Before you acquire a delivery-only food brand, verify these 20 critical checkpoints covering platform dependency, facility leases, gross margins, and brand transferability.
Acquiring a ghost kitchen requires a fundamentally different due diligence framework than buying a traditional restaurant. Without physical storefronts, foot traffic, or dine-in loyalty, buyers must assess brand strength through delivery platform ratings, revenue concentration across DoorDash, Uber Eats, and Grubhub, and the transferability of both the facility lease and the customer relationship. This checklist is designed for restaurant operators, food entrepreneurs, and roll-up acquirers targeting ghost kitchens in the $1M–$5M revenue range. Work through all five categories before submitting a letter of intent.
Ghost kitchens live and die by delivery platform performance. Validate revenue distribution, commission structures, and algorithmic visibility before anything else.
Request platform-by-platform revenue breakdown for the trailing 24 months across DoorDash, Uber Eats, and Grubhub.
Single-platform concentration above 50% creates existential revenue risk if algorithms or commission terms change.
Red flag: More than 70% of revenue flows through one platform with no diversification trend.
Obtain copies of all third-party platform merchant agreements and current commission rate schedules.
Commission rates of 20–30% directly compress margins; locked-in rates vs. negotiated rates materially affect EBITDA.
Red flag: Commission rates exceed 28% on the primary platform with no negotiated pricing tier in place.
Review monthly order volume trends and average order value by platform for the past 12 months.
Declining order volume signals weakening brand visibility or algorithm demotion before financials reflect the drop.
Red flag: Order volume declining more than 15% over the trailing two quarters on any major platform.
Confirm whether platform accounts and brand listings are transferable to a new owner entity.
Non-transferable accounts force a restart with zero reviews, eliminating the brand's core competitive moat.
Red flag: Platform terms of service prohibit account transfer and seller has not initiated a formal transfer process.
The facility agreement with operators like CloudKitchens or Kitchen United governs your ability to run the business post-close. Review every clause before signing.
Obtain the full ghost kitchen facility lease and identify all assignment, sublease, and transfer provisions.
A non-transferable lease can collapse a deal or force costly renegotiation with the facility operator post-close.
Red flag: Lease contains no assignment clause and facility operator has verbally declined transfer consent.
Confirm remaining lease term, renewal options, and any rent escalation clauses in the facility agreement.
A lease expiring within 12 months post-close exposes the buyer to displacement or unfavorable renegotiation.
Red flag: Lease expires within 12 months with no renewal option documented or verbally confirmed by facility operator.
Review all included kitchen equipment, shared-use schedules, and any exclusivity provisions for cuisine type.
Shared equipment and peak-hour conflicts can limit production capacity and cap revenue growth potential.
Red flag: No documented equipment list and seller cannot confirm exclusive use of cooking stations during peak hours.
Assess monthly facility costs including base rent, utilities, storage fees, and any variable platform fees charged by the facility.
All-in facility costs directly impact EBITDA; hidden fees routinely understate true occupancy expense.
Red flag: Facility charges undisclosed variable fees that increase proportionally with revenue, not reflected in seller's P&L.
Ghost kitchen profitability is driven by menu engineering and food cost discipline. Validate margins at the SKU level, not just the top line.
Request three years of monthly profit and loss statements segmented by platform and menu concept.
Blended P&Ls hide underperforming concepts; per-platform data reveals true profitability drivers.
Red flag: Seller provides only annual summary financials with no platform or concept-level revenue segmentation.
Calculate gross margin by menu category after accounting for food cost, packaging, and third-party commissions.
Gross margins below 50% after commissions signal structural unprofitability at scale for a delivery-only model.
Red flag: Blended gross margins fall below 50% and seller cannot identify which menu items or platforms are profitable.
Verify EBITDA add-backs including any owner compensation above market-rate replacement cost for an operator.
Owner-operators often understate compensation; overstated EBITDA leads to overpaying on a multiple basis.
