Big city restaurants are surviving by going tiny and renting shared space — but a brick-and-mortar may be the key to longevity

This article is part of “Made to Order,” a series highlighting the business strategies driving today’s food industry.

On a good day, Noah Clark prepares 30 bento-box-style meals — but the Box Chicken chef won’t see a single customer.

His restaurant, which serves the Japanese soul food he grew up eating, is a “ghost kitchen,” meaning he fulfills online orders only. He breads and fries chicken and carefully fills each box with sides, including his grandmother’s potato salad recipe, out of a 200-square-foot space that I visited on a Wednesday afternoon in February.

Clark’s tablet chimes every time an order comes in. He works carefully but efficiently, packing, sealing, and labeling a substantial box of fresh food in about three minutes. The final step is placing the order on a robot, which delivers the bag to a smart locker on the first floor where an Uber Eats or Doordash driver will retrieve it.

Box Chicken operates out of a West Los Angeles CloudKitchens location. The three-story building houses a handful of other restaurants — Clark’s “neighbors,” as he refers to them. “It’s like an apartment complex — people have to move out because they couldn’t pay the rent.”

That’s happened a lot lately, he told me, and his part of the neighborhood on the second floor is eerily quiet. If it weren’t for the interview, his kitchen would be even quieter. It’s a one-man operation.

In some ways, the solitude is nice, Clark said, “but, as a business owner, I see where it’s hurting us.” Without a storefront, he lacks visibility and brand recognition. He has to rely on creative, grassroots marketing tactics, such as approaching strangers in public and asking them to taste-test his chicken on camera for a social media campaign. That’s how I first heard of Box Chicken — on the Santa Monica Promenade when Clark was handing out free samples.

Running a digital restaurant

Clark, 34, has been working in restaurants since he was 8 and earned an allowance helping out at his family’s chicken restaurant in Atlanta. His mother, Reiko Clark, and aunt, Maggie Antoine, opened their first store in the late 1990s. They closed during the financial crisis in 2008 but reopened nearly a decade later in 2017, at which point Clark was old enough to take on more responsibility in the kitchen.

The family business was beloved, busy, and eventually expanded to multiple locations throughout Atlanta. The only slow day of the year was the Super Bowl, Clark said: “Not one order came through because everyone’s locked in.” It’s different in Los Angeles. Box Chicken opened its ghost kitchen doors last year and doesn’t yet have a cult following. “I miss the stressful environment, I miss seeing a line, I miss seeing all the tickets printed,” he said.

However, the smaller kitchen space, which Clark designed and outfitted with equipment himself, has allowed him to open and survive in an expensive and competitive market that he never wanted to be in. His family was forced to sell their original restaurant in Atlanta to their business partner and main investor after a messy split, and the noncompete agreement limited them to operating in two states: California and Hawaii, which, as a restaurateur, are “the two hardest places to open,” Clark said. He and his family chose to bring their food to LA, where Reiko and Maggie grew up and originally conceived their chicken tender recipe.

While studying successful LA-based restaurants, Clark came across Main Chick, which began as a ghost kitchen before expanding to multiple locations and becoming a fixture of the food scene in Southern California. He was convinced a similar strategy could work for Box Chicken.

Running hypothetical numbers solidified his decision.

“We were looking at a brick-and-mortar on Sawtelle and the rent was like 16 grand or something, maybe even higher. It’s like, how are these places surviving? And they’re not. They’re always closing,” Clark said. “So, it is definitely cheaper.”

Plus, as a one-man kitchen, he eliminates a major industry expense: labor.

Zeus Ferrini, the cofounder of the Los Angeles-based pop-up The Arepa Stand, said that’s his main expense. “Most of your money goes to pay your employees.”

The challenges of operating without a brick-and-mortar

Ferrini and his sister, Mercedes Rojas, started selling traditional food from Venezuela, their home country, at the Mar Vista Farmers Market in 2019. Six years later, they have 12 staff members who help them operate in six different farmers markets.

They don’t have a brick-and-mortar, either — they prep in a shared commercial kitchen space that they rent by the hour — but their issue isn’t a lack of interaction with customers. It’s scalability.

The pop-up model allowed them to launch on a shoestring budget — they spent about $400 on ingredients and a couple of coolers for their first market — and test their concept before putting up more of their own savings and quitting their jobs. For about a year, they did all of their prep out of the kitchen of their shared apartment before transitioning to the commercial space. While renting a shared kitchen two days a week is cheaper than having their own storefront, it’s hard to tell how much money it’s really saving.

“We do prep Thursday and Friday, but we’re not actually making any money those days,” Ferrini said. They do some catering, but the majority of their revenue comes in on the three days of the week they’re at the markets: Saturday, Sunday, and Tuesday. “It’s not like a regular restaurant where they’re making the prep in the back, but they’re also selling at the same time. That’s the downside.”

Plus, their market revenue is capped. “You can only sell so much that one day,” Ferrini said.

As a pop-up restaurant, it’s easy to get “stuck,” added Rojas, who attended culinary school in Miami and spent a decade training under chefs at various restaurants across the US before opening The Arepa Stand. Setting up and breaking down multiple stands is time-consuming and logistically complex.

“It deviates from opening the restaurant,” she told me while cooking arepas and frying eggs from behind their booth at the Playa Vista Farmers Market on a Saturday morning in March. She’d typically be driving back and forth between their weekend markets and overseeing operations but a staff shortage meant she was an integral member of the three-person team cranking out arepas from 9 a.m. to 2 p.m. that particular day.

A hybrid approach

Gus May and Ana-Maria Jaramillo, who made the leap from a nomadic pop-up in 2019 to a storefront in 2022, can’t imagine continuing to grow their breakfast taco concept in Washington, DC, without a permanent space.

“Having a brick-and-mortar presence is absolutely essential to La Tejana’s longevity,” May said. “The pop-up model is great as far as keeping overhead low, testing out your product, and for growing your brand, but the amount of work required to pull off a single pop-up is far greater than the work required to open up for service at a brick-and-mortar.”

It’s also created more consistent revenue — “you could be planning a huge Saturday sales day and a storm swings through and slashes your projected sales by 80%” — and more revenue, May said. However, their expenses, particularly labor, are much higher. “We went from two part-time employees to a staff of 18 in a matter of a few months. Our profit margin percentages are less, but our overall revenue is way up. I think this is probably true across the industry.”

Both Box Chicken and The Arepa Stand hope to open their first storefronts in Los Angeles this year. When they do, they plan to keep at least a version of their current setups.

The farmers market pop-ups will help get people in the door, Ferrini said. “Since we’re in different parts of LA, you can funnel all those people coming to the farmers market to the brick-and-mortar — and that’s the plan.”

Clark envisions Box Chicken locations all over the world, with ghost kitchens helping fulfill online orders and free up time and space for the physical locations to take care of its regular customers.

They have big dreams but aren’t delusional. Clark is reminded more often than he’d like that sustaining a profitable restaurant is incredibly difficult as he watches his ghost kitchen neighbors shutter their doors. For Ferrini and Rojas, making the numbers work is so challenging that they’ve continued doing pop-ups for six years while dreaming of an eventual brick-and-mortar.

In the meantime, they’ll keep making hefty, colorful arepas.

“Even though it’s a hard industry to be in, it’s also a very beautiful industry to be in at the same time,” said Ferrini. “It’s nice to see the different people around that love your product and stop you on the street and are like, ‘Oh my God, we love your product.'”