Are you aware of the reasons behind the rising popularity of Cloud Kitchens in Dubai and other nations? Because of the growing consumer preference for online food delivery.
With a single click, you can have your preferred dish ordered in no time. You can consolidate multiple brands all at once.
Cloud kitchen has low risk and high profits. These are kitchens with no storefront or dining facilities, which enables them to operate cost-effectively. The chefs make good food on-site, and customers can order their preferred food using different online platforms.
Even traditional dining restaurants had to adopt the cloud kitchen model. The latest buying trends suggest virtual kitchens will dominate the food sector in the coming years. And why not? They’re convenient, there’s no compromise with food quality, and customers can get the food they want at their doorstep.
What is a Cloud Kitchen?
Cloud kitchens often use advanced technology for efficient order management and delivery. It’s also known as a virtual kitchen or ghost kitchen. This kitchen takes orders from online portals and mobile apps.
The advantages of a cloud kitchen are that it is cost-effective, and you don’t need to pay any rent for a physical space for the kitchen. You can get orders from multiple brands, which works like the rest of the restaurant’s kitchen.
The profit margin is higher in a Cloud Kitchen as you cut off many costs, such as the kitchen’s rent, and you can take multiple orders from different brands simultaneously. More than 400 cloud kitchens are now open in Dubai. Setting up a cloud kitchen doesn’t demand much, and starting a cloud kitchen in Dubai anytime and anywhere is easy.
Start a Cloud Kitchen in Dubai
There’s no turning back when you invest in a brick-and-mortar restaurant. Therefore, entrepreneurs and investors in the UAE have found a reliable option in the cloud kitchen model to experiment with their ideas at minimal costs. Plus, you get the perfect infrastructure and business atmosphere to conveniently manage your cloud kitchen in Dubai.
The Food Control Department of Dubai Municipality monitors the food quality and production process to maintain high food standards.
Cloud Kitchen License in UAE
To start a cloud kitchen in the UAE, you’ll need two key licenses: a trade license and a food license.
- Trade License: You can obtain this from the Department of Economic Development (DED) or the relevant free zone authority based on your business location and preferences.
- Food License: This is issued by the Dubai Municipality’s Food Safety Department, ensuring your kitchen meets all food safety regulations.
By securing both licenses, your cloud kitchen will be fully compliant with UAE laws, setting the foundation for a successful operation.
Benefits of a cloud kitchen in Dubai
Cloud kitchens offer several key benefits, making them an attractive option for modern investors. These advantages include:
1. Savings on infrastructure
Ghost kitchens provide a low barrier to entry for startups, helping them to offer flexible food menu options. You don’t need to purchase expensive real estate in posh areas when you run a virtual kitchen. Select a site that keeps you close to residential townships and the inner city’s parts.
Traditional dining restaurants require massive initial deposits and hefty periodic rents. With a cloud kitchen, you have the breathing space to take a day off and feel less burdened as a food business owner.
2. Expansion opportunities
Establishing a cloud kitchen venture isn’t restricted to startups and low-budget businesses. Reputed restaurants can expand their reach within and outside the city with the help of a cloud kitchen. This way, they can cater to a broader audience segment that already loves their food.
Many up-and-coming cloud kitchens in the UAE compete neck-to-neck against many credible restaurants. However, once your food venture gains considerable recognition, you can open multiple branches and expand your brand gradually at minimal risk.
3. Large audience pool
When your menu is listed on digital platforms, any person with access to the internet is your prospective customer. Moreover, around 70% of consumers prefer ordering food from quick-service outlets and cloud kitchens.
Therefore, if the menu is attractive and you advocate food hygiene, you’ll receive more orders than expected. It all boils down to customer retention; you must cook flavoursome food that makes the customer a permanent buyer.
4. Easily manageable
Easy management doesn’t imply that you’ll never face difficulties or “feel the heat.” However, compared to a dine-in outlet, you have fewer tasks to handle. This makes you maintain composure, and even the stressful hours are short-lived.
