 Hey guys today, I'm gonna be talking about the future of restaurants cloud kitchen. Hey guys My name is Wilson today We're shooting a video on cloud kitchen versus dining restaurants and what's the pros what's the cons and how fitting it is for you Why is it that we're shooting this video? It is because I'm getting a lot of emails about the cloud kitchen concept whether it is Actually as good as it sounds what are the pitfalls and how come I can own start a cloud kitchen as little as $10,000 Versus why would I be spending hundreds of thousands of dollars just to sign a lease for a dining restaurant? What's the pros what's the cons what's meeting more fitting for me and I'm gonna be dissecting this whole thing all in this video So make sure you guys keep watching without further ado What is cloud kitchen cloud kitchen also known as ghost kitchen virtual kitchen is a delivery only restaurant business? Restaurant tiers and chefs can actually rent out these spaces in order for them to prepare the food To deliver through third-party apps such as uber eats Grubhub postmates all these different delivery services And the whole focus for cloud kitchen is for you to be able to maximize your orders anywhere from a thousand to more than 2000 servings per day if you guys want to know more about what cloud kitchen really is We make sure you guys check out this video because I dive deep into what they are the nuances of it Now that we understand what cloud kitchen is we're gonna be talking about the pros of the cloud kitchen first of all They have super low startup costs as low as $1,800 you already have a kitchen which has all the equipment necessary You guys can check out coho. It is an amazing cloud kitchen out there as an example And on top of that a lot of these businesses does offer mentorship that helps you along the way that guides you along The way and that's added bonus which you would not get in a conventional way of building your own restaurant Another reason why they have super low startup costs is the fact that you don't need to pay Labor in order for you to build out and renovate your whole shop and on top of that You don't need to pay that extra months of rent just for the renovations and just to deal with city permits And so on so forth a super pro that I really like about cloud kitchen is the fact that they have super fast setup And why is that the case it is because their infrastructure is already all built out the equipment is built out the health and safety is all Pass already so what that means is that you can actually go into your ghost kitchen your virtual kitchen And you can be in operation within days Versus if you were to build your own restaurant that would take you months if not years Another pro about having your own cloud kitchen is that you have way less headaches to deal with them What I mean by that is you don't need to worry about things breaking down You don't need to worry about that light bulb that's broken or the toilet seats that broken or the exterior or the interior of your restaurant Because your cloud kitchen take cares of everything for you You don't need to worry about all these crazy stuff And all you have to do is to focus on your craft focus on creating the best quality food that you can to serve your customers Another pro is that you can actually Experiment and what I mean by that is because your brand is not tied to a specific location You can spawn multiple different ideas multiple different brands in order for you to see what is a product market fit And once you hit that product market fit, then you can grow from there onwards and perhaps one day have your own restaurants If there is a product market fit and last but not least it's all about the profits with cloud kitchen We're looking at way higher profits because we can save on the rental costs We can save on the additional labors that we have to pay our labors in order for us to maintain a restaurant In order for us to maintain the slow times and that's the reason why that profits can go up as high as more than 15% and that is a really really big reason why cloud kitchens are getting all the hype in these last few years Now with all the good stuff about cloud kitchen We're gonna be talking about the cons of operating a cloud kitchen First of all the lack of visibility is a huge huge Negative for running cloud kitchen. There's no way that a car can drive by and see your restaurant There's no way that you can put a sandwich board out there and capture walk-in traffic And you miss all those different types of traffic because all you're relying on is These third-party apps that's gonna do the marketing for you There's zero visibility and the creativity for your marketing is quite limited by you operating in a cloud kitchen Another con about the cloud kitchens is the fact that you're relying on third-party apps So that means you lose all the controls that you can have when dealing with your own restaurant You lose that capability to create that ambience that experience that you want to deliver to your customers Because all your sales are coming through third-party apps and one day they can cut your and they're basically your bottleneck They can cut your services. They can cut your restaurants If they don't like you they can increase the rent if they don't like you So what that means is that all your business is being held by these third-party third-party apps out there And we already see that these third-party apps are already Buckling down and making it much more harder for businesses because what they're doing is they're having exclusive partnerships with Companies and brands that are only able to host on their specific platforms And they cannot be signing up on multiple different platforms and in the future Perhaps when they're when this becomes the norm when this becomes more mature You're gonna end up having to pay much more for being on the first page You're gonna be paying much more because your whole lifeline is being held by these third-party apps out there and in Turn basically your own business is in the hands of someone else you lose a lot of control Another con that I really really don't like is the fact that we don't own any of our data We don't own our customers because all the customers know about your restaurant is through the apps It's through Uber Eats is through postmates and in turn if Uber Eats decides to cut you they can cut you And there's no way for you to reach your customers Same thing with owning your data. There's no way for you to email your customers There's no way for you to contact them because all this information is through these the third-party apps Which in turns loses a lot of controls for you now What are dine-in restaurant dine-in restaurants are the conventional restaurants