F&BosA cloud kitchen is a delivery-only commercial kitchen: it cooks for orders placed on Zomato, Swiggy, ONDC apps or its own ordering channels, and has no dining area or walk-in customers. It is also called a ghost kitchen, dark kitchen or virtual kitchen. In India a small cloud kitchen typically needs ₹4–10 lakh in a Tier-2 city or ₹11–33 lakh in a metro, including six months of running costs, plus FSSAI registration, GST, a trade licence and Shops & Establishment registration. Well-run kitchens make about 15–25% net margin, but platform commission of 18–28% per order is the cost that decides most of them.
A cloud kitchen is a restaurant without the restaurant: a commercial kitchen that prepares food only for delivery. Customers never visit it. They find the brand on a delivery app or its own website, order on their phone, and a rider collects the food from the kitchen's back door. Everything a dine-in restaurant spends on a good location, interiors and service staff, a cloud kitchen spends on food, packaging and getting found online.
This guide explains what a cloud kitchen is, how one works day to day, the main types in India, what it costs, which licences it needs, how the margins work and when it is the right format. If you have already decided to open one, our step-by-step guide to starting a cloud kitchen in India goes deeper on setup, onboarding and launch.
What is a cloud kitchen?
A cloud kitchen is a licensed food business that cooks and packs meals for delivery and takeaway pickup only. The word "cloud" refers to where the orders come from: the internet, not the street. India's best-known example is Rebel Foods, which runs brands such as Faasos, Behrouz Biryani and The Good Bowl from shared kitchens, but most cloud kitchens are single owners running one or two brands from a 200–500 sq ft space.
Three things set a cloud kitchen apart from other food businesses:
- No dine-in. There are no tables, waiters or front-of-house costs, so the kitchen can sit in a back lane, a basement or an industrial unit where rent is low.
- Orders arrive digitally. Most orders come through Zomato and Swiggy at first, with ONDC apps, WhatsApp and the brand's own ordering page added over time.
- One kitchen can run several brands. Because customers never see the kitchen, the same staff and equipment can sell a biryani brand and a rolls brand under different names, each with its own menu listing.
Other names you will see are ghost kitchen and dark kitchen, which mean the same thing, and virtual brand, which is a delivery-only brand that may be cooked inside an existing restaurant's kitchen.
How a cloud kitchen works
A typical order in an Indian cloud kitchen takes 25–40 minutes from tap to doorstep. Here is what happens in between:
- The order arrives. A customer orders on Zomato, Swiggy or the brand's own page. The order appears on the platform's partner app or tablet, and the kitchen accepts it.
- The kitchen gets a ticket. The order is entered into, or reaches, the kitchen's POS, which prints a KOT or shows it on a kitchen display at the right station.
- Cooking and packing. The dish is cooked to a standard recipe, packed in sealed, tamper-evident packaging and labelled with the order number.
- Handover. The platform's rider, or the kitchen's own rider for direct orders, collects it from a dispatch counter.
- Settlement. The platform pays the kitchen weekly, after deducting commission, GST on fees, discounts the kitchen funded and any ads. Direct orders are paid straight to the kitchen.
Because the customer judges the kitchen only by the food, the packaging and the delivery time, a cloud kitchen lives on its platform rating. A kitchen 2–3 km from a dense residential area usually beats a cheaper kitchen 6 km away, because shorter trips mean hotter food, faster delivery and better ranking on the apps.
Types of cloud kitchen in India
"Cloud kitchen" covers several business models with very different costs and risks.
| Type | How it works | Typical setup cost | Best for |
|---|---|---|---|
| Independent, single brand | One owner, one leased kitchen, one brand | ₹5–15 lakh | First-time operators with food experience |
| Multi-brand | One kitchen runs 2–3 brands that share ingredients and staff | ₹8–20 lakh | Operators who already have one brand selling well |
| Shared or commissary kitchen | You rent a slot or station in a fitted kitchen run by someone else | ₹1–3 lakh | Testing a menu before signing a lease |
| Restaurant-attached virtual brand | An existing restaurant adds delivery-only brands from its own kitchen | ₹2–8 lakh extra | Restaurants with spare kitchen capacity |
| Home-based kitchen | A small menu cooked from a home kitchen, often as a tiffin service | Lowest, but licences and local rules still apply | Validating a menu at very small volume |
Setup costs are indicative ranges from Indian operator and consultant guides, collected in our cloud kitchen startup guide; your city and menu will move them.
Most owners should start with an independent single-brand kitchen, or test in a shared kitchen first. Adding a second brand makes sense only when the first one is selling consistently, and the best second brands reuse at least half of the first brand's ingredients.
