Why it’s the Right Time to Franchise a Cloud Kitchen?

Why it’s the Right Time to Franchise a Cloud Kitchen?

Less than five years ago, there was a time when restaurants dictated eating hours – 7am to 3pm and 7pm to 11pm( roughly depending upon locations) – and often customers’ meal times were coordinated with restaurants’ timings. Cut to 2019, when food aggregators have taken over the F&B industry, there is a rise of new concept – cloud kitchens.

These cloud kitchens, which are primarily a restaurant kitchen that takes online orders, without a dine-in facility, are the new game-changers in the market. Consider this: as per industry estimates, the daily online order volume of food has increased to 15 lakh per day since September 2018, while it was just 3.7 lakh in the same month previous year. The phenomenal growth of online food delivery market, which is estimated to be over $15 billion, has also had a direct impact on the growth of cloud kitchens in India. 

According to industry experts, these clouds kitchens take the brands to where customers are, instead of making customers reach out to brands. Global players like KFC too have not shied away from piloting the cloud kitchen concept. KFC’s stealth kitchen aims to be near the customer in this ‘always online age’.

Speaking to Franchise India, Sameer Menon, MD, KFC, said, “Being easily accessible to consumers is a must-have for any QSR brand, especially given today’s ‘always online’ consumer. The boom of online food delivery aggregators in India, coupled with stealth/cloud kitchen models, makes food ordering as easy as a click of a button. It has become much easier for brands to reach the customer, even at times when the customer isn’t within the proximity of the restaurant.”

According to Menon, the right locations for a stealth kitchen model will depend on multiple factors like locality, required asset type, food hubs in the vicinity, communities and households, real estate, etc. “Through the model of stealth kitchens that operate as delivery hubs, our core objective is to widen reach and move closer to the customers,” he says.

Franchise Opportunities in Cloud Kitchens

Leveraging on this growing demand, food delivery aggregator Zomato has launched Zomato Kitchens, where it will work with select restaurant operators thereby aiding in expanding their business to more locations, while ensuring they incur minimal fixed costs.This will also mean more options for customers. Through Zomato Kitchens, the company is looking at providing kitchen infrastructure services to select restaurant operators, and is seeking entrepreneurs to help setup and operate these kitchens.

How to Franchise a ZomatoKitchen?

Irrespective of whether an investor owns land or not, an entrepreneur can earn anywhere between Rs 2-4 lakh every month, depending on the location. To get a franchise of the Zomato Kitchen, the overall investment would be Rs 35-40L. While the minimum area requirement is 2000-3000 sq.ft, franchising is open for locations across India. According to the brand, the overall investment would be used for construction and set-up of the cloud kitchen only, while any remaining corpus will be used for operational and other running costs. After the launch of the kitchens, Zomato will pay a monthly fee to the franchisee, as per the agreement between the brand and the franchisee.

The brand has maintained that even if a franchisee doesn’t own a land, he can take it on lease and franchise the Zomato Kitchen.