How to rent a commercial kitchen for your business
Commercial kitchens are a fantastic way to test, grow, and scale your food business. You may need to rent commercial kitchen space for various reasons, such as starting a new food truck business, opening your own catering company, holding a pop-up restaurant event, or creating and distributing food or baked goods online. Whatever your reasons, it’s an exciting step to secure the right commissary kitchen for you and get to cooking!
This article will discuss how to rent a commercial kitchen for your business, including cost, insurance, and the type of kitchen that’s right for you. Once you’re finished reading, you’ll be ready to take the next step toward achieving your culinary business goals.
Let’s dig in!
What is a commercial kitchen?
When it comes to food businesses, a home kitchen rarely cuts it. To grow your business (and follow health and safety regulations), you’ll need to rent a commercial kitchen. These kitchens meet specific licensing and inspection requirements that ensure all food stored and prepared in them is safe for consumption. Without the strict rules in place in a commercial kitchen, food businesses run the risk of contaminated food, which can cause illness.
What’s in a standard commercial kitchen?
Commercial kitchens supply cooks and bakers with professional equipment fit for restaurant-level food production and, in some cases, food processing. This could mean everything from stainless steel meat grinders and large convection ovens to multiple stoves and walk-in refrigerators and freezers. All pieces of equipment within any up-to-code commercial kitchen are also inspected and maintained to health department standards.
While it may be tempting to skip the cost of renting a commercial kitchen, you may not even be able to sell your food or baked goods without one. Unless you run a cottage kitchen-based business (which is not possible in every state), you must secure an appropriate commissary kitchen to cook your food.
Is there more than one type of commercial kitchen?
Yes! You have several licensed kitchen options from which to choose. Each one offers its unique benefits. Choose the one you think best fits your needs.
Private Commercial Kitchens
Private commercial kitchens give you exclusive access to the tools and equipment you need. You will have access to the entire space, which is ideal for those who need a full-service kitchen available to them at all times. However, they come with higher rental rates than other options on this list.
Choose this option if you require a kitchen during standard working hours and for live made-to-order concepts such as a virtual restaurant.
Shared Commercial Kitchens
In a shared kitchen, you will likely have access to the same tools and equipment as you would in a private kitchen. The difference is time. You are the sole leaseholder in a private kitchen, so you can be there whenever you want for however long you need. You must share with other restaurants and food-based businesses in a shared kitchen.
You will have a portion of the storage space but not all of it. You will also have to work on a predetermined schedule, which can be problematic depending on your business type. However, this is a great option for budget-conscious entrepreneurs and those who can work off-hours (such as late at night) and still get the job done.
In some cases, you may be able to rent a restaurant kitchen. You will only have access to the space during their off-hours, which is fine if, for example, you rent a dinner-only restaurant’s kitchen to run a breakfast pop-up. As long as your schedule aligns with the restaurant's schedule, this can be a great way to save money while pursuing your culinary dreams.
Non-Traditional Commercial Kitchens
You may have luck sourcing a non-traditional kitchen such as a church kitchen, school kitchen, or retirement community kitchen. These kitchens must maintain the same standards as restaurants and other commercial kitchens, and they may be more cost-effective than other options in your area.
You may also be able to use the rest of the building as a pop-up event space if you need it. However, finding one of these gems can be difficult, and they likely won’t be as well-stocked in terms of tools and equipment as in a traditional commercial kitchen.
Food Business Incubators
This type of shared kitchen comes with additional perks such as business training, brand development, restaurant marketing capabilities, and even cooking classes. This type of commissary can be a good choice for food entrepreneurs who want help with multiple aspects of their start-up that go beyond the food itself.
What should I consider when choosing the right commercial kitchen?
Now that you know the different types of kitchens available, let’s focus on how to choose the right one for you. You’ll need to consider a few key factors.
First and foremost, how big of a kitchen workspace do you need? The average commercial kitchen is about 1,000 square feet. However, every kitchen is different, so consider how many staff members you will need in the space at any given time, as well as prep and storage space. If you’re not exactly sure, choose a kitchen on the larger side. Too much space is better than too little.
Prepare a list of the equipment you need and check with the kitchen’s owner to ensure they have what you need. If they have a complete list of all their equipment, even better. Then you’ll know what other pieces of equipment they have available if you choose to add new menu items or try a different cooking technique.
Beyond how much storage you need (as discussed in the Size category), you’ll also need to see the type of storage available. Is there adequate fridge/freezer storage for your needs? What about dry storage? Consider your potential growth as a company, too. If they have just enough storage to accommodate you now, the space might be too small in a few months as you continue to require more storage to keep up with demand.
