Cloud kitchens suddenly appear to be the only rational thing to do, to manage increasing rentals and reduced margins, thanks to breakthrough technology that permits online purchasing. Cloud kitchen is a digital restaurant that has swiftly established itself as a strong restaurant model in the restaurant market.

Cloud business chains are a simpler way to run the restaurant business due to the intense competition, costly rentals, and escalating prices of commodities. According to Statista, the gross merchandise value of cloud kitchens in India in 2025 is expected to be at 2.3 billion US dollars. This demonstrates the enormous possibilities of this fantastic format. In this article, we will go over everything you need to know, to be able to generate revenue, for a food business with a cloud kitchen.

Driven and Scalable Multi-Cuisine, Multi-Brand Business Model

Under one parent kitchen, a cloud kitchen should encompass many brands and cuisines. All the brands must optimize the kitchen space under one roof. Each brand should be cuisine and category specific and tailored to meet the needs of various customers. This is essential because investors are intrigued and attracted towards such cloud kitchens that have a multi-cuisine and multi-brand business approach.

A multi-cuisine, multi-brand cloud kitchen is more advantageous to set up than a regular restaurant or even an independent cloud kitchen. The sole reason for this is that the former kind of cloud kitchens help tap into greater markets and cater to the diverse tastes of the customers. This way, they can expand their customer base at minimum investment expenses. These cloud kitchens serve a broader audience and can leverage growth levels from a single cooking unit. Better predictability in the business is provided by efficient resource usage, proper inventory levels, and controlled food costs.

Repeat Customer Ratio Has to be High

A brand should have a unique selling point (USP) that is investigated based on the existing competition's offerings, over food delivery apps. This USP should be divided into numerous areas. Consistency in the taste of their food products, quality, and punctuality in timely delivery processes account for a higher repeat customer ratio. Even the packaging of the products has a major role to play in the repeat customer ratio. Food packaging that is attractive, appealing, convenient, and ensures less spillage of food is certainly a hit amongst the customers. Ensuring that all these aspects are taken care of is important to garner investor interest.

Asset Light Expansion Model

An asset-light cloud kitchen or business model entails partnering with existing restaurant owners and transferring capabilities to them such as employees, methodology, and futuristic technologies, to enable them to transition from a fixed cost structure to a differential cost structure, improve adaptability, as well as encourage a shift of resources that enables a focus on the core capabilities.

An asset-light expansion model is a fundamentally plug-and-play model, a joint collaboration with the existing restaurant kitchen to make the most out of the one kitchen space. It also enables the operation of multiple brands from a single kitchen on a cloud model and aggregator platforms like Zomato, Swiggy, and Amazon. It is imperative that this model should be a part of your business strategy as venture capitalists are drawn towards such kitchens that associate with existing restaurant kitchens and optimally utilize the kitchen space.

Hub and Spoke Model

A cloud business should be built on a solid hub and spoke strategy with strong supply chain control, innovative packaging, and high-quality taste. It is essential to establish a good main hub with a well-managed supply chain as this is what grabs the attention of the capitalists and piques their interest. The hub should meet all the demands generated by the spoke. The advantage of this is that there will be no need for individual cooking equipment, and it also aids in taste standardization. This model also dramatically decreases the initial expenditure required and is an attractive model for investors.

Furthermore, appealing packaging transmits the brand value even before the product does. This is an indication of effective cloud kitchen branding without a physical high street presence. As a result, it is a critical component in establishing a solid brand. The name, logo, and tagline of your cloud kitchen business should be included on the packaging. It should be appealing, sleek, and clean in order to reflect the value and food quality of your brand. Venture capitalists are captivated towards cloud kitchens that have successfully established their brand presence. It would be a beneficial move for them to be associated with cloud kitchens that are brands and are known for food quality as well as unique identity and positioning.

Dedicated and Experienced Franchise Management Team and Business Model

A cloud kitchen business is not like a traditional store. However, cloud kitchens are virtual kitchens. They are food-producing industries typically built by food entrepreneurs. Investors are extremely attracted to the business models that do not entirely rely on food aggregators and delivery platforms but also cater to several party orders independently via other mediums such as phone calls, proprietary websites, etc.

However, the initial expenditure required to launch a cloud kitchen is prohibitively expensive. A good franchise model, with a hub and spoke model, is required. This will result in much lower investment requirements and great profitability with a scalability factor.

Franchising helps cloud kitchens to compete with much larger competition, allowing them to saturate marketplaces before these corporations can respond. It benefits both the franchisor and the franchisees. When opening a new branch, you must perform numerous managerial tasks such as locating a new location, employing employees, and so on. Franchisees, on the other hand, will do it themselves. As a result, a hub and spoke model necessitates dedicated and experienced franchise management teams, a strong business model, with structured supply processes.

Franchised networks can grow faster than company-run networks. This cloud business strategy is not only visually appealing, but is also a functional and scalable business model, which makes it the best option for raising funds.

Cloud kitchens garnering investor interest

When restaurants integrate technology with their business model and transition to a multi-cuisine and multi-brand model, they efficiently share information, avoid many human errors, save overhead costs, and speed up their operations. This allows them to increase performance by focusing on critical activities like taste standardization and consistency in supply, to meet customer demands as well as ensure the overall functioning of the business. Going further, a hub and spoke cloud kitchen model guarantees business continuity and prosperity with strong supply chain management, and efficient disaster recovery. Thus, in order to become a lucrative business, it should adhere to the aforementioned guidelines. When all of these aspects will be aligned and taken care of, the cloud kitchen will be able to successfully attract the investor’s interest and raise the funding that is needed to grow the business.