How to Start An Online Food Delivery Business in 2025?

Last Updated on 20th May, 2025

What’s better than a delicious dish that you don’t have to cook yourself and comes at a reasonable price? Online food delivery platforms deliver delicacies prepared by local restaurants to customers at their doorsteps in major cities.

The market is mainly driven by the rising number of smartphone users, internet users, and people who are busy with their schedules and are not able to cook actively at home. The growing trend towards online food delivery apps and technical advancements in the food industry is also contributing to the growth of the market.

Considering the fact that this industry is growing tremendously and can provide immense lucrative opportunities to those who are inclined to step into it, we decided to unearth what it takes to start a food delivery business. 

Statistical Overview of The Food Delivery Industry

According to reports, the global online food delivery market was projected to reach $54.87 billion in 2025 and is expected to expand at a compound annual growth rate (CAGR) of 13.75% from 2025 to 2029. Below are statistics that will assist entrepreneurs in making data-driven decisions and identifying market trends that increase their chances of success in the industry. 

• Around 77% of Americans ordered food for delivery online (DoorDash, 2023)
• Research indicates that 40% of consumers prefer ordering online through apps and websites. 
• In the UK, there are two platform preferences- the groups differ based on delivery fee and delivery time. Delivery fee makes 46% of the population, and the rest 38% finds time a driving factor. 
• The American online food delivery industry is projected to make an estimated revenue of USD 492.04 billion in 2025.
• In Africa, the online food delivery market is projected to reach USD 14.50 billion by 2025.

Four Key Stakeholders Driving the Food Delivery Business

The entire model of food ordering and delivery businesses usually revolves around 4 main groups of stakeholders.

Marketplace Owners

1. Marketplace owners list restaurants on the platform.
2. Manage profiles of restaurants and customers registering on the platform.
3. Implement various coupons, discounts/rewards, and loyalty programs.
4. Get reports and analytics.

Users

1. Users can choose a meal from the menu and order it.
2. Users pay online for the order.
3. Users have the provision to rate and review the ordered food items.
4. The ability to schedule orders in advance is also available.

Restaurants

1. Restaurants create their menus.
2. They maintain food quality and get recognition.

Delivery Partners

1.  Delivery persons deliver meals to their clients.

Revenue Models in the Food Delivery Business

Profit generation is one of the primary goals for investing in a business opportunity and entering a growing industry. By incorporating the necessary revenue streams, a business generates the potential to grow manifolds, enhance customer experience, and offer a competitive advantage by providing the best services to its user types. The revenue model supported by the food delivery marketplace depends upon the platform owner or the admin, and some of the prevalent streams are given below. 

• Commission Charges: The commission charges make a sustained revenue model for the platform owner. This fee is charged by the platform owner by the restaurants merchants as commission.
• Subscription Charges: These are monthly recurring fees for added perks on the platform. It is collected from restaurants, hotels, and other registered users under the online food ordering app.
• Advertisements: Third-party ads and ads displayed by restaurants on the platform via sponsored listings are also chargeable. 
• Delivery fee: The delivery fee is collected by the platform owner at every successful delivery. 

Step-By-Step Guide to Start A Food Delivery Business

Now that you are aware of the business model and the various revenue streams that a food delivery business can offer. Furthermore, let’s see the step-by-step guide on how to start a food delivery business.

Step 1: Research About Your Niche And Target Audience

Starting a new business requires a detailed analysis of the industry. The food delivery industry has transformed with the advancing times, inviting upcoming trends and niches and evolving with the changing demands of the target audience, producing luring results for a new entrepreneur. 

Niche-based Requirements: Niche-based requirements have penetrated the online food delivery industry. Targeting popular niches has the potential to lure more customers to the platform as it offers a more centered experience. Given is a researched country-based popular niche division along with categories popular among the target audience. 

United States	United Kingdom	South Africa	Canada
Healthy Meal KitE.g. HelloFresh	Local and Specialised Food E.g. Fresh Eats	Special Dietary RequirementsE.g. UCook	Alcohol and Food Delivery E.g. PostMates
Takeout FoodE.g. DoorDash	Healthy Meal optionsE.g. Frive	Traditional and Local Cuisines E.g. KasiD	Meal Kits and Grocery E.g. FreshDirect

Various surveys, reports, statistics, and government research documents should be referred to gain more knowledge about the industry and trends. Conducting a SWOT analysis can help you compare your business plan with that of your competitors. 

