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Cloud kitchen business model

Cloud kitchen business model

What is this Cloud Kitchen?

We are hearing it quite often.

Is it a good business model or not?

If I’m very much interested in Food and I want to open my own restaurant

Would the cloud kitchen be a good way for me?


Today, we will talk about all this and with that, I’ll be talking about a business model

i.e, Faasos

Basically, we will be talking about Faasos’s parent company, Rebel foods.

So, first of all

we’ll talk about What does Cloud kitchen mean?

Cloud Kitchen means a restaurant

that doesn’t exist physically,

you cannot go and get food from there

you would be required to order the food online and

they will deliver it to your house.

Here, they do not require dine-in or any

exclusive space in some mall

They can open their outlet or kitchen anywhere

and start selling food from there.


You can also make food from your home and sell

online, that would also be considered cloud kitchen model

Here, so much investment is saved, you do not have to do any setup

or interior decoration

no work on flooring, or expensive cutlery sets.

you only have to pay for the chef who would make the food and

not even to the staff who serves the meal in a dine -in restaurant.

Now, it’s good to listen to it, there is a co. called Rebel Foods that

is executing it very nicely.


Everyone would have heard about Faasos, there are other brands too

Today, I’ll tell about all that in detail.

How do they do all that?

Together with that, I’ll ready a road map for you so that if you

wanna open a cloud kitchen of your own what all you would be required to do and how much would be the cost?

In 2011, this company was started

Jaydeep Barman and Kallol Banerjee starts it in Pune

Now, cloud kitchen is we see at that time wasn’t a big deal

Not many people were aware about it

and Faasos’s marketing is outstanding. I find it really nice.

This was one of the first kitchens that used to take orders on Twitter.

Now we’ll talk about funding. In 10 rounds they

have raised 124.6 million $


I’ll show you the stats in which all rounds how much they have raised

Recently how much they were funded, you can see all that.

1600 internet restaurants

205 cloud kitchens

and with that, they operate in multiple cities currently.

Now there were a lot of cloud kitchens I could have chosen any of them, why did I choose them?

because in my eyes

they are one of the best. I’m telling you why

because they have expanded so greatly. Now, what do you wanna eat? They started with

Faasos that serves roll

after it was successful, they expanded and diversified in other things


You wanna eat biryani, they serve biryani

Italian too, Pizza also and Chinese, South Indian as well

Basically, if you wanna eat exclusive cuisine they have

that too. They have worked on everything.

It was so great to see their portfolio. Faasos, Behrouz, that sells biryani

Biryani I don’t eat but when I researched I found out is very popular.

Lunch Box

in my office, I often order from Lunch Box

Lunch Box is basically a tiffin type of thing they have

Now if you wanna have lunch and didn’t bring it from home

order from them, discounts are anyway going on

You apply the discount coupon and get your lunch at cheaper rates around Rs.100.

which includes tawa rotis.

I would like to raise an issue

if any company person is reading this article

the tandoori naan or whatever you make Lachha parantha

That lachha parantha isn’t good

Till the time it is delivered, it becomes dry

So in that you should do some improvisation maybe change the flour or something. This is my suggestion because I keep on ordering from you.

I’m one of your regular customers.

Oven Story is also theirs. The oven story sells pizza.

Before going ahead let us

understand if you wanna open your own cloud kitchen what all are you

required to do?

They have opened so many restaurants in line and now they have become the

the market leaders. Now, what you have to do?

I have distributed the money in small amounts like what all you are required to have?

Also, lump sum how much would be your cost?

So, you add all this and it could be that the data I’m telling you might change.

If I’m saying the rent is 10k so it

could be that the place you are looking to open is not available at 10k rent.

Interiors also you are also not getting if such is the

the case you take the value that is there in your region.

I’ll just tell you the sheet in which

what all data you have to fill. The marketing budget I have decided

if you do not have that much you can lower it.

So basically you will get an idea if you wanna start this business how much capital

would be required? Rent I’m considering to be 10,000.