How clean and compliant is the space? The inspection history will tell you. If the company is hesitant or unwilling to share its inspection history with you, move on and seek a commercial kitchen with a sparklingly clean inspection history.
You will have waste—possibly lots of it. Check with the kitchen’s owner to learn how that waste is disposed of. Are you responsible, or do they have a service? Neither has to be a deal-breaker, but if you’re not excited about disposing of your trash, cooking oils, etc., then look for a space that provides waste removal services.
Kitchens can book quickly. Look early and look often. If you find a space that fits your needs, seize the opportunity! It may not be available even 24 hours later. If you look early enough, you may be able to get on a waiting list for the perfect kitchen.
How much does a commercial kitchen rental cost?
As you can see from the above sections, commercial kitchens can vary widely. So, too, does the cost. You may be able to find a kitchen space to rent for as little as $15 an hour, but you may need to pay as much as $40 an hour or more, depending on what you need. Entrepreneurs in high-cost areas like New York, Chicago, San Francisco, or Los Angeles can expect to pay even more.
You may also find a lease option available, rather than by the hour. In these cases, expect to pay at least $300 a month, or as much as $800 a month or more. In some additional cases, you may need to pay an upfront security deposit or a monthly membership fee to use the kitchen.
What are the pros and cons of renting a commercial kitchen for my business?
A commercial kitchen can bring many benefits to you as a culinary entrepreneur, but it does have its drawbacks. Let’s look at some main pros and cons of renting a commercial kitchen.
- Flexible. Even if you rent by the month, you aren’t ultimately tied to your choice of commercial kitchen. Unlike buying a space of your own, you can leave easily if you decide the kitchen isn’t a fit for your needs.
- Low overhead. You rent the space, and the equipment is included. This can mean huge cost savings as you aren’t responsible for purchasing all the necessary equipment and tools to run your kitchen.
- Compliant. You can leave it up to the kitchen owner to ensure that the space is up to code. This can save you a lot of time, frustration, and money that you would otherwise spend on gaining and maintaining compliance.
- Maintenance. The kitchen owner is responsible for maintaining all the equipment. This again saves you time and money.
- Short-Term Savings. Renting a kitchen saves you money upfront. It is by far cheaper than building or buying your own commercial commissary.
- Scheduling. This only applies if you are not renting the entire space. Shared spaces come with scheduling problems that can get frustrating if another business does not respect the schedule.
- You get what’s there. While you get access to the kitchen and all its equipment, that’s not always a good thing. The equipment in a commercial kitchen will be up to code, but it may not be state-of-the-art. You may also show up to discover that a certain piece of equipment is broken. That’s an unhappy discovery when you need to start prepping right now.
- Sharing. If you share space with other respectful, mindful businesses, this can be a good or at least a neutral aspect of renting a shared kitchen. However, you may run into issues of other businesses not cleaning up properly, stealing your stored food and supplies, or creating an unsanitary cooking space.
- Long-Term Costs. Short-term, renting a kitchen can be a great move. Long term, the costs add up, and rates can increase at any time. If you can, plan to purchase or build your own space eventually. While the upfront cost will be sizable, if your business is showing signs of growth, your own customized space will pay off in the long term.
Do I need to insure a commercial rental property?
The kitchen owner will have their own insurance, but you may need to have business property insurance as well. In fact, the kitchen owner may request to be included on that insurance to cover themselves from any negligence claims.
In addition, there are several other restaurant policies you may need to operate in compliance with state law and ensure that you are covered against common damaging circumstances associated with food-based businesses. These policies include but are not limited to:
- Business Owner’s Policy (BOP): A term that describes multiple policies bundled into one. This policy can include some of the forms of insurance listed below.
- Workers’ compensation: Nearly always required by law in every state if you have even one employee. This insurance will cover you in the case of an employee illness or injury sustained while on the job.
- General liability insurance: This form of insurance protects against negligence claims and is essential for food-based business owners.
- Commercial auto insurance: If you own and operate a business vehicle (such as a food truck), you will need this coverage. It protects you against multiple types of damage sustained to your business vehicle.
- Restaurant endorsement: This is usually procured as an addition to a Business Owner’s Policy. A restaurant endorsement is a bundle of several policies specifically helpful to food businesses. These policies include spoilage coverage, food contamination coverage, delivery errors and omissions insurance, and more.
Get insured to run your food-based business with Huckleberry
You will need insurance to operate no matter which type of commercial kitchen you decide to rent. Huckleberry makes getting the small business coverage you need fast and easy. Grab a free business insurance quote now or get an estimate of workers’ comp insurance premiums. Happy cooking!