Setting Up A Shared Kitchen or Commissary
QUESTION From K in WA:
“I’m thinking about turning my bakery into a commissary kitchen and looking for advice. What is considered when calculating their costs, and what are some ways to connect with a small start up?”
Thanks for your question K. I think a lot of people consider going this route but don’t quite know where to start.
Consider using the following method:
[(Total Monthly Rent / Available Day Parts per month) x 3 ] = Commissary Fee
e.g., $3,000/mo / 30 dps
(e.g.,approx 5pm-11pm) = $100
$100 x 3 = $300/day
Other things to consider before sharing your kitchen:
Offer a discount for week-long and month-long reservations.
If you lease the space, make sure you are permitted to sub-let / sub lease. If your Lease prohibits it, there are a few solid negotiation strategies that might work with a Landlord who’s interest in keeping you as a Tenant.
Offer seating for an additional fee.
If you don’t have a security system with cameras in place already…get one now (with every corner and entry point covered) - as well as a keypad entry access to see who is coming, the times they’re there and how often.
Invest $10-15k in: lockable cabinets for smallwares and dry goods, a lockable upright refrig and an upright lockable freezer, a six-top burner and grill (guessing you might not have/need those for your bakery) and a large mountable mirror and/or television monitor for cooking demo/class use.
Write opening and closing Cleaning & Inventory checklists for all areas and shared items.
Draft an agreement with rules, policies, code of conduct, Serve Safe requirement, liability insurance assignments, fees for cleaning and replacing dirty, damaged or broken FF&E, guest policy, etc...
Get a pre-authorized cc deposit or cash deposit with credit check.
File a new LLC that manages the subletting as a separate legal entity and get a general liability & E&O policy for the new company (you don’t want any potential blow back on your bakery or on you personally).
In Your Window
On Facebook groups (restaurants, food, cooks, bakery, wine and paint, etc…)
On Zillow (as a FSBO)
With Local AirBnB operators (as a potential amenity / tie-in)
At Your Local 1Million Cups Chapter (as a sponsor or presenter)
At Local Culinary & VoTec Schools (for proof of concept)
At Local Colleges/Universities (think thesis, projects and fundraisers)
At Local Franchise Seminars
At Gourmet Grocery Stores (take a “cooking club” approach)
With local SBA / SCORE chapter (as a venue for proof of concept and fine tuning recipes)
To Vendors at Local Farmers’ Markets (as a commissary for prepared foods)
With Local Commercial Real Estate Agents (they get a lot of tire kickers who aren’t quite ready yet - or who may be but aren’t yet financially qualified)
Remember you don’t have to spend a ton of time looking for a “standard” agreement. You should, ideally, have enough discussion with the renting party ito not only meet the expectations of everyone involved but also ensure that agreement is a realistic / feasible structure or both of you.
Hope this helps,