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Commercial Kitchen Rental General Questions from a Kitchen Owner

post #1 of 35
Thread Starter 

Hello to everyone!

 

I have a shop in Toronto that has become a kitchen incubator or sorts. 

 

The short version is I now have just about finished building our second commercial kitchen which we use for rental to help support small biz. I have many businesses ready to sign in once we are complete as there really isn't a lot of commercial kitchen space available in our area. 

 

While going through the process of building our first kitchen, and then second kitchen, I started thinking about how I would expand my new kitchen rental business and my thoughts came back to my days as a cake decorator. 

 

I would love some feedback and honest opinions from all of you before I move forward with the next phase of my plans. 

 

My shop is currently divided up into a kitchen with a small dine in and retail area on the main floor. Big double doors open up from the kitchen to the dining room to allow for cooking classes and demo's. once you go down the stairs, I have a second kitchen, storage, office space, washrooms etc. 

 

I am considering getting out of the restaurant biz all together as I find I have more passion for helping new food biz launch, and have some big plans for industry shows and ways of promotion for my clients, and just small biz in general. 

 

I was thinking about turning my front dining space into a bakers studio. have 6-8 individual work stations, a few convection ovens, mixers, an air brush station, etc..... the ovens would be shared and the space would be open like a studio, but each client would have their own work table....

 

I know when I was baking, I had to stick to friends and family because I just could not afford the kitchen space. I have also had to deal with a few bakers "pretending" to work from my kitchen but actually baking from home to save their money. So I was looking for ways to make this more feasible for small bakers. 

 

Would you use a space like this? Would you join a "bakers club" of sorts....

Would you pay hourly? Or would you prefer to pay a monthly fee giving you access 24/7? How much would you be willing to pay hourly for this space?

How much would you be willing to pay for a monthly membership??

Would you be bothered sharing a studio space? 

Would you find it helpful to be in a small community with other bakers where it would be possible to share resources, tips, and other useful things?

Would it be more financially feasible to have equipment shared by all, decorating tools etc......

 

ANY feedback you have would be great!!!

 

Thank you all for reading my extra long post and Thank you in advance for any thoughts you may have!!

 

Sonya

 

*Mod edited to remove bits not allowed.

post #2 of 35

I've allowed this thread to remain because I think it asks some really insightful questions from the landlord perspective that don't get discussed very often here.  Lets keep advice and feedback very general and in no way a direct solicitation.

 

Thank you.

post #3 of 35
Thread Starter 

Sorry. I didn't mean to offend. I am just interested in feedback. 

post #4 of 35
Depending on how representative your shop is of your prospective tenants, you may be able to answer these questions yourself by looking at the business plan for your shop as if you had to rent kitchen space. Depending on your other costs and market prices for various products you should get a pretty good idea of how much you would be able to spend on rent and still make a decent wage and profit -- this will be your maximum rent. Don't forget to factor in costs for renting dry storage, refrigerator space, and freezer space.

On the other side of the equation, you need to take into account the costs you will incur (operating and overhead) from tenants using kitchen areas and prep areas. Adding profit to these costs will give you your minimum rent, hopefully this will be lower than the maximum rent outlined above.

To discourage "pretend" tenants I recommend a minimum membership fee on a monthly and/or yearly basis (we paid $1000/year for the kitchen we rented). For the rent itself, there's no reason you can't offer both an hourly rate and a monthly "unlimited" rate, with the hourly cost sliding down as tenants purchase more hours.

There's nothing wrong with sharing space (and some equipment like ovens and large mixers) but remember that your tenants will probably be competing against each other in the marketplace so too much sharing may not be appropriate. You also need to make sure tenants will clean up after themselves and be ready to charge them accordingly when they don't.

Regarding the layout, we worked in one rental kitchen that was an open studio setup, and one rental kitchen where each area was clearly separated with walls (not fully enclosed, more like dividers). It was much easier to work in the latter, since with an open studio people tend to "spread out" beyond their area.
post #5 of 35

I'm glad this didn't get deleted because I think you asked some great questions.  I work in a commercial kitchen, and the reason I work in the one I do is because it has a separate baking area with a separate walk-in.  Savory chefs cannot ever use our (MY!) ovens, no matter how full the main line is, and only baked goods and baking ingredients can be stored in our walk-in.  

