A One Question Friday episode where listener Brian, a restaurant operator who improved his margins 450% using ghost kitchen concepts, asks how to scale his model by licensing it to other restaurant operators. Sam and Shaan recommend following the Alex Hormozi / Gym Launch playbook: instead of franchising the restaurant, sell the system — either as a course or a done-for-you service on a revenue-share basis. They then explore other industries where the same model could work.
Speakers: Sam Parr (host), Shaan Puri (host), Brian (listener, ghost kitchen operator)
One Question Friday Intro [00:00:00]
Shaan: All right, this is One Question Friday, where we answer a grand total of one question from a listener. One lucky listener gets to ask a question, and me and Sam are going to give our raw, off-the-cuff answer. We haven’t seen the question before — Jonathan has it. These are tips, and they are just the tips, as I like to say. We try not to go too deep. All right, Jonathan, you want to hit us with a question?
Brian’s Question: Ghost Kitchen Licensing [00:00:25]
Guest (Brian): Hey guys, my name is Brian and I’m calling about ghost kitchens. I first learned about ghost kitchens on the pod, so thanks for that. I developed a model to implement a couple of ghost kitchen concepts into my restaurant. I had great success — lifted my margins over 450% over six months with just one of the concepts. Now I’m looking to scale the business by offering licensing agreements for operators in other markets to use these concepts, including the branding, recipes, etc.
It’s very simple: you find an operator that wants a new revenue stream and wants to do a ghost kitchen, and they can start slinging product within a matter of weeks. I’ve researched the model that much larger companies are using, where they leverage celebrities to sell these concepts. My model is better, it’s cheaper, and the recipes are second to none in the space. Assuming you didn’t have the following and the platform that you do, how would you go about selling this idea to restaurant operators across the nation? Where would you start?
Sam: What’s his name, by the way?
Shaan: We’re gonna call him Joe. No — I don’t remember.
Sam: Thanks for the question, Ryan. Two weeks in a row we have one question and we do not know the guy’s name again.
Recapping the Ghost Kitchen Business [00:01:20]
Sam: It sounded smart. It sounded like he’s got his game plan together. Let’s recap — the business is what, exactly? Here’s what I understood: he owns a restaurant, and then he added in a ghost kitchen, meaning he created a ghost brand. What that means is, if you go on DoorDash or Uber Eats or one of these delivery apps, you can order from a restaurant — but there’s no physical restaurant for that thing. It’s just a virtual brand, and his actual restaurant does the packaging.
So let’s say my normal restaurant is Shaan’s Pizza. Well, then I could also have a ghost brand called, you know, Silly Sandwiches. And if I get an order from Silly Sandwiches, my restaurant crew will just package it up as a Silly Sandwich order and it’ll be ready to go. So I’m kind of running multiple restaurants out of one restaurant. That’s the idea.
Shaan: And why does the restaurant owner want to do it with him versus on their own?
Sam: I’m not sure if he created that ghost brand or he added someone else’s ghost brand. But he said it improved his restaurant margins 450%. So he basically 4x’d his restaurant’s margin. Let’s say a normal restaurant has — I mean, it sounds a little unbelievable, right? Let’s say he had 6% margins before. He’s saying that basically 4x’d his margins. I’m not sure exactly what he’s talking about, but that’s cool.
The Gym Launch Parallel [00:02:30]
Sam: You know what business would be way better? Do you remember Alex Hormozi’s business?
Shaan: Gym Launch.
Sam: Gym Launch. Exactly what I was going to recommend. Go ahead.
Shaan: Well, I think — maybe you weren’t going to say this — I was going to say go listen to the episode. What his model was: he had a gym, and he figured out a sales method to get his gym to have a bunch of customers paying high prices and making a bunch of money. And his friend at a mastermind one day was like, “Yo, you don’t need to open up 50 gyms doing this. You need to go teach other gyms how to do this. Your product isn’t the gym — it’s a sales process to make any gym more profitable.”
So that’s what he did. He created Gym Launch, which would basically advertise: “Hey, are you a gym owner? I can help you make an extra $100K a year, guaranteed.” Using his sales method to get you more customers paying higher prices. They’d be like, “All right, cool.” And then he would fly out to that gym and spend the next couple of weeks implementing that process. He’d teach them: here’s your offer, here’s your Facebook ads, here’s your sales script when they come in, here’s how you close them, here’s how you upsell them protein powders and training packages. That’s the sales process. And he built a multi-million dollar business doing that.
If you did that for restaurants — to teach them how to do this ghost kitchen thing — that sounds like a business. That’s what I would do.
Sam: 100%. No-brainer. Except — you said Alex would fly out there. Eventually he wasn’t actually flying out there. It wasn’t quite fair to call it a course, but he would teach you stuff and also be like: “Here’s the Facebook ads — I’ve already made them for you. Here’s the drip email sequence. Here’s the script we use. Here’s everything.” And then he’d say, “Oh, by the way, if you don’t want to do it yourself and you just want me to run the ads, fine — pay us and we’ll do it. And here’s how you sell protein. You want to sell protein? The protein that sells best, we already went and bought it. So if you want to get on a subscription, we’ll just send it to you, and here’s how you sell it — or we’ll just go ahead and do all that for you.”
