The food and beverage industry in the United Arab Emirates is massive, and it is only projected to expand. According to recent estimates, the industry is worth about AED 142 billion, with development expected to reach AED 145 billion by the end of 2021. Year after year, an increasing number of restaurants and fast-food franchises benefit from serving food in-house. That is, they open fast-food restaurants, restaurants, and convenience stores, and expend a lot of money in promotions and advertisements to draw buyers and have their name “known” in the tummies and minds of consumers. But what if there’s a hidden gem in this multibillion-dollar industry where you can start small and make a fortune without spending a fortune on marketing or advertising? Food delivery is still a largely untapped resource for the food industry.
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Why Start a Food Delivery Business?
The concept of restaurant meal delivery is still in its development, and it has yet to be completely implemented by major consumers, firms, or well-established food businesses. For those of the food business, delivering food from many restaurants is also a novel concept.
And, since this is a novel concept, more customers will be eager to try it if one was available in their region. Particularly if they could order their favourite restaurant meals or dishes from the comfort of their own home or workplace. This delivery service may be handled part-time or full-time. You would invest the majority of your time overseeing all facets of your restaurant, food chain, or simple food stall if you want to succeed. Your attention will be focused mostly on your business location after you have launched your grocery store or restaurant.
The online food delivery service in Dubai, on the other side, is versatile in terms of the hours you spend handling it. You can do it full-time, but you can also make it work for you if you have another company, a day job, or just want to minimize the amount of time you spend on it.
Setting Up Your Food Delivery Service Business in Dubai
Setting up a food delivery service in Dubai doesn’t have to be difficult if you have the right expertise and experience. However, opposed to merely applying for a trade license, there are a couple more steps to go through, and it does necessitate any prior knowledge of the procedure. Furthermore, it’s important to keep in mind that the application procedure is only simple if the trade license application is complete and error-free at the time of submission.
Steps to Start Your Food Delivery Business
If you want to start a food delivery service in Dubai, UAE, there are a few things you should know. The good news is that working with a reputable business formation consultant makes it simple. You can begin by determining what kind of company you want to run. The most critical point is that the activities you choose are on the official Department of Economic Development (DED) list. Now, it is time to choose a business name. Be mindful that in the UAE, you must follow a specific collection of naming conventions. In brief, any disrespectful or blasphemous words should be avoided. If you’re naming your business after yourself, stay away from well-known company names and abbreviations. You can also double-check that the name you want to use is available for registration.
The most cost-effective and beneficial solution is to form an organization in a free zone. Many free zones in the United Arab Emirates offer low-cost license packages and fast business formation. Free zones have advantages such as a simple and convenient incorporation procedure, continuing market assistance, and financial rewards including tax exemptions and no currency restrictions. You should apply for your trade license after you’ve made these important decisions. You’ll need to include a few specifics as well as some basic documents, such as:
- Completely filled application form
- Passport copy of the proposed owner or owners
- Two coloured passport size photos
Finally, you’ll need to register for a UAE citizenship visa unless you already have one. The visa application procedure, like applying for a business license, can be relatively straightforward with the right guidance. You will sponsor others for their visas if you have a UAE business license. A partner, parent, or child, as well as a domestic worker such as a housekeeper, could fall into this category.
Guidelines of Delivery Services License in Dubai
Following are some guidelines that need to be kept in mind when setting up a food delivery service business in Dubai:
- If a restaurant can generate business 100 to 350 orders a day through the online platforms, then the following is likely to happen,
- It can negotiate a commission rate of 15-18 percent of the transaction value;
- The online platform also has an incentive to promote the outlet actively on its site;
- It may also run above-the-line campaigns featuring the Food and Beverage brand;
- The platform monitors the restaurant’s performance with weekly MIS (management information system) reports and performance metrics to enhance the customer experience;
- It could offer free delivery business and free commission weeks to further promote the restaurant.
- But if the restaurant’s order volumes are low, then the operator will need to pay 25-30 percent as commission to the online service provider.
Benefits of Starting A Food Delivery Service Business
Food delivery services can make money in various ways, including:
Commissions: This would be decided upon between the restaurant and the business as the food delivery app that takes the order, with adjustments made based on the volume of the order and other factors.
Delivery: If the restaurant does not have its own delivery staff, the business as a food delivery provider will settle to a price for the delivery itself, whether that be dependent on a percentage of the distance travelled.
Advertising: Restaurants pay a fee to be featured at the top of the app, which you can monetize by selling ads on it.
Time of the day: You may charge a delivery surcharge at peak hours or for deliveries that are very late or early.
Working with a Business Set-Up Specialist
When forming a new business in the UAE, it’s a smart idea to partner with a Dubai company formation professional like Riz and Mona Consultancy to ensure that all of these steps go seamlessly. We are a group of business registration experts who are dedicated to achieving the aspirations of young entrepreneurs and small businesses. Our team can help you open corporate bank accounts and guide you about the best financial institution for your specific requirements in addition to managing your license application. In brief, our professionals will develop your organization on your behalf, file your license and visa applications, and handle all of the required paperwork, leaving you free to focus on managing your firm.
Contact us today to book your appointment!