 

I've only ever tried to use he burners in the main kitchen once - I needed to cook a huge batch of SMBC while my assistant was making caramel and I only have one induction burner in the bakery.  So I went out on the line.  It was a full house, like it always is there.  Next to me I had a dude frying massive batches of chicken, the huge tilt cooker had a massive batch of tiki marsala in it etc.

 

After I got my eggs cooked up I took them back to the bakery to whip and add all 20 lbs of butter.  When it was done mixing, my entire batch of buttercream tasted like onions and curry.  icon_mad.gif  Now I know better and don't ever cook out there.

 

The kitchen I rent from is the oldest, most decrepit in the city, and it's located, literally, in one of the most dangerous parts of town.  There are much fancier places with reputations more suited to the reputation of my baking business, but I ain't leaving where I am any time soon because *none* of them have separate baking areas, ovens, fridge space or storage.  I can't imagine how others bake and decorate cakes in the middle of savory cooks doing their thing in commercial kitchens.

post #6 of 35
Quote:
Originally Posted by canadiancookie View Post

I know when I was baking, I had to stick to friends and family because I just could not afford the kitchen space. I have also had to deal with a few bakers "pretending" to work from my kitchen but actually baking from home to save their money. So I was looking for ways to make this more feasible for small bakers. 

 

Would you use a space like this? Would you join a "bakers club" of sorts....

Would you pay hourly? Or would you prefer to pay a monthly fee giving you access 24/7? How much would you be willing to pay hourly for this space?

How much would you be willing to pay for a monthly membership??

Would you be bothered sharing a studio space? 

Would you find it helpful to be in a small community with other bakers where it would be possible to share resources, tips, and other useful things?

Would it be more financially feasible to have equipment shared by all, decorating tools etc......

 

ANY feedback you have would be great!!!

 

Thank you all for reading my extra long post and Thank you in advance for any thoughts you may have!!

 

Sonya

 

*Mod edited to remove bits not allowed.

There's so many points in your post and other peoples responses I barely know where to begin.

 

Maybe if I list some of the random issues I had, would help you?

 

You must really maintain your equipment. I'd get really upset when I'd needed the 60qt mixer and it wasn't working. It completely ruined my production schedule and how I prepped before going to the kitchen.

 

Or times when I couldn't find all the parts I needed to make the equipment work.

 

Or the time I went to make buttercream just to discover the owner didn't buy the whip attachment for the large mixer and didn't understand why anyone would need it.

 

Then you turn to the smaller equipment and discover everyone else has used it all and there isn't a mixer available.

 

I couldn't get my egg whites to whip because their soap system was empty and everyone had been washing dishes for god know how long with-out any soap in the water. I lost time and materials!

 

They had 4 kitchens but only one had one double stack convection oven and just about everyone who rents there are bakers. So if someone else had the ovens tied up, you couldn't bake off your product, period.

 

The refrigerator's need to be separated into bakers and savory so the smells don't co-mingle. Savory people put hot food (soups) unwrapped to in the coolers...then left them over night steaming my cakes and stinking them up.

 

The refrigerators and freezers were the wrong size so you couldn't fit a full sized sheet pan straight into your shelf. That makes you spend more time figuring how to package/seal up your products and purchase smaller sized equipment just to use their space. When you paying by the hour, seconds count and having to do everything the hard way or with double steps was killer!

 

They had a bunch of sheet pans, bowls etc... but people stole them all, so now you must bring everything you can think of....and never have a problem because you couldn't reach for plan B. if you didn't bring plan B with you.

 

Pricing:

 

The place I use cost $25.00 per hour with a min. of 2 hour block each time you book. When I make a cake I need to bake it and let if cool for hours, after it's cool I can decorate. So it costs me $50.00 (their min.) to bake the cake. Then I have to book another $50.00 (2 hour min.) to decorate it. I can't build a business off of that.

 

The top shelf of the cooler costs as much to rent as the bottom. But the top shelf has less then a 12" clearance and the bottom shelf has over 24". If I make a wedding cake it must be placed on the top shelfs so no one can spill on it or drop crumbs on it. But the top shelf isn't tall enough to place a double stacked cake on and it drips condensation. So if I have a wedding cake I have to buy 3 shelfs for $75.00 a month.

 

So now I have $175.00 into rental fees just to make a double stacked cake. I can't run a business with that kind of over head.

