Cloud Kitchen Franchise- Is it a smart investment in F&B Franchise options?

The new ordering-in trend has become part of “Netflix and Chill”. The concept of online food ordering through delivery apps is on upward momentum. Ghost kitchen or dark kitchen may sound odd but are common synonym for Cloud Kitchen phenomenon. The requirements of current social distancing criteria have made these highly sought after investments.

 

A survey with restaurant owners indicates that majority are willing to invest in cloud kitchens in favour of full service restaurant or fast food joint. Major Reason? Mushrooming of food aggregators and this option best suited for fast paced urban lifestyle.

 

Boost in online shopping has complemented the trend of ordering out food which has given major fillip to the cloud kitchen franchise business.

 

What’s a Cloud Kitchen?

 

Cloud kitchen are cooking spaces designed to enable food for deliveries and take-outs only. Unlike traditional restaurants, these spaces have no storefront or dine in facilities but have fully equipped kitchen and resources needed to prepare food.

 

Benefits of Cloud Kitchen

 

Cost effective: The operational cost and initial capital required is much lower, as it can be up and running with limited staff, low set up maintenance and other fixed expenses in comparison to  full service restaurant or fast food joint. Thereby enabling  quick ROIs and breakeven.

 

Company Formation: Cloud Kitchen company incorporation requires far less approvals and utility requirements from civic bodies.

 

Expansion Opportunities:  The scalability is easy to manage and very often serves as experimental platform to newbies in culinary business or home based franchisee such as catering or ice cream parlours. Based on customer feedback the offering can be tailored to suit the tastes at a very short notice. This model also helps to set supply chain and internal systems in order; before establishing a full-fledged restaurant.

 

Easy Access: Being a web based delivery service; the owners are not under pressure to scout for premier locations or high footfall places to meet breakeven costs.

How the Licensing works?

 

Before licensing it is important to breakdown the concept of cloud kitchen into facilitators and users. Facilitators own the commercial kitchens and rent it out to operators or users; which can be any major F&B franchise or fast food brand.

 

The facilitators need “kitchen centre” as listed activity on their trading licence (or as required by local economic department). The operator or users will need to acquire restaurant/ cafeteria licence and partner with food delivery aggregator.

 

Many full service restaurants are also renting their own space now a days or use it as dark kitchen or looking to tie up with central kitchen to carry out operations.

 

Conclusion

 

It is the degree of flexibility that is not available in traditional restaurant and simplified hassle free approach which helps newbies to understand the business model within F&B segment and makes it an attractive investment for start-ups.

 

Selloverseas.com experts are always available to guide based on operating business segment and geography of interest.