Cloud kitchen vs restaurant vs takeaway
| Cloud kitchen | Dine-in restaurant | Takeaway counter | |
|---|---|---|---|
| Customers visit? | No | Yes, to sit and eat | Yes, to collect |
| Location priority | Close to delivery customers | Footfall and visibility | Footfall |
| Rent as % of revenue | About 5–8% | About 12–25% | Varies with frontage |
| Typical setup | ₹4–33 lakh incl. 6 months' costs | ₹25–60 lakh or more | Between the two |
| Biggest variable cost after food | Platform commission | Staff and rent | Rent |
| Customer data | Mostly held by the platforms | Yours | Yours |
| Can run several brands? | Yes | Rarely | Rarely |
The trade-off is simple: a cloud kitchen saves on rent and staff but pays much of that saving to the delivery platforms. Our cloud kitchen vs restaurant comparison works through the full P&L for both.
How much does a cloud kitchen cost in India?
Total launch investment, including six months of rent, staff and other running costs, falls in three broad bands:
| Setup | One-time costs | Six months' working capital | Total |
|---|---|---|---|
| Budget / Tier-2 city | ₹2.4–5 lakh | ₹1.8–5.2 lakh | ₹4–10 lakh |
| Standard / metro | ₹5.6–14.9 lakh | ₹5.5–17.9 lakh | ₹11–33 lakh |
| Professional / multi-brand | ₹11–25 lakh | ₹12–29.6 lakh | ₹23–55 lakh |
Ranges from the full cost breakdown in our cloud kitchen setup cost table. One-time costs cover the deposit, fit-out, equipment, technology, photography and opening packaging stock.
The most common planning mistake is spending everything on equipment and fit-out. New kitchens usually take months to build ratings and repeat orders, so keep at least six months of fixed costs in reserve, separate from the setup budget.
Licences a cloud kitchen needs
A cloud kitchen needs the same core registrations as any food business, and Zomato and Swiggy check them before listing you.
| Licence | Who issues it | When you need it |
|---|---|---|
| FSSAI registration or licence | FSSAI, via the FoSCoS portal | Before the first order. Basic registration covers turnover up to ₹1.5 crore a year and a State licence up to ₹50 crore. Both now have perpetual validity. |
| GST registration | GST portal | Zomato and Swiggy ask for a GSTIN at onboarding, and registration is required above ₹20 lakh turnover (₹10 lakh in special-category states). |
| Shops & Establishment registration | State labour department | For commercial premises, within the period your state sets. |
| Trade or health licence | Municipal corporation | For cooking food on commercial premises; names and fees vary by city. |
| Fire NOC | State fire department | Depends on size, floor and local rules; ask before you sign a lease. |
Apply for FSSAI first, because nothing else moves without it. Our FSSAI licence fee calculator shows which category and fee apply to your expected turnover.
On GST, Zomato and Swiggy themselves pay the 5% GST on food ordered through them under Section 9(5) of the CGST Act, which has applied since January 2022. You still report those sales in your returns, and you charge GST yourself on direct orders. Whether a very small kitchen selling only through the apps must register is disputed, so confirm your position with a CA. Our GST guide for restaurants covers the rates.
Cloud kitchen margins: where the money goes
A well-run independent cloud kitchen typically makes 15–25% net margin once it has steady volume, but the first months are usually loss-making. This is roughly where a ₹350 order through Zomato or Swiggy goes in our model:
| Line | ₹ per order | Share of order value |
|---|---|---|
| Order value | ₹350 | 100% |
| Platform commission (22% assumed) | −₹77 | 22% |
| Food cost | −₹105 | 30% |
| Packaging | −₹15 | 4% |
| Staff, rent, tech and utilities (allocated) | −₹70 | 20% |
| Net profit | ₹83 | 24% |
Model assumptions from the unit economics in our cloud kitchen startup guide, at 60 orders a day. Commission, discounts and ads vary by contract, so your own figures will differ.
Two numbers decide whether that ₹83 survives. The first is commission: base rates are commonly quoted at 18–28% of order value, and GST on fees, discounts you fund, ads and refunds can take total deductions higher. Work out your own rate with the Zomato and Swiggy commission calculator. The second is food cost: a dish that costs more than about 32% of its price leaves little after commission. Check each dish with the food cost calculator before it goes on the menu, and see our cloud kitchen profit margin guide for a full monthly P&L.
At ₹1.2 lakh of fixed costs a month and variable costs of 55% of revenue, a kitchen breaks even at about ₹2.67 lakh of monthly sales, or roughly 25 orders a day at ₹350.