I’m assuming that till 5 months you won’t be able to break even.

For 5 months we won’t be able to come in profit.

So 5 months rent will go from our pocket that is


2,50,000 Rs. I’m considering the equipment that is

required to make food, all the appliances and gas equipment.

In licensing you would be requiring four licenses one is your FSSAI

the food license

second is GST as you would be listing on Zomato and all and also

would be accepting payments online.

One is fire security and safety, is also required.

and along with that, there is one MCD’s trade license which you would be required to have.

Health Tarde license it is called.

you can hire a person from outside and he would do that for you.

15-20k I’m approximately taking its cost.

I’m taking an approximate as you do it yourself

or get it done so the cost varies.

So whatever cost I’m assuming it can easily vary. The concept would remain the same.

In staff, I’m assuming two people in the starting

salaried at 20k and 15k.

Both would make the food.

many people would say what do you know man? People who make food takes salary of 8-10 k. No, it is

not like that. I have researched

on average how much salary does a person who makes good food takes?

If we are making a cloud kitchen, our taste

will only bring repetitive customers.

Taste and price, I would say both.

If the taste is good, he would come again and if he doesn’t like the taste he won’t come back.

Now multiplying it with 5, you have to do the calculation

and that much amount you would require.

Besides that, you would require a software that is needed for the bills.

Inventory management or I’ld say Point of Sale

software. For that, the cost would be around 15k lump sum

It could be that you do not manage yourself and ask the

two staff, you have hired to take care of the counter as well.

In starting I would recommend you should yourself sit and later you can

automate these things when you have multiple verticals and would be getting

a lot of orders

Now you can hire a person specifically to manage the billing


these are required in later stages once we reach there we will

do all that. Working capital I’m assuming to be Rs.50,000

for the ingredients and all as in the starting, you receive an order but money hasn’t come right?

If we do through Zomato, Zomato is not giving us the money right away. No?

So, we would be requiring some money in the form of working capital.

So 50k I’m assuming the working capital to be

it could be lesser than this as well

but in the starting for our calculation, I’m taking this amount

For marketing I’m spending 1 lakh rupees

because I feel in this business marketing will only

take you to the next level. In marketing, I’m also talking about packaging and all.

The best thing about Faasos is that

there packaging is also really nice. You feel so good seeing that only.

Also, in all there verticals

from I have ordered their packaging

is no doubt outstanding. I mean you feel a vision behind all that.

Now let’s talk about delivery if it is done through Zomato

that there is no tension. If we have to deliver ourselves then

this cloud kitchen business is basically a hyperlocal business

Hyperlocal business means

the place I’m sitting at, 5-km from that place only I’ll be able to deliver


3-4km radius only.

The second outlet I’ll open at some other place and there I’ll deliver

like this, I’ll open multiple outlets and become popular

in all those areas.

Now, I saw a thing called Dunzo, which is a hyperlocal delivery startup and delivers in 10 Rs.

I haven’t researched much about that

So, soon I’ll research and write an article about that.

From that, we will get to know if you want to start a hyperlocal delivery system

food or whatever

like this, so you can register at Dunzo or

I’ll be telling the alternatives as well

First, let me do the research then only I’ll be able to tell

Now we have just talked about cost, let’s talk about what we

will do in marketing. We’ll run social media ads in marketing

like get this much discount after applying this coupon

also as we talked we are doing hyperlocal marketing

which basically means in a particular area we are targeting

so in that area only we would run the ads

and market our business in selected areas only.

I would suggest

Facebook and Instagram ads only

there is no need to go on Google and god forbid you run search ads

and videos ads aren’t required as well if you are running your first oitlet

because in making that video you would incur cost more

than it would take to run.

Once you get some sales and have more outlets then

you can go on to video ads

In starting we have to put banners like this much % discount and close to your house,


Now lets come back to Rebel foods basically they

are going international in different countries like

Vietnam, Thailand, Indonesia, UAE

The United Kingdom and many more.