Red flag: Seller's adjusted EBITDA includes add-backs exceeding 25% of stated EBITDA without supporting documentation.
Review food supplier invoices and vendor contracts to validate cost of goods sold figures in the P&L.
Food cost inflation risk and supplier concentration can materially change post-acquisition economics.
Red flag: COGS in the P&L is inconsistent with supplier invoices by more than 10% in any trailing quarter.
Without a physical location, ratings and reviews are the brand. Audit every platform's review history for consistency, authenticity, and trajectory.
Pull the complete review history and star rating trend for all active platform listings over the past 24 months.
Rating declines in the 6–12 months before sale often predict churn and reduced platform algorithmic placement.
Red flag: Average star rating has declined from above 4.5 to below 4.2 in the trailing 12 months on any major platform.
Evaluate whether the business has a direct ordering website or app with a documented customer database.
Proprietary ordering channels reduce platform dependency and significantly improve unit economics post-acquisition.
Red flag: No direct ordering channel exists and seller has no customer email list or reorder data outside platform dashboards.
Assess brand trademark registration status for the business name, logo, and any proprietary menu names.
Unregistered trademarks create post-acquisition IP risk, especially in ghost kitchen roll-up strategies.
Red flag: Brand name is unregistered and a conflicting trademark exists in any state where the concept currently operates.
Review customer reorder rates and average order value trends available through platform analytics dashboards.
High reorder rates confirm brand loyalty independent of promotional discounting or platform placement boosts.
Red flag: Reorder rate below 20% and seller attributes volume to ongoing platform promotional subsidies rather than organic demand.
Ghost kitchens often succeed because of a single operator's culinary skill or platform management expertise. Confirm the business can run without them.
Assess whether culinary quality, menu development, and kitchen operations depend entirely on the founding operator.
Key person dependency is the most common reason ghost kitchen acquisitions underperform post-close.
Red flag: Seller is the sole cook, sole platform account manager, and has no documented recipes or prep procedures.
Request a complete operations manual including all recipes, prep procedures, portioning guides, and platform management protocols.
Documented SOPs are the clearest evidence that the business can be replicated by a new operator or team.
Red flag: No written SOPs exist and seller estimates it would take six or more months to document all procedures.
Interview existing kitchen staff and assess their tenure, roles, and willingness to remain post-acquisition.
Staff continuity protects food quality and order fulfillment speed during ownership transition.
Red flag: All kitchen staff are part-time gig workers with no employment agreements and high turnover in the past year.
Evaluate the seller's willingness to provide a meaningful transition period, training, and a non-compete agreement.
A 90–180 day transition and geographic non-compete significantly reduce brand continuity risk post-close.
Red flag: Seller refuses to sign a non-compete or declines to commit to more than 30 days of post-close transition support.
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Platform revenue concentration is the single highest-priority item. If more than 70% of revenue comes from one delivery platform like DoorDash or Uber Eats, a single algorithm change, commission increase, or account suspension can destroy the business overnight. Always request a 24-month platform-by-platform revenue breakdown before advancing to LOI.
Yes, ghost kitchens are generally SBA 7(a) eligible as operating businesses with documented revenue and cash flow. However, the asset-light nature of the model means lenders will scrutinize EBITDA quality closely since there is minimal equipment or real estate to collateralize. Expect to contribute 10–15% equity and to address lease transferability before lender approval.
Look for three indicators: platform ratings above 4.5 stars maintained consistently over 24 months, a reorder rate above 20% demonstrating organic loyalty rather than promotional volume, and the existence of a direct ordering channel with a proprietary customer database. If all three exist, the brand has demonstrated it can survive beyond the founding operator.
The most common structure combines an SBA 7(a) loan covering 70–75% of the purchase price, a seller note of 10–15% bridging any valuation gap, and a 10–15% buyer equity injection. Earnout provisions tied to 12–24 months of post-close revenue retention are frequently added when the seller is also the primary operator, aligning incentives during the transition period.
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