Did you know that there are over 10,000 restaurants in Dubai? Setting up a cloud kitchen in Dubai can be a lucrative business venture. However, there are some important things to consider before you get started. In this article, we will provide an overview of the process involved in starting a cloud kitchen in the UAE. We will tell you everything you need to know about starting up your very own cloud kitchen business.
So what its a cloud kitchen business? And how can you start your food delivery service through a cloud kitchen in Dubai? Will you require an integrated kitchen display system or to offer an integrated delivery system? All these questions about your venture into the cloud kitchen business will be answered. Read on to find out more.
What Is a Cloud Kitchen?
A cloud kitchen (also known as a ghost kitchen) is a commercial kitchen that doesn’t serve customers on-site. So a cloud kitchen in Dubai offers an inaugurated kitchen display system and integrated food delivery system to provide the food delivery service. Food businesses that operate cloud kitchens typically deliver their food to customers via third-party delivery platforms like Uber Eats or Zomato.
If you want to set up a cloud kitchen in Dubai, you will need to obtain a commercial license from the Department of Economic Development (DED). This will allow you to commence a successful cloud kitchen business for your food delivery.
You will also need to register your business with the Dubai Municipality. This is extremely crucial for setting up a cloud kitchen business.
When applying for your license, you will need to provide a detailed business plan. This should include information about your kitchen setup, staff, menu and food delivery operations. You will need to explain exactly how your cloud kitchen business will be successful through this plan.
Advantages of Opening a Cloud Kitchen
As a business model, cloud kitchens offer a range of advantages over and above a traditional restaurant business.
- Less space
- Fewer staff
- Less overhead costs
- Improved cash flow
- Opportunities for business growth
- Large customer network
One of the biggest advantages of cloud kitchens is that they can be located in smaller spaces. This means you can save on rent costs and improve profitability in the long run. For instance, you can show an integrated kitchen display system for your customers to order their food from. This is the key to all successful online food ordering platforms. To become one of the best online food aggregators, you will be giving a virtual restaurant for your customers that will show them the food quality, that you are a delivery only restaurant and that you will prepare food to be delivered in high quality plastic containers for fair food prices.
Another benefit of cloud kitchens is that they require fewer staff. This will really ease up on the front of house operations cost prices and even help reduce food prices to ensure your virtual restaurant will be a huge success. This is because there is no need for waiters or front-of-house employees to great customers. After the food is cooked in the designated kitchen, it’s then delivered right to the customer’s doorstep.
Furthermore, as your business grows, you can simply add more cloud kitchens to your network. This gives you the flexibility to expand quickly and efficiently.
Tapping into the large network of customers is another advantage of setting up a cloud kitchen. Food delivery platforms like Uber Eats and Zomato have a vast customer reach, giving further expansion opportunities to business owners.
Generally speaking, you can expect to spend anywhere from AED 50,000 to AED 100,000 on start-up costs. This includes the cost of renting a commercial kitchen, purchasing equipment, and getting all the necessary licenses and permits.
How to Set Up a Cloud Kitchen
Now that we’ve looked at the advantages, let’s take a look at how you get started setting up a cloud kitchen.
Here is a step-by-step guide to help you get started:
1. Select a Business Structure & Location
The first step is to choose a business structure. There are three main options for cloud kitchens in Dubai:
- Sole proprietorship
- Limited liability company (LLC)
- Free zone company
If you are a foreign national, you will need to set up an LLC or free zone company.
To set up an LLC, you will need to have a local sponsor. This is typically a UAE national who owns 51% of the business. For a free zone company, you can have 100% foreign ownership.
It is important to note that cloud kitchens are not currently allowed in residential areas in Dubai. So you will need to find a commercial space to rent or lease.
When choosing a location for your cloud kitchen, there are a few things to keep in mind:
- The size of the space
- The cost of rent
- The proximity to your target market
- The availability of parking
2. Get a Trade License & Register Your Business
Once you have chosen a location, you will need to apply for a trade license.
To do this, you will need to submit the following documents:
- A copy of your passport
- A copy of your visa
- A copy of your lease agreement
- A copy of your Ejari certificate
Once you’ve gathered these documents, you can start the application process. There are several trade licenses you may qualify for, so you’ll have to determine which fits best with your business.
