Taiwan Franchising Cloud Kitchens

The cloud kitchen market in Taiwan was experiencing significant growth and transformation. The COVID-19 pandemic played a crucial role in driving the adoption of online food delivery and consequently, the demand for cloud kitchens. The pandemic accelerated the shift in consumer behavior towards online food ordering and contactless delivery. This change in behavior resulted in a sustained increase in demand for cloud kitchen services. According to Taiwan Ministry of Economic Affairs (MOEA), in 2021 the food and beverage industry volume dropped 6.4% to US$24.3 billion due to the COVID-19 outbreak, the food delivery service industry volume had a 293.78% annual growth instead. The rise of food delivery platforms like Foodpanda, Uber Eats, foodomo, and others contributed to the increased demand for cloud kitchens. Consumers were increasingly relying on these services for the convenience of ordering meals from a wide range of restaurants and cuisines. 

In response to intensive competition, food delivery service platforms sought differentiation of their services to retain the subscription rate. The platforms collaborate with cloud kitchen operators to increase the variety of food options and the cloud kitchen operators also focus on niche offerings to stand out. Restaurants work with cloud kitchen operators to expand their presence in the delivery market. This restaurant-cloud kitchen-delivery service model is well established and proofed during the COVID-19 pandemic. This model not only benefits the local restaurants, but also the foreign restaurants to consider as a market entry strategy especially in a market like Taiwan with matured and wide food delivery service coverage. * 

As the traditional franchise model requires high initial investment, cloud kitchens offer a cost-effective and flexible way to test the market without high overhead costs of running a traditional brick-and-mortar establishment. For example, Just Kitchen, one of the largest cloud kitchen operators in Taiwan, has partnered with well-known U.S. brands like MrBeast Burger and IHOP to serve consumers in Taiwan through delivery service. For U.S. franchisors, entering the Taiwan market presents challenges in terms of adapting to local tastes, navigating regulations, and establishing strategic partnerships. Partnering with local cloud kitchen operators who have a deep understanding of Taiwanese culinary preferences, provide compelling value propositions, ensure operational efficiency in logistics and order fulfillment, and raise the brand visibility and accessibility to customers in a very short period of time. 

*There are 22 counties and cities in Taiwan. The top 2 food delivery service providers, Foodpanda covers 16 counties and cities and Uber Eats covers 18 out of 22. The food delivery service coverage rate is over 82%.  

For more information, please contact Commercial Specialist Kelly Lee at  Kelly.Lee@trade.gov.