If you are looking for a food-related business with a low investment and risk rate, this blog is for you to know about how to start Cloud Kitchen business Concept. You may have heard a lot about this cloud technology during the COVID-19 outbreak to manage rentals and reduce the margin to balance the profit. Now, a smarter kitchen or digital restaurant is the latest trend that has a market size to reach 71.4 Billion USD by 2027, with a CAGR percent of 12.1% from 2021 to 2027.
Let us take two different marketplace companies for your reference. According to statistics from Rebels Foods in the Indian market, revenue increased by over 39.2% from 858.6 crore INR to 1,195 crore INR within the 2022-2023 fiscal year. An international market cloud kitchen company Karma Kitchen had a market base value of 300 million Euros within a single funding round in 2020. Note: [This report value is sourced from Entrackr.com and Scoop.market.us]
Now let’s learn more about this global how to start Cloud Kitchen business, including its foundations, operations, and requirements for opening a Cloud Kitchen under your ownership in India.
What is a Synonym of Cloud Kitchen & How Does it Operate?
A cloud kitchen also works as a normal restaurant kitchen but it accepts orders via online ordering systems and runs without a dine-in facility. Or they can accept orders through various food delivery partners like DoorDash, Swiggy, Zomato, etc., it is essential to have an online ordering website or app that accepts orders from various sources.
(Eg)..Faasos by Rebel Foods, Hoi Foods, Box 8, and Biryani by Kilo, are some of the top cloud kitchens in India.
Establishing a cloud kitchen business may seem simple, but maintaining a cloud kitchen at a standard requires a well-maintained system.
Also Read this: How to Become a Cigarette Distributor in India: A Complete Guide
How to Build a Cloud Kitchen System in India? Or Guide Steps to Open Your Cloud Kitchen at Your Place
From this blog section, you will learn about Investments, licenses, location choosing, and more related stuff to begin a cloud kitchen on your own or as a franchisee partner with a leading cloud kitchen brand.
Spoon. No. 1: Deciding The Location At Your Phase of Cost For Cloud Kitchen Setup
The main phase of the reason behind the low investment business to open a cloud kitchen is the real estate cost. Choosing the location is the biggest way to reduce the cost of opening a cloud kitchen room compared to a regular dine-in restaurant with a vestibule.
Additional benefits: there is no requirement for a parking lot, high-end spot, or foot traffic area at this site. On the other hand, all that a cloud kitchen may need for cheap rental costs is a water supply and good cleanliness. Depending on the cuisine and food type you choose, the cost of setting up the kitchen with a list of items like equipment, raw materials, and unique packaging can range from around Rs. 2,00,000 to Rs. 30,00,000 at the most.
Spoon. No. 2: Creating an Online Food Ordering Platform – To accommodate all the sources of users
Once a location has been fixed, then you have to move to the next phase of the decision about the technology support to accept orders. There are many online ordering and delivery companies like Swiggy, Zomato, Foodpanda, etc to become a partner of it but these companies may charge between 18-30% (It may vary from restaurant to restaurant) of your revenue per order or they may be involved with a one-time integration fee for partnership.
So better since a cloud kitchen relies solely on its online flow to draw in customers, an own platform or website with the features to order food online with a payment option is an outright must. To handle your customers’ orders more effectively, you can contact a variety of website developers or POS software integration services tech organizations. It gives plus points to order and track their orders on a real-time basis to make it more user-friendly and handy for our customers.
Read More: Petrol Bunk Business in India | How to Start, Investment
Spoon. No. 3: Licensed to be Authorized Cloud Kitchen Company in India
License obtaining is essential to being a hassle-free cloud kitchen restaurant in India. So take note of the licenses below that are essential to operating your first month of business without any obstacles.
Licenses Types & Essential Notes
| FSSAI | Food Safety and Standards Authority of India (fssai) will carry out all legal compliance, food safety assurance, customer trust, and business expansion opportunities. It is a renewable type of license so it needs to be up-to-date yearly-wise. | www.fssairegistration.org [Click here to learn step-by-step about how to register on the fssai website officially] |
| GST registered company (License) | Goods and Services Tax (GST) may strategically support the legality, financial efficiency, and market competitiveness of the cloud kitchen business. It is only mandatory when your annual turnover ranges between 20 lakhs to 40 lakhs INR. | www.gst.gov.in [Official website to register your company with GST REG-01 form for your GST Identification Number (GSTIN)] |
| Municipal Health Trade Licenses | Part of the important licenses is to ensure your cloud kitchen compliance with health regulations and prove you operate legally in their jurisdiction with all permits. For health trade licenses, it may cost between Rs. 500 to Rs. 50,000 with an average registration fee of Rs. 5,000. | Legal website drive page to know your procedure. https://tnurbanepay.tn.gov.in/TradeLicense.pdf |
| Fire Licenses | Need for legal compliance, stating safety measures, and protection insurance for both employees and property from potential fire hazards. General cost ranges between 2,000 to 20,000 Indian rupees based on company scale. This is a renewable type of license so non-residential buildings like cloud kitchens may need to renew every three years. | www.tnfrs.tn.gov.in Official Gov. website to know about MSB procedure for your NOC/Fire License. |
Spoon. No. 4: Staff Hiring Process to Make a Cloud Kitchen Family
Assembling a proficient kitchen team is the backbone of a successful restaurant so gathering a team is a critical part of the cloud kitchen process. Because the whole menu depends on your chef and customer satisfaction depends on your whole team, you may need at least two chefs, two helpers, and one housekeeper. Here in the online kitchen model, at least five in-kitchen employees are needed plus three employees for customer support like delivery personnel and order management desk, or you can partner with a third-party delivery service.
