Deal Structure Guide · Ghost Kitchen

How Ghost Kitchen Deals Actually Get Structured

From SBA loans to earnouts tied to DoorDash retention — here's how buyers and sellers in the $1M–$5M virtual restaurant space negotiate and close deals.

Ghost kitchen acquisitions present a unique structuring challenge: the businesses are asset-light, platform-dependent, and often built around a founding operator's culinary identity. With limited real estate collateral and revenue tied to third-party delivery platforms like DoorDash, Uber Eats, and Grubhub, traditional deal structures require meaningful adaptation. Buyers face uncertainty around brand transferability, lease assignability at shared kitchen facilities like CloudKitchens or Kitchen United, and the risk that order volume could shift post-transition. Sellers, meanwhile, struggle to command full-price all-cash offers when buyers can't physically inspect foot traffic or verify dine-in loyalty. The result is a market where deal structures almost always include risk-sharing mechanisms — seller notes, earnouts, or equity rollovers — that align both parties around a successful ownership transition. Understanding the mechanics of each structure, and knowing which fits your specific ghost kitchen's revenue profile, is the difference between a deal that closes and one that collapses in due diligence.

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SBA 7(a) Loan with Seller Note

The most common structure for ghost kitchen acquisitions in the $1M–$3M purchase price range. The buyer secures an SBA 7(a) loan covering 70–80% of the purchase price, injects 10–15% equity, and the seller carries a subordinated note for the remaining 10–15% to bridge any valuation gap. Because ghost kitchens have limited tangible assets to collateralize, SBA lenders will lean heavily on cash flow history, platform revenue documentation, and the buyer's food service operating experience when underwriting the loan.

70–80% SBA loan, 10–15% buyer equity, 10–15% seller note

Pros

Allows buyers to acquire an established ghost kitchen brand with 10–15% equity injection, preserving working capital for menu development and marketing post-close
Seller note signals seller confidence in the business's continued performance, which can be reassuring to SBA lenders during underwriting
Structured repayment over 10 years keeps monthly debt service manageable relative to the ghost kitchen's EBITDA, even at 15–20% margins

Cons

SBA lenders may require additional collateral beyond the ghost kitchen's assets, including personal guarantees or outside real estate, given the limited equipment and no owned property
Seller note is subordinated to the SBA loan, meaning sellers receive note payments only after primary debt service is met — creating cash flow timing risk for the seller
Ghost kitchen facility lease transferability must be confirmed before SBA approval, and a non-assignable lease at CloudKitchens or Kitchen United can kill the deal entirely

Best for: First-time ghost kitchen buyers with food service backgrounds acquiring an established single-concept or multi-concept operation with 2+ years of documented EBITDA above $200K

All-Cash with Performance Earnout

The buyer pays a compressed all-cash amount at close — typically at the lower end of the 2.5x–3.5x EBITDA range — and the seller earns additional consideration over 12–24 months based on revenue or order volume retention post-acquisition. This structure is particularly common when a ghost kitchen's brand is perceived as operator-dependent, when ratings have been inconsistent, or when a significant portion of revenue is concentrated on a single delivery platform. The earnout effectively transfers brand transition risk to the seller.

70–85% cash at close, 15–30% earnout over 12–24 months tied to revenue or EBITDA retention

Pros

Protects buyers from paying full price for a ghost kitchen whose DoorDash or Uber Eats revenue drops materially during the ownership transition period
Motivates sellers to support a smooth transition — training staff, maintaining recipes, and preserving platform ratings — since their earnout depends on it
Allows deals to close faster without the SBA underwriting timeline, which is valuable when a ghost kitchen facility lease is approaching renewal or a competitor is also pursuing the acquisition

Cons

Earnout disputes are common in ghost kitchen deals when post-close revenue declines are driven by platform algorithm changes outside either party's control rather than operational failures
Sellers receive less guaranteed cash at close, creating personal liquidity challenges if they need to deploy capital immediately after exit
Defining a fair earnout baseline is complicated by seasonal order volume swings, new competitor launches in the same delivery zone, and third-party platform promotional changes

Best for: Acquisitions where the seller is the head of culinary operations and key person risk is high, or where one delivery platform accounts for more than 50% of total revenue

Equity Rollover with Partial Buyout

The buyer acquires a majority stake — typically 75–85% — in the ghost kitchen operation while the seller retains a 15–25% equity interest, often for 18–36 months before a final buyout at a pre-negotiated or formula-based multiple. This structure is most common in strategic roll-up acquisitions where the buyer wants the founding operator to remain actively involved in maintaining culinary quality, managing kitchen staff, and preserving platform ratings during integration into a larger multi-concept operation.

