Five Guys has opened its first ghost kitchen, which only cooks food for delivery, as digital demand continues

• Five Guys has opened its first US ghost kitchen.
• There is no dining room and the location in Garland, Texas, cooks only food for delivery.
• Many restaurant chains have pivoted to ghost kitchens as demand for takeout boomed.

Five Guys has opened its first US ghost kitchen, which doesn't have a dining room and is tasked solely with cooking food for delivery.

Diners can get food from the Garland, Texas, location only if they order takeout on Five Guys' website or app or via a third-party delivery service like DoorDash, Grubhub, or Uber Eats.

The location is managed by Encore Restaurants, Five Guys' largest franchisee in the US.

Read more: Smashburger president lays out why the brand is looking for prime real estate, not ghost-kitchen space

Encore's president, Dale Doerhoff, said in a statement shared with Insider that the company was "confident this location will be a success," citing its knowledge of the local market and its experience with delivery-only sites during the pandemic.

Matt Reid, Encore's divisional vice president of operations, added that the new kitchen was "optimized for delivery with all the technology needed to keep food and labor costs down, maximize profit, and ensure high-quality delivery orders."

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.

They allow chains to cut costs and build their delivery capacity, or explore a new area, without opening a new restaurant, which would usually involve large outlays for real estate and staffing.

Other chains including Burger King, Wendy's, and even the grocery giant Kroger all have ghost kitchens.

Chipotle also opened its first dedicated ghost kitchen in New York in November after previously shunning the concept, telling Insider in 2019 that all Chipotle restaurants already had a separate kitchen solely for deliveries.

There's a business in providing real estate for ghost kitchens, too. Five Guys' new ghost kitchen is located in Garland's Revolving Kitchen facility, which rents out 25 commercial kitchens to catering services as well as restaurants that use the space to prepare online orders.

And 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 Noodles and Company executives said the fast-casual chain planned to use ghost kitchens to explore new markets - but it's not planning a major shift toward this concept anytime soon.