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Cloud Kitchens Continue to Remain on Cloud Nine

Cloud Kitchens Continue to Remain on Cloud Nine
The Siliconreview
06 October, 2021

“Licensing is an integral part of setting up a restaurant. Few licenses are essential to procure in the first month of operations for a hassle-free business. These are FSSAI license, GST Registration, Municipal health trade licenses, fire licenses, etc.”

A cloud kitchen, also known as a ghost kitchen, is a restaurant that operates online. With the advent of cloud technology, these virtual kitchens shot to fame since their first appearance in New York in 2010. There’s a concrete reason as to why restaurateurs in the city chose this model while abandoning their original brick-and-mortar businesses: Rent was skyrocketing. More recently, when the Covid-19 pandemic hit, cloud kitchen space got even bigger with more brands opening their subsidiary ‘delivery only’ kitchens. Again, there’s a reason that why established brands launch their online kitchens other than expanding their footprint: The food delivery industry is booming and it continues to expand wings across continents. However, these established brands face challenges operating these kitchens as they find it puzzling to manage two different business models parallelly. The brick-and-mortar facilities are conventional and these brands are not accustomed to running a ghost kitchen.

On the other hand, individuals who run cloud kitchens have shown promising results. Let’s analyze how running a cloud kitchen is a lucrative business. First things first, location is not mandatory, wholly depends on online ordering mechanism (that promises better reach), basic kitchen equipment will suffice, and minimum staff requirement. With that said, no or less investment is required to launch a cloud kitchen. However, there’s a small hitch that might play a spoilsport: acquiring the license.

In addition, the popularity of a cloud kitchen relies on how efficiently it collaborates with third-party food delivery platforms, such as Grubhub, UberEats, etc. A better reach is directly proportional to an increased number of orders.

In a nutshell, launching a cloud kitchen is as convenient as ordering a meal online. Although there must be proper research in place that going forward will play a vital role in running the business effectively. In countries like India, cloud kitchens are fairly a new concept. It takes just Rs 10, 000 to acquire the license and start the business at any given place.

According to Restaurant Times, “Licensing is an integral part of setting up a restaurant. Few licenses are essential to procure in the first month of operations for a hassle-free business. These are FSSAI license, GST Registration, Municipal health trade licenses, fire licenses, etc. It is advised to hire an agency for applying for all the permits because it is the most tedious and time taking task. Apart from this rest of the permits would cost you around Rs 10,000 (if the FSSAI license is applied for one year).”

The quote used in this piece was extracted from the mentioned publication.