75–85% majority buyout at close, 15–25% seller equity retained with buyout rights at 18–36 months

Pros

Keeps the founding operator financially motivated and operationally engaged during the highest-risk period of post-acquisition transition, directly protecting platform ratings and brand consistency
Sellers receive partial liquidity at close while retaining meaningful upside if the acquirer grows the concept through geographic expansion or additional platform launches
Aligns incentives between buyer and seller during the period when ghost kitchen revenue is most vulnerable to key-person-related disruption

Cons

Minority equity positions can create governance friction if the seller disagrees with the buyer's menu changes, pricing decisions, or marketing strategies post-close
Final buyout valuations are often disputed, particularly if the ghost kitchen's performance was mixed during the rollover period due to market or platform changes
Complex to structure legally — requires detailed shareholder agreements, buyout formulas, and clear definitions of operational decision rights during the rollover period

Best for: Roll-up buyers acquiring a ghost kitchen whose culinary brand is tightly tied to the founding operator's identity, or where the seller wants staged liquidity rather than a full exit

Sample Deal Structures

Established Multi-Concept Ghost Kitchen with Direct Ordering Channel

$1,800,000

SBA 7(a) loan: $1,350,000 (75%) | Buyer equity injection: $225,000 (12.5%) | Seller note: $225,000 (12.5%)

Seller note at 6% interest over 5 years, subordinated to SBA loan. Ghost kitchen operates three delivery-only concepts from a single CloudKitchens facility generating $2.1M in annual revenue with 22% EBITDA margins. Buyer is a restaurant group seeking to add delivery-only revenue without adding lease obligations. SBA lender required full documentation of platform revenue by channel and confirmation of lease transferability before approval.

Single-Platform Dependent Ghost Kitchen with Key Person Risk

$950,000

Cash at close: $760,000 (80%) | Earnout: up to $190,000 (20%) paid over 18 months based on quarterly revenue retention

Earnout triggered only if trailing 12-month revenue remains within 10% of pre-acquisition baseline measured quarterly. Seller agrees to 6-month paid transition consulting engagement at $8,000 per month included in the deal. Ghost kitchen generates $1.2M in revenue, 65% concentrated on DoorDash. Buyer compressed the headline multiple to 2.8x EBITDA given platform concentration risk and negotiated the earnout to protect against algorithm-driven revenue declines during transition.

Ghost Kitchen Roll-Up Acquisition with Founder Retention

$2,400,000 (at close for 80% stake, implied total enterprise value $3,000,000)

Private equity roll-up buyer cash at close: $2,400,000 for 80% equity stake | Seller retains 20% equity stake valued at $600,000 with buyout right at 30 months

Seller's 20% stake subject to buyout at 3.5x trailing EBITDA at the 30-month mark, with a floor of $550,000 and ceiling of $900,000 depending on performance. Founder remains as head of culinary operations with defined decision rights over menu, sourcing, and kitchen staffing. Ghost kitchen generates $3.2M in revenue across four delivery concepts with 24% EBITDA margins. Roll-up buyer plans geographic expansion to three additional metro markets within the 30-month period before final buyout.

