Cloud kitchen: A smart investment for newbies in culinary business

The concept of virtual, cloud, ghost or dark kitchens may sound odd, but they have become highly sought-after since the onset of the pandemic. A report published by POSist and Dubai Restaurants Group says 70 per cent restaurant owners are willing to invest in cloud kitchens. Reason? Mushrooming food aggregators and evolving urban lifestyle. Not only shopping habits, but the trend of eating out has also taken a hit with people fearing to dine in crowded spaces. Thus, boosting the cloud kitchen business.

What’s a cloud kitchen?

Cloud kitchens are cooking spaces designed to enable food production for deliveries. Unlike traditional restaurants, these spaces don’t have storefront or dining facilities, but contain kitchen equipment and resources needed to prepare food.

Benefits

Cost-effective: Cloud kitchens have low setup and maintenance costs as they don’t require as much space, staff and other expenses a restaurant would do. One can incorporate the company without worrying about rents and acquiring multiple approvals from civic bodies.

Expansion opportunities: Cloud kitchens can serve as an experimental platform for those new in the culinary business. Based on how it works out, they can move on to establish a full-fledged restaurant.

Easy access: As cloud kitchens operate offline, the owners don’t need to scout for premier or busy locations to attract clients.

License 101

First, let’s break down the concept of cloud kitchens into facilitators and users. Facilitators own commercial kitchens and rent it out to users. Therefore, they need a “kitchen centre” license from the Department of Economic Development. The latter may either rent their own space and use it as a dark kitchen or tie up with a central kitchen to carry out operations. Therefore, they need to acquire a restaurant/cafeteria license and partner with food delivery aggregators.

— The author is a legal corporate advisor at Shuraa Business Setup