{"id":25525,"date":"2021-05-22T23:29:53","date_gmt":"2021-05-22T23:29:53","guid":{"rendered":"https:\/\/www.posist.com\/restaurant-times\/?p=25525"},"modified":"2023-08-24T14:21:35","modified_gmt":"2023-08-24T08:51:35","slug":"how-are-cloud-kitchen-business-models-more-profitable","status":"publish","type":"post","link":"https:\/\/www.posist.com\/restaurant-times\/uae\/how-are-cloud-kitchen-business-models-more-profitable.html","title":{"rendered":"7 Reasons Why Cloud Kitchen Business Model Is A More Profitable Idea In 2022"},"content":{"rendered":"

The COVID-19 pandemic has severely impacted the global restaurant industry. However, in the UAE, cloud kitchens continued to grow despite the slowdown in other sectors. The reluctance of the customers to dine-in at restaurants has worked out well for the delivery-only outlets or cloud kitchens. L<\/span>et\u2019s look at what the cloud kitchen business model is and how it is better than other restaurant models.<\/span><\/p>\n

What Are Cloud Kitchen Business Model?<\/b><\/h2>\n

Cloud Kitchens are fundamentally different from the universal dine-in or \u2018brick and mortar\u2019 restaurants. <\/span>They operate out of leased spaces on a delivery-only basis and have no front-of-the-house operations<\/b>. Therefore, they are also called \u2018dark kitchens\u2019, \u2018ghost kitchens\u2019 or \u2018virtual kitchens\u2019.<\/span><\/p>\n

Cloud Kitchens use shared spaces where multiple restaurant brands often operate under one roof to lower labor and equipment costs. For instance, in the UAE, the most established brand of cloud kitchen is Kitopi, which partners with multiple restaurant brands like Papa John\u2019s Pizza, Right Bite, Mix \u2018N\u2019 Match, etc., to grow its business and expand the customer base via online deliveries.\u00a0<\/span><\/p>\n

Cloud Kitchen Business Model vs Other Restaurant Formats In Terms Of Profitability<\/b><\/h2>\n

The UAE is witnessing a sharp rise in the number of cloud kitchen businesses. <\/span>There are 400 cloud kitchen brands operating across the UAE in 80 different locations<\/span><\/a>. Many of them are investing in business expansion. There must be a reason why more and more restaurateurs are embracing the cloud kitchen business. Let us find out.\u00a0<\/span><\/p>\n

1. Location<\/b><\/h3>\n

Location is an important factor that sets cloud kitchens apart from other formats.<\/span> The absence of dining space allows restaurateurs to set up their business anywhere.<\/b> Elements like parking or ambiance are not required to be taken into consideration. However, the factors that do need to be considered while opening up a cloud kitchen are customer demand, availability of raw materials and easy accessibility to delivery staff and suppliers\/vendors. This makes it easier to set up operations in locations where traditional restaurant formats cannot be set up.\u00a0<\/span><\/p>\n

2. Low Cost<\/b><\/h3>\n

Cutting down on operating costs is a key aim of restaurateurs worldwide, and so is the case in the UAE. This has triggered a paradigm shift towards the cloud kitchen business model.<\/span><\/p>\n

Following are some of the fixed and recurring costs that cloud kitchens help to reduce:<\/span><\/p>\n