Complete setup of cloud kitchen in Dubai Explained

Cloud kitchens have  become quite trendy all over Dubai and Abu Dhabi. This business model is lucrative and thereby more and more entrepreneurs are setting up cloud kitchens and earning profit from it. If you have a plan to launch your own ghost kitchen in Dubai, then you have hit the right place because Prospr is here to guide you regarding this culinary business.

What is a Cloud kitchen?

It is a commercial kitchen that focuses completely on food proper and delivery without offering any on-site dining option to customers. Although you don’t open a restaurant for dine-in but still you need to complete the company setup in Dubai like other commercial kitchens. It is equipped with an advanced kitchen display and delivery system. Normally, cloud kitchens are partnered with third-party delivery platforms such as Uber Eats and Zomato.

Benefits of cloud kitchen in Dubai

Here are some benefit you can obtain from setting up  a cloud kitchen business in Dubai

• Reduce Space: You don’t need to provide a dine-in option in your kitchen. Thereby, you need to rent a small space. Your rental bill significantly decreases when you lease a small space. It allows you  for setting up a business in Dubai from a compact space, all you need to do is to set up an advanced kitchen display for efficient order handling.
• Lower Staff: Another way to cut the cost with cloud kitchen setup is to  focus on your main food prep and delivery staff, you don’t need to hire front-of-house staff such as waiters. Your overall food operational cost decreases as a result.
• Reduce overhead cost: As you aren’t setting up any physical space, that means you won’t be paying for interior décor, furniture and utilities. Your overall bill and cost will decrease with this kind of food business setup in Dubai.
• Easy Access to wide customer base: When you partner with a wide variety of delivery platforms, it will allow you to get attention from a wide customer base. The more delivery partners you have, the more orders you will get. As a result, you enjoy business growth in less time. 

Read the guide about how to start a limousine business in Dubai

How to set up a cloud kitchen

Here are some steps you need to take for starting a cloud kitchen in Dubai:

Step 1- Define your niche 

Since cloud kitchens are a trendy idea, you will face a lot of competition. If you want to stand out from the crowd, you need to choose a specific niche. If you have specialty in some kind of food, you can start a cloud kitchen in that niche. When you have little or no idea about industry, it’s always a good idea to start with market research. It means conducting market surveys and looking into dietary preferences and current food trends.

Do you need help in picking your kitchen niche?

 If yes, then we are here to help. Our business consultants have helped thousands of entrepreneurs to set up successful kitchen businesses in Dubai. So, if you need help with market research, we can do that on your behalf.

Step 2: develop a business plan

Now it’s time to start mapping out your business plan. 

The very first thing you need to do is to choose the legal structure of your business. Always pick the right business structure as it will affect your operational flexibility, liability and taxation. 

Setting up a limited liability company in Dubai is a business structure. In this case, foreigners hold 49% share of business while 51% is held by a UAE national ta works as a sponsor.

Free zone entity is another common business structure where entrepreneurs become 100 percent owners of the business. You enjoy tax exemptions in the free zone.

Sole proprietorship is another legal structure where you have full control over your business but you are personally liable.

Once you choose the legal structure of your business, you need to plan a complete menu. It’s always a good idea to start with basic items and a special one and then expand later on. Adding too many items will affect the quality of your business. Remember, you can grow your cloud kitchen in Dubai only when you offer quality.

Next thing that should be part of your cloud kitchen’s business plan is supplier and inventory management. You need to establish contact with suppliers who provide quality ingredients as per your demand. Buying or leasing a warehouse should be part of plan as you need space to manage inventory and prep food.

Step 3- Cloud kitchen registration

Once you specify the legal structure of your business, you need to register your cloud kitchen with the Dubai Department of Economic Development DED.  

Step 4-Obtain required license

Since you are going to run a food business, you need to acquire a wide variety of licenses. You can obtain a Commercial license from DED. The Dubai Municipality’s Food Safety Department will issue food licenses. If you want to deliver alcohol, you need to get a liquor license. 

Step 5-Choose location

Although you aren’t offering a dine-in option, you still need to choose a location that offers easy access to the target market. Don’t choose a far off location as it will increase delivery charges and you won’t be able to save much. 

When picking a location for your kitchen, you need to keep in mind going with a layout that offers maximum efficiency and workflow. Always pick a location with fire safety equipment, and proper ventilation. 