Once you enter a cloud kitchen, you focus on cooking delicious food and ensuring timely delivery. Order management is straightforward, and chances of error are minimal since the process is tech oriented. Query management is also done via telephone calls and chats and doesn’t consume much time.
5. Cloud kitchen model helps you make data-driven decisions
Customer trends help you improve your offerings. Utilise technology for order management and analyse the data to gain rich consumer insights. You learn about your best-selling food items and those that haven’t gone well with the audience.
This helps you modify the existing food menu to the customer’s liking. You can boost your sales, increase satisfaction, and grow your business with consumer data. In a competitive food industry like Dubai, you must always be at your best to make a name for your business.
6. Low risk, high profit
When you set up a cloud kitchen, you reduce the risks of financial instability. You don’t require a large operational team, and there aren’t any high overhead costs. You’ll quickly establish a loyal customer base if you offer quality food at competitive prices.
Furthermore, business closure doesn’t cost much if things don’t go as planned. The massive investments make Closing the venture less straightforward for dine-in restaurants. Therefore, a cloud kitchen is best for investors who wish to run a low-risk, high-profit business.
Key difference between a cloud kitchen and a traditional restaurant?
| Feature | Cloud Kitchen | Traditional Restaurant |
| Primary Operation | Delivery and takeout | Dine-in, delivery, and takeout |
| Customer Interaction | No direct customer interaction | Direct customer interaction |
| Location | Lower-rent areas | Prime, high-traffic areas |
| Operational Costs | Lower, as there is no waiting staff needed | Higher, as there are waiting staff involved |
| Brand Hosting | Can host multiple brands | Focuses on a single brand |
| Marketing Strategy | Depends on Digital Marketing | Depends on walk-ins and digital marketing |
| Cost Efficiency | Profits are more in a cloud kitchen | Profits are lesser as compared to a cloud kitchen |
This table showed a clear difference between a cloud kitchen and a traditional restaurant.
How to Start a Cloud Kitchen in Dubai
Before generating profits with Cloud kitchen, it’s important to understand the steps involved in starting a cloud kitchen in Dubai. Here’s a clear guide to help you get started:
Step 1: Develop Your Business Concept
Start by defining your menu, target audience, and overall business strategy.
Find your flavour
Take a survey on what kind of food cravings the Dubai people want. This will give you simple, good data, and you can plan accordingly. But do find something unique, and you can take that forward.
Know Your Market
Look at your competitors and what they are offering. Tracking the needs of your target audience will help you form a better cloud kitchen, which will help you earn more profits through the cloud kitchen in Dubai.
Plan Your Kitchen
Look if you’ll sell just one type of food or offer variety. Consider your space and how much food you can handle making at once.
Step 2: Select a Trade Name
Choose a unique and memorable name for your cloud kitchen that complies with UAE regulations.
Before Choosing a Trade name, you must follow the pointers mentioned below:
- If you wish to have a company name after yours, you must use your full name, and you can use abbreviations.
- Using Politically charged terms is strictly prohibited.
- You can’t use the name of Allah.
- No wrong language or foul words are allowed.
Note: Remember these steps before you decide what to keep as your trade name.
The last thing is that after you have chosen a company name for your business, you must get it checked by the authorities.
Step 3: Decide on a Business Structure
After choosing a trade name, choose a legal business structure. The right business structure is important for your business as it affects your liabilities, taxes, etc. Determine whether you’ll operate as a limited liability company, a branch of a foreign company, a sole proprietorship, or under a free zone.
Each structure has its advantages and features. Choosing the right business structure requires professional help. Our experts at Shuraa will help you choose the right business structure. Registering your business with the DED (Dubai Department of Economic Development) to take forward the legal entity.
Step 4: Obtain Your Business License
Apply for the necessary trade and food licenses through the DED or free zone authorities.
