CloudKitchens® spaces have been ballooning in popularity, and the reason for this is simple: they offer a more streamlined and efficient way of running a restaurant by removing the bottlenecks of a dine-in location and going all-in for delivery orders. But they aren’t exactly a new idea. What’s changed is that they’ve become part of mainstream F&B trends thanks to operators like Smart City Kitchens making them accessible and far better known. Combined with the effects of the pandemic, more and more people have started ordering their food online, as opposed to dining at a restaurant. What this means for restaurants is that they need to adapt in order to survive – and opening CloudKitchens® space is arguably the best way of doing so. However, they still remain a relatively unknown business model, seen in the repetition of FAQ about cloud kitchen.
Here, we have compiled some of the most frequently asked questions (FAQs) people have when considering opening a delivery kitchen in Singapore:
- What is a CloudKitchens® space?
- How do CloudKitchens® spaces work?
- How does CloudKitchens® model generate profit?
- Why are CloudKitchens® spaces so popular?
- What are the different kitchens available?
- How expensive is it to operate a delivery kitchen?
- What locations do Smart City Kitchens operate in?
- What is included with Smart City kitchens space?
1. What is a CloudKitchens® space?
CloudKitchens® delivery kitchen, also known as a delivery-only, dark, ghost, or virtual kitchen, is a form of a commercial cooking kitchen with a delivery- or takeout- centric business model. Located in residential areas and within the delivery radius of a largely untapped customer base, delivery kitchens are able to reach a greater number of customers than a traditional restaurant.
In a CloudKitchens® delivery kitchen, there is no physical storefront, dining area, or cashier. This removes the need for the huge front-of-house teams, instead of allowing restaurants to focus exclusively on staff who work to fulfil orders and prepare food.
2. How do CloudKitchens® spaces work?
The delivery-centric business model is the opposite of the dine-in business model. When customers order food from your restaurant via online delivery apps (Foodpanda, Deliveroo, GrabFood, etc), you prepare the food, handle the order, and hand it off to the courier all from your kitchen space. This low-cost, high-efficiency setup gives restaurant owners the opportunity to increase their profit margins in a manner that would have been near-impossible in a traditional restaurant.
3. How does CloudKitchens® model generate profit?
With smaller teams, less food wastage issues, and lower operating costs together with the potential for more orders, delivery kitchens are able to earn more profit than a typical dine-in restaurant by eliminating bottlenecks and streamlining processes.
CloudKitchens® spaces are also commonly used to run more than one brand from the same space. This allows you to nurture synergy between different brands and ensure your kitchen is being used at peak capacity throughout the day, all while doubling up on expensive equipment and supply chains. Read more about recipe costing here.
4. Why are CloudKitchens® spaces so popular?
In 2021, the food-delivery industry in Singapore is expected to value more than $1 billion – and it’s forecast to continue rapidly growing in the years ahead. CloudKitchens® spaces provide businesses with an efficient, cost-saving, and pragmatic approach to joining the food-delivery market. They offer restaurants the opportunity to adapt to the new trends transforming the industry, boosting profit margins and scaling operations.
5. What are the different kitchens available?
CloudKitchens® spaces can vary depending on the needs, location, and cuisine of the brand. We offer a variety of kitchens to our clients ranging in size from 100 sq ft (small) to 230 sq ft (large). Within this space, our licensees are encouraged to experiment and find the most efficient layout for them and their equipment. Read more about different location kitchens.
6. How expensive is it to operate a ghost or cloud kitchen?
One of the most popular FAQ has to do with the cost surrounding a cloud kitchen. CloudKitchens® spaces are significantly cheaper than their traditional brick-and-mortar restaurant counterparts. As little as $10,000 can get you started in a CloudKitchens® facility, which is in stark contrast to the $200,000 or more you can expect to pay for a brand new dine-in location.
7. What locations do Smart City Kitchens operate in?
We have kitchens across the country, serving large volumes of potential customers. Depending on your needs/desired location, you can rent a CloudKitchens® delivery kitchen in:
- Telok Ayer
- Serangoon North
- Bukit Batok
8. What is included with Smart City kitchens space?
On top of the kitchen itself, Smart City Kitchens provides partners with a number of additional services and benefits geared towards making our spaces simpler and easier to work in. This way, you can focus on growing your business rather than sorting out time-consuming logistical details. These include, but are not limited to the following:
- Daily cleaning services
- Wifi & phone line
- Security services
- Central air conditioning
- Commercial refrigeration
- Shared dry, cold, and frozen storage
- 24/7 Building access
- ANSUL fire suppression systems
- 3-Phase electricity
- And much more
Smart City Kitchens is leading the charge when it comes to F&B innovation in Singapore. If you still have questions on our cloud kitchen even after reading through the FAQ, don’t hesitate to complete the form below and get in touch with us! A kitchen sales member of our team will be in contact as soon as possible.