Step 6 -Partner with delivery platforms

There are many food delivery platforms in Dubai such as Uber Eats, Zomato, and Deliveroo. These portals allow you to target an audience easily. You can hire your delivery staff. 

You need an inhouse order management system as it allows you to take care of all the orders and streamline your business operations. You can set up an official website or an app, depending on your budget. 

Must read guide about can a non citizen start a business in Dubai? 

Step 7-Staff management

Now the next step is to hire staff for your cloud kitchen. It includes chefs, prep staff, and kitchen management. If you have your own delivery and order system, you need customer service. Since you are going to obtain a commercial trade license, depending on your jurisdiction, you can issue work visas and permits for your employee. It offers you an opportunity to hire foreigners as your staff.

Understand: Difference between commercial and professional trade license in Dubai

Operation of a cloud kitchen is different from a traditional kitchen. You need to train your staff regarding this business model and train them to ensure food safety and handling. They must know how to prepare and pack food with efficiency.

Another essential thing to keep in mind is to set up proper payroll systems. Make sure you follow UAE Labor law during staff hiring and management.

Step 8- Open a bank account

Once you have a trade license in your hand, you need to open a corporate bank. It’s vital to have a bank account as you need to streamline your business transaction.

Step 9-Secure insurance coverage

Before you launch your cloud kitchen Dubai, you need to get multiple insurance coverage. Property insurance allows you to get protection for kitchen’s physical assets from damage or loss. You need to acquire liability insurance as it helps you get protection from accidents or personal injury on your property.

Product liability insurance coverage allows you to get risk coverage for your food products against health insurers. Worker’s compensation insurance is another good coverage to attain.

Step 10- Develop cloud kitchen brand

Before you launch a cloud kitchen in Dubai, you need to set up a brand. Cloud kitchen branding includes designing a logo, developing a website, and creating unique selling propositions USP. When it comes to marketing, you can utilize both traditional and digital marketing techniques. 

Also read about 15 successful online business ideas in UAE

Step 11- Launch cloud kitchen business in Dubai

Before you officially open your cloud kitchen in Dubai, it’s a good idea to begin with a soft launch. You will run your business operations and gather feedback. Always plan a grand opening as it will allow you to gather attention from a wide variety of customers. Get help from food bloggers and influencers as they will help you earn more business and enjoy visibility.

Cost of setting up cloud kitchen in Dubai

If you want to start a cloud kitchen Dubai, you need to spend AED 50,000 to AED 100,000 on this business model. The cost of cloud kitchen includes renting a commercial kitchen space, obtaining required license, and shopping all the required kitchen equipment.

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How Prospr can help you with cloud kitchen Dubai setup

Planning to start your cloud kitchen in Dubai? Do you feel overwhelmed with this business setup idea? Fret not, as Prospr’ business consultants are there for you. Share your kitchen niche, some basic details or documents, let us handle the rest for you. We will make the whole process of cloud kitchen setup effortless for you, Call now. 

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FAQs

Are cloud kitchens allowed in the UAE?

Yes, cloud kitchens are allowed in UAE. If you are interested in setting up a cloud kitchen in Dubai or Abu Dhabi, you need to get a license from DED and Dubai Municipality Food Safety Department. If you are planning to set up a cloud kitchen, you need to follow safety and health requirements to prep and deliver food all over Dubai. There are strict health and safety requirements, which if you meet let you run cloud kitchen operation smoothly and legally all over UAE.

What is the difference between traditional and cloud kitchens?

Traditional kitchens focus on food and service. They need to prepare the food and also to provide a great dining experience to their customers. On the flip side, cloud kitchens don’t focus on dine-in and they put complete focus on the food delivery model. This business model eliminates dining space and waiting staff to reduce cost of their business and offer quick delivery service.

Why is the trend of cloud kitchens so popular in Dubai?

This business model has created a great buzz all over UAE during Pandemic when contactless dining and delivery became a norm. Since this model easily blends with a fast paced lifestyle and rapidly growing food delivery market, thereby many physical kitchens transform into cloud kitchens. They enjoy instant reduction in cost with maximum online order potential.

Another reason that made this business idea quite famous all over Dubai is diverse expatriate population. This city attracts entrepreneurs and businessmen all over the world. They have their own unique taste. Some expat are interested in Chinese fast food while other crave Mexicans. Cloud kitchen owners can easily meet demands of these expats and bring variety on their menu without extending cost.