 Hey guys my name is Wilson today we're going to be talking about what is the new phenomenon cloud kitchen aka known as ghost kitchen virtual kitchen delivery only restaurants also we're going to be talking about the pros the cons who is it for and how you can take advantage of this movement so then that way you're going to be in the forefront of this movement and how to first mover advantage if you guys like this video or if you guys want to show some support make sure you smash the like button because that's going to show me that this is the type of content you like and I'm going to make much more of it specifically for you nonetheless let's dive right in so what is cloud kitchen cloud kitchen is a restaurant with no physical storefront and what does that mean that means that people are operating in a commercial centralized kitchen and in turn they partner up with third party delivery service apps such as uber eats grub hub postmates in order for them to distribute their food offering to the public so how do you visit these cloud kitchens you can these are restaurants without storefronts and the only way you can consume their product is by ordering through these different apps that I mentioned before their focus specifically are on mass production they just want to produce a ton of items and service through all these delivery apps now you might be thinking is this something you want to invest your time energy into 100 yes by 2022 this food delivery service app industry is going to be more than $70 billion $70 billion is what we're talking about so yes this is definitely just in the infancy the very very beginning of the trend the movement that we're talking about which is the reason why if you pay attention right now you can actually take advantage and be in the forefront of this crazy movement that we're talking about we're talking about the ex-CEO of uber has raised more than $400 million just this last year into his own cloud kitchen we're talking about tons of people jumping into this industry so without further ado we're going to dive into the pros and the cons of this business model for you so the reason why this model is so so popular right now and is super promising is because of the pros the pros of not needing a physical storefront not needing to own your equipment not needing to go through all the business license infrastructure and the months and months of getting locked down into a space and renovating the space and talking to like licenses talking to like regulators to get your license just so you can operate no you don't skip all those you don't need any of those because you can just go into a cloud kitchen facility sign a lease contract for a year to two years and you are ready for a business okay it is that easy which is the reason why so many people are jumping into this model and this is why it is super super beneficial and it's definitely something that a lot of people are enjoying right now because you're not being locked down physically to one location only okay this is a huge benefit for people who are in the food and beverage game now another benefit is that you don't need your full front of the house staff you skip all those you don't have to worry about whether it's going to be raining or sunny or whether it's going to be a Thai food you don't need to worry about all those because you don't need to worry about walking traffic you don't need to spend thousands of dollars on a premium location because you're relying specifically on food delivery apps on the contrary when it's raining when there's Thai food your business will probably spike okay so you're going to skip all the training you don't need to worry about customer service because all those food delivery apps are going to worry about that for you all you have to do is focus on your craft focus on your delivery focus on producing good quality food for your customers and that's the benefit the pros of running a delivery only restaurant oh totally forgot to tell you another major pro is the investment investment is substantially lower than opening a full-scale brick and motor store because once again i touched up on the fact that you don't need your equipment you don't need to go through all the licenses you don't need to run in capital you don't need any of those all you need is to be able to go into leasing these cloud-based kitchen so in that way your investment becomes substantially lower to begin with you you have a recipe in mind and you can already go into business it is that easy which is the reason why this is such a beautiful model that i can't wait to share with you but nonetheless it does come with its cons now what is the cons of running a delivery only restaurant it is because you have no visibility you have no way of doing promotion or marketing with walk-in traffic and now for some of you you don't really care about that you don't want to walk in traffic so which is okay but a major major con is the fact that you're relying your whole lifeline the blood line you're being holed by the neck by these food delivery apps and what that means is that if they do decide to favor a certain restaurant then most likely you're going to be out of business if they do decide to charge you a premium to charge you five percent more you don't have any leverage or bargaining power with these food delivery service apps big big detriment to any business if you rely solely on one point of distribution which is the reason why i highly recommend any of the people that i talk to that if they are in this business and they're that they're leveraging this model that they're leveraging this model for only a short period of time let's say a year to two years until they're able to build a substantial base until they're able to build their own brand name until they can prove their own concept and then they should move out and rent their own brick and mortar to invest in a in this model that has worked for them and then that way you're not being putting all your eggs in one basket you're diversifying so then even if the food delivery services decide to kick you out or do they do is decide to raise their rates and you can now have much more bargaining power you can tell them hey you know what i have a restaurant down the street i don't really need you guys you know what see you later you can still have the opportunity to do that that's called leverage right