Zomato to launch kitchen infrastructure service ZIS in March; to provide space, equipment to restaurant brands

With an aim to provide kitchen infrastructure at nominal rates to restaurant brands in India, online food ordering company Zomato has announced to launch Zomato Infrastructure Services (ZIS) which will began its operations in March this year. 

The company has built a pilot kitchen in Dwarka and will soon start its operations.

“The pilot kitchen is in Dwarka. Starting to cook in the first/second week of March. We won’t have another location for another two to three months,” Zomato's founder and chief executive officer Deepinder Goyal said in a blog post on February 28. 

 

“Zomato Infrastructure Services (ZIS) is a kitchen infrastructure service where we will work with current restaurant business owners to expand their business to more locations without incurring any fixed cost,” Goyal said in a blog post. 

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Zomato will expand its kitchen infrastructure services to five locations after understanding key insights of its new business model.

“Once we learn the business model’s nuances, and reasonably know how to bypass Murphy’s law, we will expand to five locations very soon. Post that, after one more big iteration of the business model, we will scale in second tier cities. We think we can really help expand the restaurant industry beyond the top seven metros with ZIS - and that’s where the real opportunity for ZIS lies,” cited Goyal. 

 

Goyal in blog post further said, “Our initial estimates tell us that with some hard work, we can have a 100 locations by the end of 2018. As of now, we are not sure when and how this model will scale to our other strongest countries of presence.”

Here are key things to know about Zomato Infrastructure Services (ZIS): 

1. Each location that Zomato create for ZIS will have four or more restaurant brands co-located with each other, leading to shared (and thus lower) costs. Besides, each restaurant brand will have its own space of roughly 300 square feet.

2. Restaurants under ZIS can choose to have owned/shared/outsourced delivery personnel - thus increasing delivery efficiency 

3. Zomato will provide the real estate, build the kitchen and supply all the equipment for these brands to just ‘walk in’ and start their business in a matter of hours 

4. Build out cost for these kitchens is low and Zomato has invested time and energy in frugal and durable engineering to make sure that it doesn’t incur large capital expenditure (Capex) while constructing these kitchens for its partners to use

5. To acquire cooking equipment, it is using Zomato data to identify restaurants which have recently shut down in the vicinity and is acquiring this (almost new) equipment at close to scrap value 

6. Zomato will only procure the best quality equipment which meets robust safety standards

7. As part of its kitchen infrastructure services, Zomato will provide the entire technology stack to restaurants at free-of-cost

8. Technology stacs like Zomato Base (POS) and Zomato Trace (Delivery Dispatching and Routing) are the two key components that will go into its kitchen infrastructure services.

9. Zomato will use its data to help its partner restaurant brands create the right menu, and also have the right pricing in locations to maximise the probability of success of its partner brands

10. Only renowned and reliable operators will be eligible to use Zomato kitchen services

11. Restaurants using Zomato Infrastructure Services (ZIS) will not have a lock in period. They are free to walk out (with one month’s notice period) of the service if it is not working for them

12. Zomato will let the restaurant brands to be listed under its kitchen services to list themselves on any other aggregator platform

13. There won’t be any fixed cost for restaurant brands to use Zomato Infrastructure Services (ZIS)

14. Zomato will charge restaurant brands only a nominal percentage of their revenue

15. Restaurants will pay on top of this nominal fee for any other services that they use-for example, Order Lead Generation, Advertising, etc., on Zomato's kitchen services platform

 16. Zomato Infrastructure Services (ZIS) will help users to select dishes from multiple brands to build a single food order. For instance, if you want to eat shawarma, and your friends want to eat pizza, that can be done in a single order

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