The software a cloud kitchen runs on
A cloud kitchen has no dining room to manage, so its software is about orders, the kitchen and food cost:
- Delivery partner apps. Zomato's and Swiggy's partner apps receive orders, show ratings and handle payouts.
- A POS with KOT or a kitchen display. This records every order with the right brand and tax, and sends tickets to each kitchen station.
- Recipe-linked inventory. Each order deducts its ingredients, so you can see food cost and wastage by brand and dish.
- A direct ordering channel. A WhatsApp catalogue or your own ordering page brings repeat customers back without commission.
- Accounting. Sales should reach your books without re-typing, so GST returns and platform reconciliation are routine.
F&Bos cloud kitchen POS software covers the POS, kitchen display, recipe-linked inventory, margin per brand and dish, your own ordering page and Tally export in one system. Direct Zomato and Swiggy integration is on the F&Bos roadmap, so today aggregator orders are recorded in the POS as delivery orders. For a vendor-neutral checklist, read our cloud kitchen POS software.
Pros and cons of a cloud kitchen
| Advantages | Disadvantages |
|---|---|
| Much lower setup cost than a dine-in restaurant | Commission of 18–28% or more on platform orders |
| Cheaper, smaller premises | Platforms hold most customer data |
| Several brands from one kitchen | Ranking depends on ratings and the platform's algorithm |
| Menu and prices easy to test and change | No walk-in trade to fall back on |
| Fast to open, often within weeks of FSSAI approval | Many close in their first year; estimates put it at 25–30% |
The failure rate is the honest part of the picture. Our guide to why cloud kitchens fail covers the eight mistakes behind most closures, from too many dishes at launch to running out of cash before ratings build.
Is a cloud kitchen right for you?
A cloud kitchen suits you if you have a menu that travels well, such as biryani, rolls, North Indian gravies or Indo-Chinese, a kitchen site close to dense housing, and enough money to run for six months before profit. It suits you less if your food depends on being eaten fresh at the table, or if you want to own your customer relationships from day one.
A sensible path is to test your menu at small scale first, through a shared kitchen or a tiffin service, for 60–90 days. If orders, ratings and food cost hold up, move to your own kitchen with real numbers instead of projections. When you're ready, the step-by-step startup guide and our cloud kitchen business plan template take you from there.
See margin per brand from your first order
F&Bos runs billing, the kitchen display and recipe-linked inventory for every brand in your cloud kitchen, and shows food cost and margin by dish.
See F&Bos for cloud kitchens →Frequently asked questions
What is a cloud kitchen in simple words?
A cloud kitchen is a restaurant kitchen that only cooks for delivery. Customers order online through apps like Zomato and Swiggy or the brand's own page, and riders collect the food from the kitchen. There is no seating and no walk-in service.
What is the difference between a cloud kitchen and a restaurant?
A restaurant serves customers at tables and needs a visible location, interiors and service staff. A cloud kitchen has none of these, so rent is roughly 5–8% of revenue instead of 12–25%, but it pays commission of 18–28% or more on platform orders and depends on its app ratings.
How much does it cost to start a cloud kitchen in India?
Roughly ₹4–10 lakh in a Tier-2 city and ₹11–33 lakh in a metro, including six months of rent, staff and other running costs. A multi-brand kitchen can need ₹23–55 lakh. Equipment and fit-out alone are about ₹2.4–5 lakh in a Tier-2 city.
Which licences does a cloud kitchen need?
FSSAI registration or licence, GST registration, Shops & Establishment registration and a municipal trade or health licence, plus a Fire NOC where local rules require one. FSSAI basic registration covers turnover up to ₹1.5 crore a year and no longer needs renewal.
Is a cloud kitchen profitable in India?
It can be. Well-run independent kitchens make about 15–25% net margin once volume is steady, but estimates suggest 25–30% close in their first year. At ₹1.2 lakh of fixed costs a month and a ₹350 average order, break-even is about 25 orders a day.
Can I start a cloud kitchen from home?
Yes, many start as home-based or tiffin kitchens to test a menu. You still need FSSAI registration, and the platforms and your local municipal body may have their own rules for home kitchens, so check them before you list.
Can one cloud kitchen run more than one brand?
Yes. One kitchen can sell two or three brands under different names on the delivery apps, sharing staff, equipment and many ingredients. It works best when the brands share at least half of their core ingredients.
What software does a cloud kitchen need?
A POS that records every order with the right brand and tax, KOT printing or a kitchen display, recipe-linked inventory for food cost, a direct ordering channel and an accounting link. The Zomato and Swiggy partner apps handle the platform side.