that you sign a five-year lease ten-year lease and Basically that location is yours to operate you deal with all your equipment you deal with all the leases And that's what dine-in restaurant is the pros of running your own dine-in restaurant is visibility Visibility is a huge huge thing if you're in a very densely populated Area in a city like New York This is huge because you can convert all those walk-in Traffics into your customers and that's something that cloud kitchen you don't have that you don't have the opportunity To have your own lightboards your signages in order for you to attract the walk-in traffic Another pro of having your own dine-in restaurant is that you can build a better Connection with your customers and what I mean by that is you can actually see your customers Whether they're enjoying the food or they're not enjoying the food you can actually bond with them You can actually chat with them You actually know them by their first name and that itself allows you to build a very loyal community around you which in Turns allow you to outbeat all the competitors out there because your loyal customers know you by the first name They know your story. They know you because you're able to build a connection Another pro of having your own dining restaurant is that you own all your data You are able to actually email your customers at your wish you can actually contact them You can actually communicate with them You can build a rapport with them which in turns allow you to charge a premium allows you to actually develop that trust and Allows you to build that customer loyalty and that's something that you can never have When you're working in a cloud kitchen Now time for cons of a dining restaurant is the huge upfront cost huge upfront cost for you to be able to have that Least with your landlord for them to actually spend months for renovations months for city permits and Regulations and you're spending hundreds and thousands of dollars on equipments and your labor design all The whole nine yard that you're spending months on dealing with just opening up a restaurant yet You don't know whether this product is working whether this concept is receptive for your customers or not And this acts as a huge barrier that prevents a lot of really talented chefs out there to create their own restaurants Because they just don't have that upfront capital if you find any value in this video Whatsoever make sure you smash like button because that's just gonna show me that This video is the type of content that you like. 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Let's carry on Another con is the headaches that's involved with running your own restaurant You're talking about having your own training for your whole team You're talking about hiring and Centipizing your whole team because that's one of the biggest problems out there for restaurantiers is managing their own team And on top of that you need to drive your own sales You need to drive people through the doors sales are not guaranteed That means you need to work on your marketing ten times over and that takes you away from doing something that you enjoy Which is to create an amazing experience an amazing dish for your customers Another con of having your own dining restaurant is that it is very immensely difficult to Experiment if you're running an Italian restaurant You can't just pivot and say that you want to serve Chinese food the next day It becomes very very difficult for you to try out different types of Cuisine because of the fact that you you're brand and your your business is known for that specific cuisine So it's very very difficult to experiment and on top of that you are location dependent And what that means is that your location is already there. There's no way that you can pivot There's no way that you can actually change location and people know you as the Italian shop And that's why it is so difficult to experiment different offerings and different servings out there once again with Dine-in restaurant the profits are so much lower than the cloud kitchen because you need to pay for the upfront costs of Your labor maintaining the restaurant maintaining the whole shop and the overhead of driving traffic through your doors And that itself adds up to tens of thousands of dollars which cuts into your profit margins We're talking about typical dining restaurant five to ten percent margins And that is a very slim margins to play around with So there you go cloud kitchen and dining restaurants the pros the cons the pros and cons now We're gonna figure out which one is more suitable for you whether it's cloud kitchen or dining restaurant If you are a newbie if you just started out wanting to create this recipe to the world And you only have ten ten thousand twenty thousand thirty thousand dollars Then I would highly recommend you to check out cloud kitchens because the investment that you're putting in its minimal in Comparison to a dining restaurant you can actually go out there prove your concept prove the fact that you have a product market fit Which is essential to any business out there having a product market fit is not a fact It is something that people love and enjoy and when your business grows and when you have a lot of sales Then you can consider having your own dining restaurant because when you have your own dining restaurant You are able to actually control your experience control what you have to offer to your customer and in turn Allows you to be much more profitable because of the fact that you have much more revenue coming in your rental costs in Proportionally is much lower than your cloud-based kitchen because you're able to fulfill much more people through a dining restaurant experience once again if you are newbie check out cloud kitchen concept and if you know what you're doing if you have deep pockets if you Can afford the investment and the months of building up your restaurant then having a dining restaurant is a very good choice for you So there you go cloud kitchen versus a dining restaurant experience It is both are a really great concept both allows you to have their pros and the cons Make sure you guys understand this and understand What is it that you're trying to get out of this in order for you to build that restaurant of your dreams? Nonetheless, it is still an amazing opportunity out there check out the cloud kitchen check out having a dining restaurant and Make sure you check out the resources below so then that way you can build something of your dreams I really hope you enjoyed this video. Make sure you subscribe along the journey I'm going to be showing a lot more of these info with you a lot more strategies tips tricks and experiences with you Otherwise, I'll see you guys in the next video