Firstly, they built this in India by the name Faasos

and after that

once they started getting profits they diversified in different

cuisines and started selling different tastes.

Now we have captured India we know,

we can do and started expanding further

One more thing about them that I really liked

now what they have done I told you about a lot of brands

They have bought a bigger kitchen

and in that made a smaller kitchen in that for different brands.

One chef is required to take care of the Chinese cuisine, that becomes the Chinese brand, one

sees the pizza, that becomes the pizza brand

now what happened in one restaurant only

different restaurants are running, management would be one only

Staff who would cook the food would be different

So basically it would be a specialty restaurant

at one place that would serve different brands.

Such an outstanding thing no?

Now, they would take it international as if someone has done business in India

he would easily do it outside as the market in India is

very dirty. People here order the food

and if they do not like it, register a complaint and get

their refund. Recently there was some incident with Amazon where

you do something of 1k, apply some coupon and would get

1800 as cashback. I don’t know what was going on.

In my class, some students did and earned a lot of money

I’ll see if I find some screenshot

many people created their Amazon’s fake id and ordered like hell.

Two services

I’ll talk about that I like and feel all the cloud kitchens

should do one is an elite pass that they’ve made

it is nothing but what Swiggy and Zomato are also doing.

Now to become an elite member either

you give 149 Rs. or order for more than 1800 Rs.

If you do any of these things you will become an elite member of ours

and once you become an elite member you will get a lot of benefits

Now, why is the company taking 149 Rs. or making people elite members who are ordering for more than 1800 Rs.


they want to give some benefits to their

regular customers.

If you have given 150 rs. to a company to get the elite


So you would think that my delivery is free

its there in Swiggy, if you pay a specific amount you would get free delivery

so you think my delivery charges won’t be taken I’ll order from here

Zomato would charge, Swiggy won’t

if the price would be same also, still you’ll order from Swiggy as you have bought the membership and

delivery charges won’t be charged from you.

Another service I liked was

Faasos bolt which is if they tell you to deliver food within 30 mins, they would and if they fail

the food would be free upto 200 Rs.

If we talk about big brands

there is Faasos, Cure fit, Box8, Freshmenu

So basically these are four of the biggest leaders

who are working in this sector in India

Oyo Rooms would be coming as well, Future group too

So basically many big players would be coming in this.

So in cloud kitchen, they would be seeing some potential that is why they are coming

I would recommend if you have some talent in food

or your mom makes Curry n Rice or anything immensely delicious

Make a cloud kitchen and sell it on

Zomato and all and tomorrow once you become huge

you can sell it on your own app. If we talk about the competitors, there is FreshMenu

which I found is doing something different

They are running a restaurant

other than cloud delivery they also

deliver the food from their restaurant.

that means there is no dine-in, it is take-away you either take away from the store


if you wanna order online, you’ll get the delivery.

A little bit they are different that I like about them.

Now Oyo rooms is planning to buy Freshmenu

it could be they might acquire Freshmenu as

they have to launch their cloud kitchens

Now there setup is all ready, infrastructure and everything

so take over that. I always beleive if you wanna

enter a new sector and you have money and there is some business, acquiring it

is a good option.

Acquisition means you buy that company and keep it with yourself.

If you acquire the full skillset would be yours.

If I talk about Walmart, they wanted to

come in e-commerce so they bought Flipkart, which is

operational in India. In india, there is a kind of fight in the e-commerce sector

So they bought that, all its operations and data and everything

became theirs.

So, this

was a very detailed article about cloud kitchen.

I hope you would have understood everything and must have learnt a lot of new things

and shared this article

on them from now on

Ask your mom and tell how amazing Curry n Rice she makes

there is no cost in the starting

as all the utensils you already have. You only have

to register on Swiggy and Zomato for which there is a one time cost that you have to pay

along with

the fees you have to pay to the government for

FSSAI and GST, that is the only investment

Rest the work starts. The work starts with such a small investment.

If you appreciate my work plz share as much as possible

Be curious

Be happy

                                                                ____________________________Gauhar Ali

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