Negotiation Tips for Ghost Kitchen Deals

1Request a full platform-by-platform revenue breakdown going back 24 months before any letter of intent — ghost kitchens can mask single-platform concentration behind strong top-line revenue numbers, and DoorDash algorithm changes can wipe out 20–30% of orders overnight without warning
2Always confirm lease transferability at the ghost kitchen facility before submitting an LOI — leases with CloudKitchens, Kitchen United, or local commissary operators are frequently non-assignable, and a failed transfer can collapse the deal weeks after exclusivity begins
3Structure earnouts around net order volume or platform-reported revenue rather than EBITDA, since post-acquisition cost structure changes (new staffing, rebranding, packaging) can artificially suppress EBITDA earnout targets in ways the seller has no control over
4Negotiate a seller consulting agreement of at least 90–180 days as a standard deal term, not an afterthought — ghost kitchens with owner-operated culinary identities see the sharpest rating drops in the first 60 days post-transition when the founding operator disappears entirely
5Push for access to third-party platform dashboards (DoorDash Merchant Portal, Uber Eats Manager) during due diligence, not just exported spreadsheets — live platform data reveals rating trends, promotional dependency, and customer reorder rates that sellers cannot easily manipulate
6If acquiring a ghost kitchen with thin gross margins below 55%, negotiate a purchase price adjustment mechanism tied to food cost audits at close — commodity price spikes in proteins and packaging materials between LOI and closing can meaningfully change the economics of the deal you originally underwrote

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Frequently Asked Questions

Can I use an SBA loan to buy a ghost kitchen if the business has no real estate or significant equipment?

Yes, SBA 7(a) loans are available for ghost kitchen acquisitions even without real estate collateral. SBA lenders will underwrite primarily on cash flow history, so you'll need at least 2 years of documented profit and loss statements broken down by platform. Expect the lender to require a personal guarantee, and be prepared to explain how the ghost kitchen facility lease will be transferred — a non-assignable lease is the most common SBA deal-killer in this space.

How do ghost kitchen buyers typically handle earnouts when revenue is controlled by platform algorithms?

The best earnout structures in ghost kitchen deals define a revenue baseline using the trailing 12 months prior to close and allow for a defined tolerance band — typically 10–15% decline — before the earnout is forfeited. Buyers should carve out algorithm-driven revenue changes as shared risk rather than purely seller risk, since no seller can guarantee DoorDash won't de-prioritize a listing. Some deals use order volume rather than revenue as the earnout metric to avoid distortion from delivery platform pricing changes.

What makes a ghost kitchen seller note attractive to SBA lenders?

An SBA lender views a seller note as a confidence signal — it means the seller believes the business will generate enough cash flow post-acquisition to repay both the SBA loan and the subordinated note. For ghost kitchens specifically, where revenue is less tangible than a brick-and-mortar restaurant, a seller carrying 10–15% of the purchase price in a note can meaningfully improve loan approval odds. The note must be fully subordinated to the SBA loan and cannot include principal repayment during the first two years of the loan period.

How does equity rollover work in a ghost kitchen roll-up acquisition?

In a roll-up structure, the private equity or multi-concept buyer acquires a controlling majority stake — typically 75–85% — at close and leaves the founding operator with a minority equity position for 18–36 months. This retains the operator's culinary identity and platform relationship management during the integration period. The minority stake is then bought out at a pre-agreed formula, usually a multiple of trailing EBITDA, giving the seller a second liquidity event if the roll-up has grown the concept successfully.

What happens if the ghost kitchen facility lease can't be transferred to the buyer?

If the facility lease — whether at CloudKitchens, Kitchen United, or an independent commissary — cannot be transferred or assigned to the buyer, the deal structure must account for this risk. Options include negotiating a new lease directly with the facility operator as a condition of close, structuring a sublease through the seller's existing entity during a transition period, or relocating the ghost kitchen operation to a transferable facility before closing. Buyers should never assume transferability — lease review should be one of the first due diligence items completed after LOI signing.

Is a ghost kitchen worth more if it has a direct ordering website in addition to delivery platform revenue?

Yes, significantly. A direct ordering channel — whether a branded website or proprietary app — reduces the 20–30% commission drag from DoorDash, Uber Eats, and Grubhub, improving gross margins materially. Buyers and brokers will typically assign a higher EBITDA multiple to ghost kitchens where direct orders represent 20% or more of total revenue, since it demonstrates platform-independent brand strength and creates a more defensible, higher-margin revenue stream. Sellers who invest in building a direct channel 12–18 months before going to market can meaningfully improve their exit valuation.

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