Today we're going to be talking about the six different business models that you can operate out of a cloud kitchen. Hello friends, welcome back to another episode of Cloud Kitchen Series. My name is Wilson. Make sure you guys subscribe along the journey as I share a lot more tips, tricks and hacks on how to build a small business and how to build a restaurant with you. So I've been getting a ton of emails about Cloud Kitchen and that's the reason why I decided to do this series specifically on Cloud Kitchen. Now for some of you that don't know what Cloud Kitchen is, I've definitely created a video like this that talks about what Cloud Kitchen is and I've also created a video about what is the pro and what is the con of operating a Cloud Kitchen. So definitely check out these two videos right here. Now without further ado, we're going to dive into the first and most popular model and that is the independent model. How does that work? Basically, you would get your orders through multiple different third party apps such Uber Eats, Postmade Scrub Hub. Once you get that order, then you can create your offering at your commissary kitchen in this Cloud Kitchen. And after you're done preparing it, you put it at the front desk and then your driver would come pick it up and brings it to your customer. And we're talking about one brand only. So for example, Wilson's waffle. You get an order through Uber Eats. After you get it, you prepare all the waffles. It's done. So the front, this guy comes and pick it up and on goes to your customer. The beauty about this model once again is the fact that it is super easy to operate. It doesn't have much upfront costs and that's the reason why this is one of the most popular items and models out there in today's age. For those of you that are a little bit more ambitious and feels like that, you know what, you have much more to give, then I would recommend the second business model, which is a multi-brand model. The same thing is the independent model. You get your orders through Uber Eats, Postmates, Swinnau, Third Party Apps. And then you start creating your offering and then it gets delivered to your customers. Now the only difference is that you're running multiple brands through the same kitchen. For example, I'll be running Wilson's waffle. I'll be running Shushi Town and I'll be running Donut Empire. So all these brands that are on these third party apps, I'm running out of this one cloud kitchen. And why is it the fact that we would want to run multiple brands? It is because you would be able to capture much more market share. For example, you might feel like waffles today and for example, Susan might feel like Shushi and whereas David might feel like donuts. And this allows you to experiment with different types of offering within your neighborhood and in turn allows you to actually test out what works, what doesn't work, what is popular, what is not popular. And that's the reason why this brand and this model is also very, very popular for those of you that are a little bit more ambitious and that wants to try out new and different things. As a bonus insight for you guys, Rebel Foods does an amazing job with this model. What they do is basically they look at their demographic, they look at their geography of surrounding neighborhoods and popular items that are selling really well, popular restaurants within the area. And from their onwards, they're able to gain insight about what they could potentially do with their own cloud kitchen and in turn capture even more popularity and enhances their chances of success. The third model is mid ground model. What does mid ground model mean? This means exactly the same thing as our independent model. Basically you order through third party apps, you get it created within your cloud kitchen. The only difference is that aside from getting it delivered to your customers, now customers can actually come into your cloud kitchen and order straight from there and pick up from there. Now not a lot of cloud kitchen goes kitchen offered this type of service. So definitely if you're signing up with your cloud kitchen within your area, you need to make sure that whether they offer mid ground level or not. A lot of times they don't because the reason why cloud kitchens are so popular is because they're located at areas that are off from the population density. So a lot less walk in traffic. Why is that the case? It is because rent is exceptionally cheaper at these industrial zones. So if you're looking for mid ground level to actually take in walk in traffic as well, that is a little bit less popular out there. If you guys find any value from this video, whatsoever, make sure you smash the like button so then that way I know to create more of these videos for you. Now let's get back to regular programming. The fourth cloud kitchen business model is the brand owned model. What does that mean? That you can only receive orders and sign up with one third party delivery app such as Uber 8s. They force you to sign an exclusive deal with them and in turn you create the item and then you get it delivered. So this is the brand owned model. Why is that the case? It is because these third party apps like Uber 8s, Door Dash, GrabHop, they understand that as cloud kitchens, we always sign up with multiple different third party apps, which in turn doesn't give them that exclusivity and also monopoly that they're looking for. So they force you that if you want to sign up with them, you must only use one third party app. And that is a common thing that we're seeing more and more that is happening. So for example, with Wilson's waffle, our brand will only show up on Uber 8s if we do decide to go with this model. Now some of the advantage of going with a brand owned model is the fact that a lot of times they would actually push a lot more business to you and advertise you a little bit more because they want you to be successful. They want you to only rely on their brand in order for them to be in business, in order for you to be in business. Now this advantage of that is because of the fact that you're only banking on one platform, you basically put all your eggs in one basket. Let's say all of a sudden Uber Eats charges you $500 in advertisement fees. You have no choice but to pay that. And that's the disadvantage of going with only brand owned models. If you guys want to learn more about the pros and cons of running cloud-based kitchen in general, definitely check out this video. I go over in detail about the pros and cons. The fifth type of cloud-based kitchen models would be the hub and spoke part model. And this is usually for people and companies that are a little bit more established that wants to have a bigger reach. And the only difference between this and the independent model is that they actually have something or a kitchen that is centralized. They create everything from this kitchen that is half made. For example, Wilson's waffle. Wilson's waffle, I would create basically all my dough from this kitchen that is a centralized kitchen. Then I would ship these to individual cloud kitchens around the city. And in turn, I can service the people that are around my area. Now once again, this is not that popular of a model for the general public because you're investing much more into this. This is much more for advanced operators who want to have more market share within individual pots of the city. The sixth and final cloud kitchen concepts out there is the outsourcing model. Basically the only difference between an outsourcing model and an independent model is the fact that whenever I get my items, they're basically prepackaged. They're pretty much done. And all I'm doing is take it out of the package and I put the finishing touch. And then I serve the item, get the delivery drivers to come pick it up and send it off to my customers. For example, with Wilson's waffle, basically I'm buying it from Costco. I take off the wrapper, I heat it up, I add some sprinkles on there. Now it's completed. That's what outsourcing model means. Means everything is outsourced already. Now this is also a quite a popular item out there. But nonetheless, do know for one thing that our customers know exactly what it tastes like. If it tastes like egos, why would they purchase from you? Which is the reason why I would not recommend doing an outsourcing model altogether. I would actually recommend doing independent model or the multi brand model. So there you are. The six different types of cloud kitchen business models. I know this is a super popular idea. It is very novel. So not a lot of information are out there for you to decide what types of models you should choose. And that's the reason why we created this video just for you. So then that way you can make better judgment in making sure that you sign up for the right model. A lot of reasons why you would want to consider the different models is it comes back down to your budget. It comes back down to your stress level that you want to have, whether you have multiple partners, the location and how ambitious you are. At the end of the day, I would highly recommend you see cloud kitchen as only a stepping stone for you to test out your concept. Because at the end of the day, cloud kitchen is really relying on many different parties. And you don't want to rely on other parties. You want to make sure you take control of your destiny, which is the reason why if and when your brand does well, what are you going to do? Once you have proven out the concept, it's time to jump into a brick and mortar. And that way you can have a much more stable stream of revenue. And you're not going to be held by the next from these third party apps because we all know they take a ton of margins off your revenue. I really hope you enjoyed this video. If you did, make sure you smash the like or check out my other videos on cloud kitchen. Otherwise, I'll see you guys in the next video.