It is one of the most sensible uses of the format. Lower capex and a smaller commitment let you prove demand and unit economics before a full dine-in build, one kitchen can run several delivery brands at once, and you can enter a catchment cheaply to read real demand before committing to a flagship site there. The discipline is to run the numbers on real orders, not hopeful ones, before deciding whether to scale.
From Cloud Kitchen Consultant in Dubai — the full reading, with the method behind this answer.