now another cons of going through these delivery-only restaurant and using these cloud-based kitchen is the fact that you don't own your customers the delivery apps own your customer and why would you want to own your customer it is because at the end of the day in a food-based business it's all about the community it's all about getting your loyal customers to come back again and again to the to have and enjoy your offering so many times we go to that special place a special restaurant to celebrate a milestone maybe because we have that emotional connection with the owner there or with the feeling or the vibe there which is the reason why we are lifelong customers to these restaurants and in the food and beverage industry this is super important for you to be able to build your own customer profile and this is exactly what is lacking in this business model so once again i highly recommend that you leverage off this model build it for a year to two years and build your own only after you've proven that you have a successful recipe and a successful model now that you understand the pros and cons of cloud kitchens we're going to be talking about the three different types of cloud kitchen available for you and then now you can choose which one you want to pursue the number one type of cloud kitchen are the ones that are special specialized exclusive to delivery apps such as uber delivery they have their own kitchen they have their own cloud kitchen that they created and if you're operating inside these cloud kitchens you can only service their delivery apps such as uber eats or delivery room now the advantage of doing something like that is that you get premium premium spot because they want you to be successful these delivery apps want you to be successful so then that way you can drive the much more value and then turn their customers are happier because they have a better experience now this disadvantage of going through these different kitchens that are super exclusive to their own delivery apps is the fact that you're missing out on a big chunk of pie you're only servicing the people that use delivery room you're only servicing people who use uber eats you're missing out on people who use grub hub you're missing out on people who are using postmates or like skip the dishes or any other food delivery apps out there there are the pros there are the cons you get to choose which one you like the second type of cloud kitchen are the ones that are non-exclusive non-exclusive ones that we're talking about are like cloud kitchen or kitchen united these places just operate as a huge commercial kitchen and you can operate within their own facility and in turn you can partner up with any food delivery apps out there as you wish like i said but the cons of doing that now that you have more flexibility and you're exposed to much more people and customers is that you don't get that special feature you don't get that special treatment from uber eats you don't get that special feature from these delivery apps because you're not exclusive with them once again it's your choice at the end of the day i'm really suspecting and speculating the fact that you can actually pay premium to be listed as a higher um and to run ads in these different platforms once again that would be able to counteract the non-exclusivity okay the third type of cloud kitchen we're talking about mobile cloud kitchen we're talking about these giant food trucks that go around the neighborhood like zoomies cloud kitchen um these guys are basically food trucks but then they rent out their kitchen in a closer proximity to your neighborhood or whatsoever that itself is an added bonus because the convenience and also the delivery time now the disadvantage of that is that not this type of model is not super popular because you're not servicing a huge wide range of people and you're always operating within a food truck um the space is not as clean the space is much more cramped but the cost is substantially lower than if you were to rent a commercial kitchen like cloud kitchen and so on so forth these are the three types of cloud kitchen so at the end of the day there's no pros or cons or whatever the case may be it's all up to your profile what you enjoy what you like in order to find what's best suited for you as a bonus we're going to give you bonus number four it is pick up only delivery service and what does that mean it's contradicting itself pick up only delivery doesn't make sense but nonetheless this is a model that starbucks actually trying out they have tried this model out in new york where you just order online and you go there and pick up i don't know whether this is effective or whether this would become a model or whether this is something that would work because people that order online want the convenience they want the instant gratification they don't want to go and pick up something which is a reason why you would go through food delivery service apps so it's a little bit counterintuitive but nonetheless this is a bonus one out there for you let's see in the next few years how this model plays out so who is this for this model is specifically for the people who has a passion for delivering their grandma's recipe to the world yet they don't have that much funding they don't have the money to spend on the equipment they don't have the money to sign a five year 10 year lease and do all the renovations they don't have the expertise to run a full-scale restaurant these this model is specifically for that type of people that want to start off has a really really amazing delicious recipe that they want to bring to the world and yet they don't have the resources to do so which is the reason why this is such a great opportunity for you if you fall into this profile if you don't mind being held by the neck by these food delivery service apps if you're fall within this demographic then this is a really really promising model which i highly recommend you to do i really really hope that you've enjoyed this video because i sure did when i'm making it i've learned tons of things if you guys like this video smash the like button and if you guys have any questions if you guys want me to make more of this video or how do you negotiate a rate uh or how do you create your menu leave it in the question and comment section below otherwise i'll see you guys in the next video