Setting Up A Shared Kitchen or Commissary



“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?”

HH Answer:

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).

  • Advertise availability:

In Your Window

On Loopnet

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,