The restaurant industry is booming worldwide, and the UAE is at par with the global liberal trade practices. The past few years have seen Dubai, Abu Dhabi, and Sharjah gain great commercial importance.
The growth of the food service sector can be directly attributed to the cosmopolitan culture and the wealth of the people in the UAE. Based on a CAGR report, it has been estimated that the restaurant industry is expected to grow at a rate of 5.22%.
The restaurant sector of the UAE holds great potential. It is one of the most thriving businesses for newcomers in the industry, especially when experimenting with a new kitchen format like a cloud kitchen.
What Is A Cloud Kitchen?
Popularly known as the Virtual Dining concept, a cloud kitchen is also known as a dark or ghost kitchen. It is a delivery-only restaurant business that doesn’t offer any dine-in services and is limited only to takeaway or delivery. This concept is a great form of experimentation with the food and the operational facets of a restaurant business.
How Does It Work?
A cloud kitchen accepts orders through online platforms like websites, mobile apps, or hotline numbers to deliver the order to the customer’s desired location. This business model is apt for anybody who is an amateur but also wishes to get a quick head start in the restaurant industry. It is a low-risk, low investment, high-profit setup that is drastically cheaper than setting up a traditional establishment to start a restaurant business.
Steps To Open A Cloud Kitchen In The UAE
To help you get started on your dream business without losing any time, we have listed down some of the fundamental essentials you need to get sorted.
Getting Your Licenses
To open any food business establishment in the UAE, you will need to strictly adhere to the food code in Dubai, Abu Dhabi, and the UAE.
If you wish to set up your cloud kitchen in the UAE, you will need to get a trade license from the Department of Tourism and Commerce Marketing and a Food License from the Food Safety Department. Even though it is not a formal dining space, you should also apply for a general trading license to set up your business in any city in the UAE.
Here are 6 simple steps to get your trade license in the UAE.
- Finalize the name for your cloud kitchen
- Mention the required business activity for your kitchen
- Fill out the application form and get all the required external approvals
- Gather all the listed documents
- Submit the application and pay the fees
The general trading license fee can cost around AED 30,000 to AED 40,000 and vary on several factors. It is also used as a legal holding structure within the UAE and other licensing authorities.
Get A Clear Business Overview
Not having a dine-in service doesn’t mean your kitchen should not have a concept. Every establishment must have a business overview in the form of a brief concept note. It should include essential details like your mission and vision, the idea behind your cloud kitchen, and your plans like future expansion.
Stay On Top Of Your Business Operations
Have a clear operation plan that includes how you want your cloud kitchen to function and the process involved, from accepting and ordering to delivery.
Process documentation is a critical step that will give your staff and business operations much-needed visibility. Your customer service is dependent on delivery, which is often an external source.
Managing Delivery Services
Partnering with the best technology partners can ensure hassle-free delivery options. Your food can only be appreciated if the customer receives the order in perfect condition.
A Crisp Marketing Plan To Get Started
Online marketing is a must-have for a cloud kitchen. Without a physical restaurant, it can be tough to create customer retention. The bottom line is that your customers will have no clue that your establishments exist if you do not spend and ideate heavily on marketing and branding your cloud kitchen.
Choosing The Right Location For Your Cloud Kitchen
Cloud kitchens are the most economic-friendly establishments. The customer footfall in your surroundings will not determine your location. But that doesn’t mean you can set up your cloud kitchen in the middle of nowhere.
Your setup should be in a location where you can easily access all the necessary amenities to run your restaurant. It needs to be in a demographically favorable area to your target audience. Even though it doesn’t need to be highly accessible by your customers, it needs to be logistically correct for delivery services to ensure that your order is not affected during the delivery time.
An Efficient Point Of Sale Technology
You will need an efficient tech stack to manage all the orders pouring in and systemically accept them as you receive them. With an effective POS technology, you can easily keep track of orders, do detailed reporting, and ensure that your kitchen is running smoothly.
Kitchen Equipment & Packaging
Based on what you put on your menu, you and your chefs will need to decide the kitchen equipment that your establishment needs.
But the most crucial of all, since the order is to be delivered, the packaging is something that you need to invest in thoughtfully. The condition in which your order reaches the customer will display your brand value and lead to better customer retention.
The Right Staff For Your Cloud Kitchen
Based on the size of your business, you will need to decide the number of chefs, helpers, and other employees your cloud kitchen needs. Such business models usually function with a small staff size and can expand based on the execution of future plans and the growth of the business.
A cloud kitchen can operate and deliver to customers in multiple locations and has the potential to capture a broader customer base. This model allows the stakeholders to cater to various brands from the same space using the same resources. Most of the expenses are primarily focused on running the kitchen. Significant cost reduction in other aspects of setting up a restaurant helps them develop reasonable and competitive pricing.