How to Start a Cloud Kitchen in Dubai
The global market for online meal delivery is projected to reach 365 billion dollars by 2030. According to food delivery statistics in the UAE, the food delivery business is projected to increase at a pace of 6% annually over the next five years. This growth is anticipated to continue rapidly, making it quite profitable.
Many food service providers in the United Arab Emirates (UAE) are presently shifting to online delivery models or cloud kitchen models, both of which have shown to be more lucrative. This is owing to rising rents, evolving client preferences, and a typical restaurant’s tight profit margins.
For many years, the United Arab Emirates (UAE) has been home to a substantial and thriving food industry. And because of that, savvy investors know how to capitalize on this opportunity by obtaining a cloud kitchen license in Dubai.
Covid-19 has only helped to drive this rise, as restaurant owners increasingly resort to food delivery to retain or augment their income in times when customers are increasingly opting to eat in.
In this guide, we will be looking at the reasons why recently cloud kitchen in Dubai has been so popular among small investors, and how to set up a cloud kitchen in Dubai, UAE.
What is a Cloud Kitchen?
The restaurant idea known as a cloud kitchen, sometimes known as a virtual restaurant, ghost kitchen, or dark kitchen, focuses only on meal delivery and has no facilities for dine-in guests. With cloud kitchen models, orders may be made through a variety of internet channels, including websites, mobile apps, third-party platforms, and even phone lines.
Delivery-only restaurant models often depend on third-party aggregators of online food orders such as UberEats, DoorDash, and Deliveroo to handle vast quantities of online orders. Consequently, creating alliances with other parties’ platforms is of the highest significance.
A restaurant that only provides delivery is a business concept that is low-risk, involves a little initial investment, and has the potential for large returns. The cost of constructing a cloud kitchen is far less than that of a typical restaurant.
7 Benefits of Cloud Kitchen Business
Cloud kitchens are becoming increasingly popular, and for good reason—they offer a number of benefits that traditional restaurants don’t. We’ll now discuss the benefits of cloud kitchens and explain why they’re such a great option for entrepreneurs. Keep reading to learn more!
1. Low Infrastructure Cost
The cost of opening a restaurant in Dubai, a city with notoriously high living expenditures, may be substantial. When comparing cloud kitchens to traditional brick-and-mortar eateries, the former wins because of the lower fixed expenses involved. A cloud kitchen requires much less money than a traditional one because of its low leasing prices, minimal infrastructure costs, low startup expenditures, and low continuing maintenance costs.
By using cloud kitchens, restaurant owners may save a lot of money by operating out of sites as tiny as 250-300 square feet. A shared kitchen might also help you cut down on the costs of getting your firm off the ground.
2. Low Risk, High Reward
Despite significant marketing costs and little visibility, cloud kitchen has proven to be a very profitable company. Launching a cloud kitchen requires far less initial expenditure than opening a physical restaurant, making it a low-risk business option.
The cheaper overhead means company owners may take risks on new products and services, which in turn boosts revenue. In addition, cloud kitchens are presently getting more orders than dine-in restaurants as a consequence of the tremendous increase experienced by the industry of online ordering during COVID-19.
This further adds to the restaurant’s rising revenue as a whole. This kind of business has lower startup and operating expenses than a traditional sit-down restaurant since it does not need as many employees. When compared to a conventional restaurant, shutting a cloud kitchen does not involve any tedious or time-consuming procedures.
3. Simple Procedure of Orders
Using a cloud-based kitchen, order management may be performed efficiently. Companies that provide “cloud kitchen” services typically partner with existing delivery services or create their own online ordering system.
This provides operators with a great deal of latitude to launch different cloud kitchen brands in different locations, which ultimately allows them to serve more customers with faster turnaround times.
4. Exceptional Customer Service
A potential benefit of using cloud kitchens is the potential for faster service times due to the clear division of labor. After placing an order via one of these food aggregator applications, the food is prepared in a local cloud kitchen and delivered through a different delivery network.
“Distributed cooking” is the most popular term for this kind of preparation. Because of this, restaurants may concentrate on preparing their parts of the meal even while delivery services are active.
5. Reduced Advertising Cost
The bulk of your orders will come from outside sources like meal delivery services since cloud kitchen is a digital service. As a result, all that is required of you to meet the criteria is some effort on your part of creating an attractive menu and deals. Advertising on social media platforms might help spread awareness of your company’s products.
6. A Broad Audience
In recent years, there has been a dramatic growth in the number of UAE residents and nationals who are interested in utilizing mobile apps to place their food orders. The formation of partnerships with dominant players in the food delivery sector, such as Talabat, may help you attract a larger consumer base.
In contrast to most brick-and-mortar restaurants, which typically only provide one meal choice, cloud kitchens may offer a variety of menus to appeal to a broad range of clients. For example, a United Arab Emirates-based cloud kitchen startup Kitopi announced that it would offer customers a selection of 7,000 different dishes.
7. Cost Efficient For Even Customers
The cloud kitchen model is not only beneficial for restaurant owners but also for customers. Since cloud kitchens are less expensive to maintain, customers can get food at a cheaper price. Cooking establishments in the United Arab Emirates (UAE) may make a healthy profit by offering lower prices for higher-quality meals that come with a quality guarantee.
