How do I set up a cloud kitchen in Dubai?

The UAE’s online food and beverage market is booming. Market sales reached $412 million in 2020 and are predicted to climb as high as $619 million by 2025.

The country is already recognised as a go-to market for restauranteurs, chefs and established brands in the online food and beverage industry thanks to its acceptance of new technology and high usage of food delivery apps.

Covid-19 has only served to accelerate this growth as restaurant businesses have increasingly looked to food delivery as a way to sustain or supplement their revenues during a time when consumers are increasingly preferring to order in.

As food delivery has boomed, this has seen the growth of cloud kitchens as a more direct way to get food to the consumer while at the same time bypassing some of the expenses associated with the traditional restaurant format.

What is a cloud kitchen?

A cloud kitchen is a commercial facility used expressly for the preparation of food intended for delivery. Unlike a traditional restaurant, it doesn’t offer a dine-in service and generally orders are accepted via a website, online app or telephone number. Popular apps such as Deliveroo, Uber Eats, Talabat and Zomato are important to the success of the cloud kitchen business and therefore partnering with one or more of these companies is pivotal to the success of this delivery only format.

Benefits of starting a cloud kitchen service.

This is a good business model as it doesn’t rely on the requirement for restaurant premises in a prime location and the high associated costs which can quickly eat into potential profits, so initial investment is comparatively lower than a traditional restaurant. Other costs associated with a physical restaurant such as front-of-house staff or restaurant decoration and signage are also avoided.

Cloud kitchens can also act as a good, low-risk platform for established restaurants to trial new dishes or concepts before unveiling them in the restaurant itself.

Other considerations:

• How to accept orders
  One of the most important operational decisions to make when opening a cloud kitchen is how to accept and execute orders. While phone calls and emails can be accepted, partnering with an established online delivery app will greatly improve efficiency and exposure and therefore profitability.
  
• Location
  While restaurant premises are not a concern for the cloud kitchen model, the location of the kitchen itself is still an important consideration. If you open the kitchen too far from your target market, you may be unable to deliver the meals in a timely manner and as freshly prepared as expected.
  
• Customer Data
  Third party online apps are a great tool for reaching a larger potential market and increasing the profitability of a cloud kitchen business. However, they control the data from your customers which makes it harder to understand customer personas and therefore effectively drive repeat business. To combat this, you should try to also maximise direct orders from your company website and other social media channels in order to gather sufficient customer data to finetune your offering and marketing efforts.

Licensing requirements:

In order to legally open a cloud kitchen in Dubai, you will need two licences: A trade licence and a food licence.

• Trade Licence
  Before obtaining your trade licence, you should decide in which jurisdiction you want to operate, on the mainland or in a free zone. For a mainland company setup, you will need to submit an application to Dubai’s Department of Economic Development (DED) for approval of your chosen trade name and business activity. Free zones have their own managing authority that will handle trade licence applications.
  
• Food Licence
  Food licences are issued by Dubai Municipality’s Food Safety Department. In order to obtain this licence, you’ll be required to submit a floorplan of your food preparation area. This should include all entrances and exits, windows and ventilation points as well as any food storage areas, food processing equipment and washing equipment.

Finally, once the business has opened, you will also be expected to adhere to Dubai’s food code. This is a set of guidelines ensuring that all food consumed within the emirate has been properly, stored, handled, prepared and served.

How can PRO Partner Group help?

PRO Partner Group (PPG) has in depth knowledge of government regulations and business standards in the UAE, and throughout the Middle East. We can advise you on all the requirements for setting up a cloud kitchen in the UAE and assist you with obtaining the relevant Trade Licence, Food Licence and to ensure that you operate with the Dubai food code.

If you need assistance on this or any other related company setup, restructuring, local partner or PRO support matter in Abu Dhabi, Dubai, the wider UAE, Oman, Qatar or Saudi Arabia then please do get in touch with us on +971 (0)4 456 1761 for Dubai, or +971 (0)2 448 5120 for Abu Dhabi, email us at info@ppg.ae or complete the contact form below and we will be delighted to assist you.