Spoon. No. 5: Marketing and Brand Advertising Must At the Beginning 🔰
You’ll need to invest in marketing-related branding to get popular around your surroundings with an iconic kitchen brand. It might cost around Rs. 10,000 to RS. 1,00,000 depending upon your style of advertising. And this marketing-related work may be skippable if you tie up with existing or franchise brands.
Add up all of the expenditures made up to this point, such as the Total Estimated Cost to Operate a Cloud Kitchen Business: Here, let’s divide the expenses into different categories⤵️
Franchise Unit of Cloud Kitchen Business
| Operations | Charges in Rupees |
| Rent for space (150 to 300) sq ft_Min (Rent rate may vary with tier 1, 2, 3 cities and sqft) | Rs. 45,000 to 1 lakh or get a lease place with 7 lakh per year |
| Equipment and kitchen utensils | Rs. 3.5 to 4 lakh at range |
| Interiors design | Rs. 2.5 to 3 lakh at range (Depends upon the Sqft of the shop) |
| Licenses and other registration expenses | Rs. 20,000 to 60,000 at range |
| The first month of running cost with 7 to 8 employee | Rs. 1 lakh at maximum |
| Skippable cost if your cloud kitchen is a Franchise Unit | |
| For an Active social media presence | Rs. 30,000 per month |
| Branding via packaging cost | Rs. 50,000 to 60,000 in range |
| Total Approximate Cost | Need 20 lakhs to 30 lakhs INR At Max of Investment |
Are you in mind to start a food business with a maximum profit and want to smooth your path toward this cloud kitchen? Franchise Bhoomi is here to give you support and an informed decision to start your Own Cloud Kitchen in India.
If you’re considering beginning a cloud kitchen business, the cost is just one part of the step. With good planning, execution, and market research decisions, your cloud kitchen can become a highly profitable one. Looking for clear guidance or franchise opportunities in the food industry? At FranchiseBhoomi – Your trustable franchise support partner, we connect you with top franchise brands in your chosen industry to kickstart your entrepreneurial journey like this cloud kitchen field.
Whether you’re new to the franchise world or a seasoned business owner of opportunities -no problem- Franchise Bhoomi is here as a one-stop platform for finding the right franchise business at your place in India.
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FAQ
A cloud kitchen operates entirely for delivery through online platforms like Swiggy, Zomato, and Dunzo. It does not offer dine-in services, helping reduce rental and staffing costs compared to a traditional restaurant.
Franchise: Lower risk since it’s an established brand.
Requires following the franchisor’s rules and may include royalty fees.
Example: Rebel Foods (Faasos), Box 8.
Own Brand: Higher flexibility and control over menu and operations.
Greater potential for long-term profitability but with more risk.
Tip: A franchise is ideal if you’re new to the F&B industry while starting your brand works better if you have experience and unique ideas.
Franchise Setup: ₹5 lakhs – ₹15 lakhs
Independent Cloud Kitchen: ₹3 lakhs – ₹10 lakhs
This covers rent, equipment, licenses, technology, and initial marketing campaigns.
POS Systems: Petpooja, Posist
Inventory Management Software
Aggregator Integrations with Swiggy/Zomato
Marketing Automation Tools (like Buffer or Hootsuite)
Investing in the right technology ensures operational efficiency and seamless order management.
The average net profit margin ranges from 20-30%, depending on food costs and aggregator commissions (10-30%). B2B investors or franchises should focus on menu optimization, packaging efficiency, and reducing wastage to maximize profitability.
Reduced Time to Market: Franchise brands have existing customer bases.
Training and Operational Support: Standardized processes ensure efficiency.
Shared Marketing Costs: Franchisees benefit from the franchisor’s campaigns.
Consideration: Look for franchise models with favorable royalty rates and marketing assistance.
Yes. Some financing options include:
Bank loans and NBFCs
Government schemes like Mudra Loans
Angel investors or venture capital funding for scalable models
Building a solid business plan is crucial to securing funding, especially for independent ventures aiming for rapid growth.