Using third-party apps, customers may place orders quickly and with no effort. As a result of a combination of factors, cloud kitchens have become one of Dubai’s most popular restaurant ideas.
How to start a Cloud Kitchen in Dubai
Dubai has seen a surge in cloud kitchens in recent years. Here’s what you need to know if you’re thinking of starting one yourself.
1. Location & Property for Cloud Kitchen in Dubai
A cloud kitchen may be successful without being in a highly visible or highly trafficked area. The operational expenditures of a cloud kitchen business may be drastically reduced by moving operations to a smaller space (even as little as 250-300 square feet).
Although ghost kitchens may be set up anywhere from a residential neighborhood to an unused parking lot or the backyard of a market, it is crucial to keep client demand in mind when choosing a location.
Alternatively, business owners might cut down on startup costs by sharing kitchen space. It’s feasible that places like vacant parking lots and residential neighborhoods make for great kitchen locations.
2. Trade License and Requirements
The legal operation of a cloud kitchen requires the acquisition of the right permits and registration with the relevant bodies. Both food and a trade license are necessary for the UAE before establishing a cloud kitchen business.
Before applying for a commercial license, you must first decide whether you will be doing business on the mainland or in a free zone. Business activities and trade names must be approved by Dubai’s Department of Economic Development (DED) before a mainland company may be formed. Applications for commercial licenses are handled by the free zone’s administration authority.
The Dubai Municipality’s Food Safety Department is the agency in charge of providing food licenses. In order to apply for this license, you will need to submit a layout of your kitchen. All refrigerators, freezers, dishwashers, and other appliances used to store, prepare, or clean food should be inspected. Every possible window, door, and vent opening must be accounted for.
3. Staff Required for Cloud Kitchen
A little workforce is sufficient for cloud-based kitchens. It’s possible that your chef also cooks for other businesses in the same kitchen. You should start by identifying the available positions that need filling. If you need a meal prepared, do you have to bring in a chef, or can your cooks do it?
Once open positions have been determined, it is time to begin the recruitment process.
4. Kitchen Equipment and Packaging
If you want to serve a certain kind of food, then you’ll need specific types of cooking equipment. However, you’ll need some basic tools, like a stove, refrigerator, oven, cutting knives, and so on, to get started running a cloud kitchen.
Packing is also a crucial part of running a successful food delivery business. It doesn’t matter how tasty the food is if it isn’t packaged correctly – the customer’s experience will suffer and your brand’s image might be at risk.
Investing in high-quality packaging material that meets industry standards is essential if you want to ensure your food is wrapped properly. High-quality plastic tubs, cartons, and cutlery should all be included here.
5. Generating Online Orders and Marketing
When you are unable to personally see your consumers, internet marketing becomes even more crucial. You should absolutely advertise your hidden kitchen on online food aggregators since this kind of service is likely to be popular among your target clientele.
Promoting your cloud kitchen service through social media should be a primary goal right away. Create a presence for your restaurant on social media platforms such as Facebook, Instagram, and Twitter, and market your company by posting appetizing images of your food and specials.
How Airzone can help you Start a Cloud Kitchen in Dubai?
It’s risky to start a new business, but you can lessen some of the risks by working with expert consultants like Airzone. Good food is always in demand in high-traffic regions, making it a profitable business to start. As a result, we recommend that you depend on our experts to secure the success of your new business ventures.
Airzone can assist you in getting your business off the ground if you’re planning to launch one in Dubai.
We can guide you through the process of launching a business in Dubai thanks to our experience and knowledge in the field. We’ll connect you with the right service providers to aid in the development of your enterprise in the United Arab Emirates.
You can get assistance from our dependable partners in Dubai and obtain the necessary trade licenses. We’ll put you in touch with the appropriate experts to handle anything from visa applications to crucial administrative tasks while you concentrate on growing your business.
FAQs about Cloud Kitchen in Dubai
How Cloud Kitchen is Different from Restaurant?
Cloud kitchens, often known as virtual kitchens, are used only for food delivery. They have found success only in taking orders over the internet through various meal delivery services and do not operate any kind of conventional restaurant.
Are cloud kitchens profitable?
Cloud kitchens have the potential to generate a significant profit, and their operations are far simpler to expand than those of dine-in restaurants.
How Much Investment is Required to open a Cloud Kitchen?
In the United Arab Emirates, the cost of launching a cloud kitchen company is 23,000 AED. This cost is far less compared to traditional restaurants.
So just to recall, setting up a cloud kitchen in Dubai need not be an overly difficult procedure, provided that you have the necessary information on hand. However, prior knowledge of the process is required. It’s also important to remember that submitting a complete and error-free application at the designated time is crucial if you want to have a smooth and straightforward experience applying for a license.
We talked about the mainland and free zones too in this guide. If you want to learn more about how to set up a business in Dubai, we have a comprehensive guide for you. With a thorough understanding of the UAE’s business scene, you should be well prepared to establish a company in the country. If you need information regarding free zones, we have detailed articles on different free zones in the UAE.