Before the advent of multi-brand cloud kitchens, the evolution of delivery-only restaurants began with a single-brand cloud kitchen model. Cloud-kitchens, also known as ghost kitchens, virtual kitchens, and dark kitchens have proved to be major disruptors in the restaurant industry. A sharp rise in customer demands for food delivery, low investments, and the availability of third-party aggregator platforms were the main factors that popularized delivery-only restaurants. 

Specializing in a single cuisine, standalone cloud kitchens had a limited customer base and lesser margins. To combat menu fatigue, capture a larger market, and increase customer frequency, famous brands like Faasos and Box8 embraced the concept of multi-brand cloud kitchens. 

A multi-brand cloud kitchen model owns several brands, under one parent company. All the brands share large kitchen space, under one roof. Each brand is cuisine specific and positioned in a way that caters to different customer needs. Though there are different multi brand cloud kitchen models such as coworking kitchen space and cloud kitchen operators. Brands like TTSF, Freshmenu etc has paved their success story through this model and now it has been a tried and tested model for most of the cloud kitchen entrepreneurs.

How it can revolutionise the delivery business?

Vedant Pasari, founder of edabba commented that experts advise that brands maintain a smaller menu for user comfort. “Although, this may not optimize the use of kitchens. Cloud kitchens are able to operate multiple brands with focused menus, while optimizing their resources and achieving economies of scale. This helps improve market share with growth in revenue. When launching a new brand, we already have the infrastructure, supply chain, and a common team to assist,” he said.

edabba too has a sister brand called ebowl for customers who want to eat on the go. Moreover, they are about to launch three new brands, 'Kolkata Local' catering to Bengali cusine, Red Lantern serving Pan-Asian food, and Indian Kitchen Co. for rolls and snacks. “It is strategic for us to launch these brands given we have the know-how of cloud kitchen systems and target audiences,” Pasari shared.

According to an intricated report on the Restaurant Industry & Market Evolution, 52 percent of food service operators placed their bets on setting up a Cloud Kitchen or a delivery-only outlet of their brand. With minimum entry barriers and low capital costs, Multi Brand cloud kitchens are more profitable to set up than the traditional restaurant and even standalone cloud kitchens.

Better investment opportunity

As multi-brand cloud kitchens are not limited to a single cuisine they ensure a wider audience reach. Say a cloud kitchen brand famously known for Indian cuisine changes its menu to Italian, it might not do well with customers. However, launching the Italian cuisine items under a different brand name would work wonders. With multi-brand cloud kitchens, it is easier to bring a different set of customers to one’s platforms.

According to Sarvesh Chaubey, chairman of The Biryani House, it's a one-time investment and the possessors have a better capability to invest in the proper outfit, good structure, trained staff, and better technology to ensure standardization. The main focus is on the quality of both food and packaging as well as to ensure speedy delivery.

Most of the dynamics of traditional restaurants are unsustainable. There are high capital investments required for overheads such as fixed costs, high rentals, maintenance costs, etc. As the cloud kitchen business is devoid of front-end operations, there is no risk of capital involved. The cloud kitchen model only requires a one-time investment for streamlining the backend operations. Their owners have a better ability to invest in proper equipment, good infrastructure, trained staff, and better technology to ensure standardization. This also provides better stability to cloud kitchen restaurants and enables them to focus on the niche they serve by delivering quality in food and packaging. 

Utilization of the same infrastructure and resources

One of the best advantages of multi-brand cloud kitchens is that all the brands operate in the same space. Multi-brand cloud kitchens utilize the same kitchen space. Each brand that is specific to a different cuisine utilizes the same kitchen equipment, restaurant staff, and raw materials. The cost to run the kitchen of one physical restaurant brand and that of a multi-brand cloud kitchen is the same. Multi brand cloud kitchens have better economics as more demand can be easily generated from the same resources. Utilization of the same resources significantly reduces the overall costs of running the cloud kitchen.

“Multi-brand business models provide flexibility to restaurant operators, to have multiple brands with the unique positioning of each brand, and make an overall successful business unit,” Krunal Oza from Hustlers Hospitality stated.

He further commented that it's fairly easy to scale a cloud kitchen business on the hub and spoke model, which is having a central kitchen / hub catering to a broader radius of 20-30 kms, and serving through smaller spokes. Easy scalability contributes a lot to the success of cloud kitchen businesses. A cloud kitchen business model allows the operators to expand their geographical boundaries with ease and without having to spend high on real estate with hub and spoke model. Since the setup consists of only a kitchen and no dining space, it is easier to scale the business across countries in fact.

Few operational challenges that can’t be ignored

The biggest problem with such kitchen model is that it has replaced real estate costs with technological costs which are astronomical. Chaubey feels that this is because these kitchens have to communicate with a lot of food delivery apps. The orders have to be entered and communicated to the kitchen which is the nearest to the client’s position.

Trust deficiency plays a big crucial factor as the guests don't have memorable gests to talk about, oppressively confining the most dependable marketing channel for original businesses. “Since there isn’t a flux of demanding guests, there's no need for drivers to maintain the demesne frequently leading to significant neglect in hygiene and keep,” he added.

Indeed from a viewpoint of cookers, these kitchens are frequently small and warrant proper ventilation, leading to delicate working conditions. As possessors don’t visit their establishments as constantly, force destruction and pilferage are much larger problems due to oversight.