 210 to 280 square feet and can be leased by the year, the half-year or on a month-to-month basis.

CloudKitchens provides a “white box” space that includes gas hook-ups, sinks and a hood. There are options like a walk-in cooler available. The rest of the kitchen equipment is supplied by the tenants. No rent information was provided.

Like the location in Columbus, Cleveland’s kitchens likely will be rented by a mix of small start-ups, existing local restaurants, growing regional brands and large national chains.

“I would say probably it will be a higher numbers of locals,” Gilroy says. “We do have a few chains that will come in probably, but I also have a few local chains. But generally it’s higher local and goes from there.”

These facilities typically are located in less commercial areas with lower rents and property values, but near enough to large population centers that third-party delivery services like Uber Eats and DoorDash easily can reach. The anticipated delivery zone for the Cleveland facility stretches from Ohio City to the Heights. While the majority of the business is done via delivery, CloudKitchens do offer walk-up and pick-up service.

Ninja City co-owners Bac Nguyen and Dylan Fallon leased a 200-square-foot kitchen at the Columbus location and have been cooking for a little over a month. Nguyen says that the idea of a ghost kitchen was particularly appealing to him because it provided a low-barrier way to enter a new market.

“It’s something quick,” he explains. “It’s a much smaller investment and that's what’s attractive about the whole thing; you can get up and running in a matter of months with far less money than you would if you were trying to open your own ghost kitchen.”

He shares the facility with smaller outfits like a Jamaican food provider, large regional brands like Swenson’s and mega-chains like Wing Stop. All can be accessed through typical third-party delivery apps, but also through a shadowy portal called The Columbus Food Hall that makes no mention of CloudKitchens.

Nguyen says that CloudKitchens can and should do more to promote the smaller businesses within, who often struggle to compete with those high-recognition brands.

“It seems like a lot of the first-time operators – and I’m lumping ourselves into that group down here – start out slow,” Nguyen reports. “And it definitely requires a good amount of external marketing. The volume isn’t exactly what we hoped, but it’s what we expected.”

He adds that for his purposes – to test the marketplace, expand the brand and experiment with new food products – the kitchen has been a great fit. But he has no plans to sign on at the new Cleveland facility.

“The cost to get into this is not insignificant, but it’s low enough that if worse comes to worst, we still own all the stuff we bought, all the equipment,” he says.

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