For example, because a cloud kitchen involves selling food, you will need to apply for a Food Trading License. If you want to serve alcohol, you will need to apply for a Liquor License. There are also fees you will need to pay.
Then, the next step is to register your business with the Department of Economic Development (DED).
To do this, you will need to submit the following documents:
- A copy of your trade license
- A copy of your passport
- A copy of your visa
- A lease agreement
3. Obtain a Food License
Next, it’s time to get a food licence from the Dubai Municipality. To do this, you will need to submit the documents you acquired above.
Additionally, you will also need to abide by Dubai’s food code and pass a food safety inspection. The food safety department governs the necessary regulatory requirements that business owner’s must meet to start a cloud kitchen model.
You and your staff will need training in food safety procedures, and your kitchen needs to meet all the regulations set by the municipality.
Food processing equipment, food storage areas, a food preparation area and all food items need to be in order.
These regulations include having the proper equipment and storage facilities. After you’ve passed the inspection, you will be issued a food license.
4. Get Insurance & Open a Corporate Bank Account
The next step is to get insurance. This is important because it will protect you from any liability claims that may arise.
There are a few different types of insurance you should consider:
- Property insurance
- Liability insurance
- Product liability insurance
- Workers’ compensation insurance
Importantly, it’s wise to keep your personal and business finances separate. So the next step is to open a corporate bank account for your cloud kitchen. Keep track of your finances to make it easier to prepare your taxes at the end of the year.
5. Hire Staff
Now that you have everything in place, it’s time to start hiring staff to work in your cloud kitchen. First, you will need to decide what positions you need to fill. For example, do you need someone to cook the food, or can your kitchen staff handle that?
Once you’ve determined what positions you need to fill, you can start the hiring process.
There are a few things to keep in mind when hiring staff:
- Make sure they have the proper visas and work permits
- Conduct background checks
- Provide training on food safety procedures
- Set up payroll
6. Choose a Delivery Service
Now that your cloud kitchen is up and running, it’s time to start thinking about packaging and delivery to complete online food orders.
You will need to decide what type of packaging you want to use. For example, do you want to use disposable or reusable containers?
You will also need to decide how you want to deliver the food. There are a few options for food delivery services:
- You can use your own delivery staff
- You can partner with a delivery service
- You can allow customers to pick up their orders
By following these steps, you can start your cloud kitchen with ease. Just be sure to do your research and have a solid plan in place.
Consider The Details
It’s important to consider the details when it comes to establishing your cloud kitchen business. Make sure you have a thorough understanding of your target audience, types of food on offer, and have the online business aspects ironed out before firing up the hot plate.
- What type of food will be on offer?
- At what price point will you set your menu?
- Is it breakfast, lunch, dinner or dessert?
- What about a specific cuisine?
- How do customers place their orders?
- Can customers order alcohol?
Getting a grip on all these points will help improve customer experience, so you’re set up for success with a cloud kitchen model.
Promoting Your Cloud Kitchen
The final step is to market your cloud kitchen. There are a few ways to do this:
- Create a website or blog
- Use social media
- Advertise in local publications
- Participate in food festivals
Social media is one of the best ways to promote your cloud kitchen. And setting up a marketing strategy specifically for social media platforms is imperative to the success of your cloud business.
There are a few things to keep in mind when promoting your cloud kitchen on social media:
- Use high-quality photos and videos
- Use relevant hashtags
- Post regularly
- Engage with your audience
Another great way to promote your virtual kitchen is to set up a website or blog. This is a great way to share information about your cloud kitchen, such as your menu, hours of operation, email address and contact information.
It’s also important to make sure that your website is optimized for search engines. This is where SEO comes in.
There are a few things you can do to make sure your website is optimized for SEO:
- Use relevant keywords
- Use alt tags for images
- Create backlinks
A loyalty program is a wonderful way to encourage customers to come back to your cloud kitchen.
The most successful loyalty programs offer rewards that are valuable to customers. For example, offering a discount on a future purchase, or points that can be redeemed for free items are great ways to reward customers.
Virtual businesses in the Middle East, Dubai and Saudi Arabia are booming. It’s time to get started setting up a cloud kitchen in the UAE. We can help with the entire process, from finding a commercial kitchen to getting your cloud kitchen license.
Are you looking for a trusted advisor? Contact us today!