For consumers, a cloud kitchen is a restaurant with no physical space, such as dine-in or takeaway facilities. It is a kitchen that does not need waiters or reception. It depends on home delivery and, when needed, can serve as a backup kitchen.
All these concepts apply to the same food-tech concept: a virtual restaurant that sells meals exclusively via online delivery systems. Cloud kitchen, virtual kitchen, dark kitchen, ghost restaurant, dark kitchen, delivery-only restaurant, virtual restaurants, or even restaurant-as-a-service/ RAAS. These restaurants rely primarily on online distribution sites or their own delivery networks for sales. UberEats, JustEat, FAASOS, Swiggy and several more are among the best online distribution channels.
Cloud Kitchen Vs Dark Kitchen Concept explained
For a cloud kitchen, some top options for parcel delivery are Swiggy, Zomato, and FoodPanda. A cloud kitchen’s critical benefit is that they can bring multiple brands under one roof, dramatically reducing costs. All F2F (face-to-face) interaction has been removed between customers and restaurants. In order to sustain and meet challenging customers, the cloud kitchen business model harnesses cutting-edge technology and new marketing strategies. The ghost kitchens are built for distribution and ordering exclusively online. There are no brick and mortar units in these online restaurants. No servers are open, only shared kitchens.
Dark kitchens require shared space for officials. Without property investment expenses, there is a shared kitchen area for restaurants to play with new menu items. Delivery only, these businesses are established to accommodate to orders from a custom website or third-party platform for delivery marketplace. This latest online-restaurant model can be used effectively by your business. To set up your own cloud kitchen company, rely on strategists and specialists from food technology consultants and leverage their expertise.
For the dark kitchens, this has paved the way. These third-party distribution networks work to connect food companies with customers and quickly deliver meals. The cloud kitchen is where food is created and delivered through online ordering platforms and calls at the doorstep. The delivery of food from the dark kitchen does not rely on conventional models, such as takeaway and dine-in. The dark kitchen model is focused solely on the preparation and distribution of food, plus tie-ups with platforms for food delivery.
Benefits of Cloud Kitchen Business
The demand for online food delivery is expected to grow from a $40 billion industry to $380 billion by 2030, globally, and food delivery revenues in restaurants are more than three times the pace of on-site revenue. In view of the high rents and the rapidly tightening margins, restaurant operators are now absolutely closing the storefront and heading into the more economically viable business of Cloud Kitchen. Cloud kitchens are thus becoming the need of the hour. Low investment and risk, along with the ease of replicating and scaling the business, make cloud kitchens one of the food industry’s most profitable food business formats.
5 things you need to consider opening cloud kitchen business in India.
Location & Property
The largest differentiators between a conventional dine-in/takeaway restaurant and a cloud kitchen are undoubtedly the place and property. A cloud kitchen does not need a high cricket stadium location and the place of the prime land. Instead, as there is no front of the building, it can quite easily be set up in a 250-300 sq ft room.
The cloud kitchen, especially for a specific kitchen, can be in a fairly inaccessible place, but with high customer demand. A great cloud kitchen place is made up of suburban neighborhoods, market backsides, unused parking lots. You may also opt for a shared kitchen space instead, as this tends to decrease initial investment.
It is necessary to obtain proper licenses and certification to open a cloud kitchen for several reasons. Second, you can be spared from legal troubles by keeping the licenses in order. Secondly, since customers are unable to visit the outlet themselves for hygiene, food protection and preparation inspection, proper licensing gives them a feeling of satisfaction. To persuade your clients that you cook high-quality food, you can promote them on your website and in your marketing campaigns. FSSAI, GST Registration, NOC from the fire department, etc., are the main licenses needed to start a cloud kitchen company.
Packaging & Kitchen Equipment
The equipment in the kitchen depends on the type of cuisine you serve. The basic facilities needed to start a cloud kitchen are stoves and ovens, refrigerators, knives, etc. Here is a complete list of kitchen equipment to run a food delivery company.
Packaging is a critical component of running a food company. It would end up ruining the whole customer experience, no matter how good the food is, and give the business a bad reputation. Packaging depends on the form of food as well. To guarantee proper food packaging, you’d need plastic containers, bottles, spoons, etc.