So I would 100% do that business.
Shaan: And on that pod, we asked Alex: what’s a good market for Gym Launch? We actually didn’t have that many good answers. The answer is this restaurant business. This is the answer. This is a great example. And lucky for our buddy here — Ryan, we’re calling him for a second — there’s a pretty great blueprint to follow. Like there’s a blueprint that Alex was very public about on how he did it. He’s now exited the business, and by the way, this is what his business does now: it invests in other people doing this model. He’s like, “I already know how to do this, I can scale it up.” You have to be at some scale before he’ll do it, but he gives away the free content on how he structured Gym Launch.
How to Execute the Restaurant Launcher Model [00:05:00]
Shaan: So I think that’s what you should do: Restaurant Launcher. The Ghost Kitchen System. Which is basically: “Hey, if you’re an independent restaurant — and trust me, it’s tough. Foot traffic is tough, everyone’s ordering delivery. Here’s how you can increase your margins. Here’s how I did it.” You kind of open up your financials and say: “Look, I was making $32,000 a quarter doing it this way. Now I make $58,000, and that extra bit is from my ghost kitchen concept. Here’s how I do it.”
And basically they can either pay you for the course on how they can do it themselves, or you hit them with the Alex Hormozi offer: “If this sounds too complicated, I can also do it for you. And if you qualify, I’ll do it for you.”
Sam: What Alex did was risk-free. His offer was: “You pay me nothing. I only get money once I’ve increased your sales by over $30,000. So once you’ve made that much more money off this, then I get my cut — 30% of whatever the total increase is. And I’m so confident I’m going to raise your sales that I’ll take the risk on that. How does that sound?” And they’re all like, “Yeah, you’re going to fly out here, you’re going to implement your process, it’s worked for you, and I only pay you once I’m making all this extra money?” That’s a pretty damn good offer.
So you could do a similar thing for the restaurant. I saw a guy the other day doing a sales process exactly like this. Let’s just say the restaurant owner was like, “I don’t know if I want to do that.” And he goes, “That’s fine. But how about this — you implement what I say, and if it works, I get a split of the revenue.” And the guy goes, “Great, I’m 100% in. What’s the split?” And the seller goes, “How about 50/50?” And the buyer goes, “I don’t know, man, that’s a lot.” And the seller goes, “But it’s free money for you — I’m doing all the work.” And the guy goes, “Well, what if it blows up? You’re gonna get a lot of money.” And the seller goes, “You know what, you might be right. Fine — we’ll go back to the original deal. You just pay five thousand dollars.” And the guy goes, “Okay, fine.”
It was like the best sales sequence. It totally worked. I was like, oh my god, that’s beautiful.
Shaan: Yeah. I would totally do this business as well. I think that’s way better. I would continue running the main restaurant thing just so you’re in the know and getting results you could post to social media. But that’s what I would do.
Sam: Is that it? Is that the answer? Just the tip?
Industries Where This Model Works [00:08:30]
Shaan: All right. You said nothing jumped out when you were talking to Alex — are there any other industries that jump out now that this could work for?
Sam: Probably physical. Probably physical therapists. I would imagine doctors’ offices and physical therapists. Maybe barbers. Real estate brokers.
Shaan: So every real estate broker is kind of running their own little small business — sometimes as part of a brokerage, sometimes their own brokerage. And there’s a whole process to basically say: “Hey, you should leave Coldwell Banker. They’re taking half of your commission. I spun out my own — here’s how I did it, here’s how much more I make. And I will spin you out of this big brokerage firm. I’ll set up your website, your back office legal structure, your marketing package, show you exactly how this all works. And instead of Coldwell Banker taking half of your commission, I will take 5% of your commission to do this.”
I think selling a sales system is a pretty good business to be in, in general.
Sam: Yeah, it’s very high margin. I think a lot of course businesses top out at a certain level. But when you’re selling a sales system or a sales product like this, I think the cap is way higher.
Recycling Exited Businesses [00:10:00]
Sam: By the way, also — now that Alex Hormozi’s not doing Gym Launch, you could also just do Gym Launch again. Like, he put a playbook out there, he exited the company, it’s still running but he’s checked out doing other things. You could literally recycle his business.
I think this is so underrated — just recycling business ideas once the person has exited and you know they’ve let their foot off the gas, or they’ve expanded and moved up market. They just leave you an exact playbook on what to do. And more often than not, the timing still works.
Shaan: Dude, at The Hustle we had a few companies that would just copy and paste our content and create a new newsletter. And some of them got traction.
Sam: Edit that out — I don’t want people doing that now.
Shaan: Well, it doesn’t work in the end. It’s a very short-term thing.
Sam: All right, that’s it. You got the tip.