Take lessons from the mistakes of your competitors and learn from their successes. Try figuring out the gaps in the market and make business strategies to overcome those challenges through your business. 

Also, a thorough analysis of your target audience like their age, gender, background, preference, etc. can help you understand your target audience better and help you develop a platform aligned with their needs. 

Step 2 : Cover Your Legal And Financial Requirements

Once you have done an in-depth analysis and research of your niche and target audience, the next step is to check the legalities and formalities that should be done for your business. It is very crucial to handle all the administrative work and documentation beforehand so that you can focus on other important aspects of your online business later on. 

It is very important to know about the legal rules and regulations of your region so that you abide by the law and keep up with all the documentation from the beginning. Also, check with your local laws to make sure that you get all the permits and licenses required to start a food delivery business in your country. 

Next important thing is to decide the structure of your business. A valid business structure will decide the tax and liability for your business. Below mentioned are the types of business structures that work best for food business owners:

1. Sole proprietorship
2. Limited liability company (LLC)
3. Corporation
4. Partnership

Apart from deciding proper business structure, business owners should also file proper taxes and keep records of their income, expenses, etc for the smooth running of their business.

Step 3 : Decide Features And Functionality

After deciding on the business structure and abiding by all the legal requirements, the next step is to decide the features and functionalities you want to offer to your users. Unique features can give you a competitive edge over your competitors. The features you include would ensure your platform stands out in this hyper-competitive online food delivery industry.

Below are the must-have features for a successful online food delivery business.

• Push Notifications
• Multi-lingual
• Easy order placement
• Easy registration
• Profile management 
• Order management
• Analytic and reports
• Geo-fencing
• Search filters
• Order history
• Ratings and reviews
• Real-time GPS tracking
• Optimized routes
• Easy multipayment options
• Gift cards, coupons, discounts/reward, loyalty programs

Step 4 : Select an Aligned Developmental Methodology

After finalizing the features and functionalities of your online food delivery business, the next step is to build a reliable online platform. This platform should streamline your online food business operations and must help efficiently manage all the stakeholders. The two most popular ways to build an online platform are

• Custom development
• Ready-made software solutions

In custom development, the platform is built from scratch. You need to hire a skilled and experienced team of developers and designers to handle the development process. To custom-build your platform, you need to make a huge investment and put in more effort and time. The major drawback of custom development is that it is a complicated and lengthy process, to begin with.

On the other hand, a ready-made software solution can help you launch your online business in less time and is more cost-effective as compared to custom development. This solution comes pre-integrated with numerous features to smoothly run an online food business. Ready-made solutions efficiently cater to the needs of all stakeholders in the online food delivery business.

The major advantage of the ready-made solution is that it is a simple and hassle-free option. Moreover, ready-made software solutions offer almost the same features as those offered by custom development, hence, making it a popular choice among entrepreneurs. 

Step 05: Launch and Promote Your Business

The question of how to start a food delivery business has been covered, but it is incomplete without addressing the promotional aspect of a platform. Make your product market-fit by following an established and trusted marketing procedure. Before launching your food delivery business, configure your web pages with SEO. Moreover, functional testing of the platform for device compatibility, website loading ability, and more adds to the durability of the website. 

Finally, one can successfully market their platform by leveraging the advantages of digital advertisement channels. Pre-launch marketing of the website through social media campaigns, email marketing, paid advertisements, influencer marketing, and more leads to a comprehensive promotion. 

What Future Hold for the Online Food Delivery Business in 2025?

For the past few years, the online food industry has seen rapid growth and it will continue to evolve at a fast rate. Good food will always entice food orders, stimulating the potential for perpetual growth in the industry. This is why the usage of mobile apps for ordering food will continue to increase, as these have eliminated the need to visit a food outlet to dine.

Mobile apps provide the convenience of ordering food at any time and ensure quick delivery too. Therefore, consumers are likely to become more dependent on online food ordering and delivery in the near future. This dependency of people on these online delivery platforms is creating a huge demand for such platforms that can efficiently solve the pain points of customers and provide the best services. 