Since there’s no House Front, in your cloud kitchen you don’t need a lot of people. You can easily open a store with only 2-3 people focused on preparing and selling food. The same chef can cook food for several brands when you have many kitchen brands. It is better to start with a small team, and as incoming order volumes rise, you can add more employees.
As there will be workers, the business owner would take care of all applicable rules and laws in order to remain compliant. An necessary and critical part of the organization is skilled tax registration, TDS, PF, payroll and salary calculation.
Salary accounts, PF, etc: Unfortunately, this is the last thing most cloud kitchen owners do as blue-collar staff are not too worried about paying taxes and receiving the Provident Fund. It’s necessary to start the cycle from day 1 if you’re in serious business with a long-term objective. In the long run, it allows the team to establish trust and friendly relationships with everybody.
Marketing online & Generating orders
Generate online orders for your cloud kitchen company once you’ve set up the kitchen and staff. Since there is no dine-in facility in a cloud kitchen and relies exclusively on online and telephone food orders, spending on promoting the brand of food delivery is significant, at least in the initial days. Online marketing is relevant in this scenario without a shop with no display boards and signage.
- a) Listing Your Cloud Kitchen On Online Food Aggregators
- b) Promoting Your Cloud Kitchen On Online Aggregators
- c) Social Media Marketing
- d) Search Engine Optimization
- e) Loyalty Programs And SMS & Email
5 important paper works required before starting cloud kitchen startup franchise in Bangalore.
- FSSAI: Food Safety and Standards Authority of India. For food-related business in India, FSSAI licenses are compulsory and must be obtained on behalf of the company and its owner. The term of the license can vary from 1 year to 5 years and must be renewed before the expiry date. In order to create trust in our clients about our deals, it is also good to mention FSSAI on the packaging and invoice.
- GST: For every business in India, GST registration is mandatory and it is also recommended that all company-related taxes be filed on time. It is appropriate to apply GST regularly, quarterly and annually. GST also helps to procure licensed vendors, so if both parties have a GST number, it lowers the tax amount. We can apply for a GST number upon obtaining a bank account.
- Trade License: Every organization needs to have a trade license, and the cloud kitchen does the same. This can be achieved by furnishing all necessary documentation from the local municipal office. In addition to the expense, to get the job done, we would need some extra money. It is a one-time work and a compulsory form of legal action.
- Fire and Safety License: Now, starting with it is not mandatory, but it is nice to save yourself from potential problems. This is part of the regulations, and with every workplace, fire and human health agreements are mandatory.
- Trademark registration is also very important for the cloud kitchen sector because this company’s philosophy does not allow the customer to move in, so the company’s brand name is the HERO of the customer. The company owner must file trademark applications for the logo, name, wordmark consisting of various colors, patterns in order to establish their distinctive identity on the market in order to protect the brand.
Required technology – Cloud kitchen business model
In order to generate orders, since a cloud kitchen usually relies on online food websites and mobile apps, technology plays a crucial role in this business. To accept online orders and support operations, a cloud kitchen includes an integrated online restaurant ordering system.
Although low risk and high profit are involved in cloud kitchens, one should be alert to the competition ahead to make profits. The next theme will be the cloud kitchen. The cloud kitchen is the better and wiser option if you want to expand your business or launch a food channel, provided that you keep it compliant.
Food Delivery optimization
Only one aspect of the food distribution sector is the preparation of food when producing orders. The bigger challenge here is ensuring that your food is delivered on time and in excellent condition to your customers. You can either tie-up with third-party aggregators or logistics firms or have orders fulfilled by your in-house food delivery fleet. In ensuring a great delivery service, packaging plays a crucial role. When it is shipped to the consumer, you need to promise that the food has been prepared and handled properly.
Throughout the world, cloud kitchens are hitting gold and have come up with their own pros and cons. Before you plan to start your own cloud kitchen branch, you need to recognize and evaluate your priorities, money, technology, and strategy. If you have an understanding, dream, and passion, then become part of this market with your own start-up business. Otherwise, enjoy the mouth-watering treat of these cloud kitchen portals online. Cloud kitchens and virtual brands have allowed entrepreneurs to simultaneously test, learn, and expand their established brands and launch multiple new brands. On this megatrend, larger brands that do not concentrate on their virtual kitchen strategy to boost their growth would lose out.