Step 5: Pick the Right Location
After all the steps, it’s time to choose the right location for the cloud kitchen in Dubai. Check places near the commercial zones where food delivery is more likely. The demand for food delivery is high and will cost you a low monthly rent.
After saving the cost of the rent, you can put the same amount into getting better equipment for your cloud kitchen. A good location is a plus point as you will get many orders from different chains. Better quality and quantity are required, and you must meet the cleanliness standard as per Dubai’s health and safety norms.
Step 6: Partner with Online Food Platforms
Collaborate with popular food delivery platforms to reach your customers. Such as Deliveroo, Noon Food, Eat-Easy, and Clean Eat Me. Or, if you want to avoid contacting the food platforms, you can tell the customers to pick up the order directly from the kitchen. Taking Multiple orders from different food chains can make your business profitable in the long term.
Step 7: Open a Business Bank Account
Opening a bank account is important as it helps you track your business’s expenses and cash flow. Choose a bank that offers good services and helps with online transactions.
Step 8: Insure Your Kitchen
Insuring your kitchen with insurance coverage is a must. In case your kitchen gets fire or meets with any sort of accident. With insurance, it can be covered under the same. You can also insure your employees in the case while delivering the food; if they meet with any sort of accident, the medical bills can be compensated.
Step 9: Focus on Branding
Proper business branding is important. As a new business in the market, it will help your customers know more about your kitchen. Being active on social media, making a good logo with great packaging, and how you are better than the competitors. These things can be posted on your website and social media platforms like Instagram, Facebook, etc.
Step 10: Start Your Cloud Kitchen
Once everything is in place, you’re ready to start operations and serve your customers! You can collaborate with food influencers and bloggers who can promote your business through their social media handles. This will surely create a buzz in the market. You can decide to give limited offers to your customers.
Following these steps will give you an idea of how to set up your own Cloud Kitchen in Dubai.
Documents required for a license to setup a cloud Kitchen in Dubai
Few documents are needed to apply for a license for cloud kitchen in Dubai:
- Application form
- Passport copy
- Coloured passport photos
How much does it cost to startup a cloud kitchen?
Starting a cloud kitchen in Dubai can cost between AED 75,000* and AED 100,000*, which includes licensing and other expenses. The cost can vary based on factors like the size of your cloud kitchen, the services offered, the type of license, and other criteria.
Cloud Kitchen License Cost in Dubai
The cost of a cloud kitchen license in Dubai is around AED 18500* including the visa. Also remember physical space is mandatory. The cost may vary on basis of business capacity, like how much space you want to start a cloud kitchen.
Note: Contact our business consultants to get the exact cost of opening a cloud kitchen in the UAE.
Tips to know before starting a Cloud Kitchen in Dubai
Before setting up a cloud kitchen, you must consider the important steps. Below are the tips; read further.
- Making a good online presence in your cloud kitchen in Dubai is important. Proper social media and websites are required. As it helps you to promote your brand name online on social media.
- Decide on the menu carefully, as it should be relatively inexpensive. Select the better packaging for your product. A good logo and good packaging attract customers to your product.
- Be careful about your location, as it must be close to your customer’s place. It should be in something in the middle that is easily accessible.
- A neat and clean environment is needed as per Dubai’s cleanliness norms.
Consult with Shuraa Business Setup
The food industry in the UAE is on the rise, and your cloud kitchen business can thrive in the region. Therefore, you should know the areas in which to set up your cloud kitchen in Dubai as it decides your geographic audience. Consult with Shuraa Business Setup for end-to-end business assistance, including navigating legal requirements, optimising business setup costs, and gaining insights into market trends.
Our industry experts also solve your dilemma of choosing a business location for your cloud kitchen venture. When you collaborate with us, you can say goodbye to all your business set-up worries.
Please contact us today at +97144081900 or reach us via WhatsApp at +971507775554. For email inquiries, you can write to us at [email protected].