With the ever-changing technology and trends in the food industry, companies will need to evolve and innovate continuously, whether it is in terms of adopting a drone delivery method or using 3D food images.  

If you want to start a food delivery business and don’t know where to begin, or you are facing difficulty in understanding the food delivery business model, our FATbit experts are here to help you.

How can FATbit Assist in Starting a Food Delivery Business?

FATbit Technologies is a seasoned software development company with over two decades of industry experience. It has consistently delivered high-quality eCommerce platforms and mobile applications tailored to the needs of modern entrepreneurs. As a client-centric solutions provider, FATbit follows agile methodologies to develop fully functional and highly efficient ready-made hybrid mobile apps. Among its many acclaimed software products, one of the most prominent is Yo!Yumm — a powerful solution for launching and managing online food delivery businesses.

How Yo!Yumm is a Cost-effective Solution To Start Your Business?

Yo!Yumm is one of FATbit’s fully functional and versatile software solutions, designed specifically to help aspiring entrepreneurs launch a food delivery business. It supports multiple niches and business models, all available at a one-time cost — making it a highly economical choice. Below are some of the unique value propositions that make Yo!Yumm one of the best solutions in the market.

Key Benefits 

1. 100% Self-Hosted and White-Label
2. Fully Scalable and Customizable
3. Lifetime License at a One-Time Cost
4. 12+ Integrated API’s
5. Supports 5+ business models
6. 10+ Niches Catered
7. Free Personalised Demo
8. Free 1-Year Technical Support
9. Comprehensive Documentation
10. Supports 3 Mobile Apps (Android and iOS)  for its User Types . 

Food Delivery Business Triumphs by Yo!Yumm

Yo!Yumm has delivered high-quality food delivery platforms to its global clientele, offering premium apps and features. Given are two esteemed clients of FAtbit Technologies, leveraging the benefits of the lucrative food delivery industry with an advanced mobile app and platform. 

1. FoodPulse

FoodPulse is a Nigeria-based client who presented his unique business prospect with the Yo!Yumm team of experts. The client was offered a tailored software solution, customized to meet the platform owner’s business requirements. Yo!Yumm integrated custom features for FoodPulse and provided them with a high-performing mobile app and website for all its dedicated user types. Some noteworthy features include payment gateway integration, multi-city delivery support, a real-time location-based search feature, and more.

2. FreshEats

FreshEats is the brainchild of a UK-based client who identified the customers’ pain points and their inability to receive convenient home delivery of authentic local food. The platform harnessed the extensive customisation abilities of Yo!Yumm, the ready-made software solution, and launched an advanced online food delivery business with premium feature integration. FreshEats is customised, resonating with the business owner’s vision with features such as a new payment gateway, thermal printer integration in the merchant app, geolocation, and more. 

Concluding Thoughts

The online food delivery business is proliferating due to significant digital migration and the busy lifestyles of working individuals. The convenience and variety of options offered on these platforms have also expanded the size of the target audience in this business opportunity. Yo!Yumm was developed after countless hours of market research, integrating all the essential industry-specific features to facilitate numerous clients in the industry. To learn more, get in touch with industry experts and seek the best assistance from the FATbit professionals. 

FAQs

1. Is food delivery a profitable business?

The consumer demand for online food delivery has steadily grown over the years. The market is expected to reach a value of $33.7 billion by 2026. The food delivery market is clearly driven by the convenience of having the food delivered to the doorstep, the prevalence of smartphones, increasing internet penetration, and the busy lifestyle of people. 

With the reduction in errors, labor expenses, waiting time and long queues, the usage of online food delivery apps is rising worldwide. Hence, we can anticipate this industry is going to flourish and provide lucrative business opportunities to budding entrepreneurs in the near future. 

2. How much does it cost to set up a food delivery business?

Setting up a food delivery business depends on various factors. Business owners should identify their requirements first, then start investing their money. The expenditure depends on the factor whether you are opting for custom development or a ready-made solution. In addition to that, the cost will also depend on the customization and functionality you want in your app. 

However, opting for a ready-made solution to set up your food delivery business is the best way to save money. It is more cost-effective and affordable. If you choose Yo!Yumm to set up your business, its packages are available at extremely affordable prices.

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