 

I tried to negotiate a monthly rental fee with this owner and the best price I could get was $2,500. per month. If I had that kind of money I could rent a prime retail location! That was offering to work the grave yard hours when no one ever rented the kitchen anyway.

 

Space:

 

It was a huge warehouse and the sinks and small wares were on one side of the place. So everyone wanted the two kitchens closest to the sinks. The time I'd waste running around this huge building was a horrible time waster!!!!!

 

The community mixer was off in another direction no where near a sink or oven. Again creating a lot more running and a hard to work in space.

 

............that's just the start of things. I'll try to help you if I can because I really believe these kitchens can work if the owner is willing to listen and work with their customers.

 

Oh, my favorite, the owner would loose track of who paid and who didn't, and for how many hours you rented. So you could get double billed and there's nothing you could do about it.

 

Every single little change/issue you needed to call the owner to get their approval (and they were out of the country often). If you got stuck in traffic, too bad, so sad. If the cake got cancelled oh well you booked the time, no cancelling. But if their equipment wasn't working they didn't refund your money. If you couldn't get near an oven, that's your problem, no refunds.


Edited by Stitches - 4/24/13 at 9:44am
post #7 of 35
Thread Starter 

Wow. You guys are great!! Thank you for the feedback so far! SOOOOO much appreciated! 

 

The kitchen we are opening will be strictly sweet. My other kitchens are set up better for the savory guys and I prefer to keep those kitchens rented one business per kitchen at a time. 

 

I think a studio type setting is more workable in a bakers setting, it also would help keep the cost for bakers down by having a number of businesses in at the same time. 

 

I do like the idea of half walls/dividers....a little privacy and also allows for some shelving for storage. Thank you. 

 

I love hearing all the complaints and issues you've come across. It is very helpful to me as I want to make it an enjoyable and efficient work space! 

 

I'm a bit strict with things like cleanliness and supplies. I know when I happen to be missing even one pairing knife. But it is definitely something to keep in mind. 

 

8 workstations. Each one fitted with their own bowls, utensils, small 6qt mixer, food processor, etc. (would help know when something is missing and who might be responsible for it I would think)(we also have security camera's onsite currently...and have never come across any issues in our two years with theft) A wall with what I was thinking would be 3 sets of double stacked convection ovens. An air brush center. Is 6 ovens enough with 8 stations? I would assume not everyone will be baking at the same time. 

 

You mentioned a 60qt mixer. Do you all think that is going to be a common request? Something of that size? (I was never busy enough to require that) Would one of those suffice? With a few 20 qt? Is 20 qt too small?

 

I would like to see a sheeter in there. (only because I have been asked once or twice if I have one currently) Is this something most would use? Or have you managed without it?

 

I currently use commercial double door fridges, which I can fit a full size sheet pan in. Are these the same size you are referring too? I wonder if I would be better off with a walk in?

 

What else is a must have? 

 

 

Pricing:

 

I know the market is different everywhere. However I was thinking about setting the place up into shifts and charging a monthly fee. For ex. days, afternoons, nights, and the weekend warrior shift. 

 

Would you pay $800 a month to use the kitchen whenever you wanted in the shift of your choice? That would be 40 hours a week (days/aft/midnights/or weekends)....break it down is about $5 an hour. Would you pay more? How much more? Would you only pay less? How much less?

 

In my current kitchens I charge MUCH more then this, however I do not like having more then one business in there at a time. I think any baker who is interested in having a more private space could rent one of these kitchens. I have had a couple bakers here in the past, however I feel guilty charging them $25 an hour knowing that they are mostly just sitting there decorating.....so I charge less for them, however it's a catch 22 because I know I could be making more renting to a caterer or food producer. 

 

I strongly believe these kitchens can work too! My current kitchens have been working great. I've had to deal with a few messy caterers, but once you threaten to charge them insane cleaning fee's, they suddenly remember how to clean. 

 

 

Please keep any feedback at all coming! Love it! 

post #8 of 35
Quote:
Originally Posted by FromScratchSF View Post

I'm glad this didn't get deleted because I think you asked some great questions.  I work in a commercial kitchen, and the reason I work in the one I do is because it has a separate baking area with a separate walk-in.  Savory chefs cannot ever use our (MY!) ovens, no matter how full the main line is, and only baked goods and baking ingredients can be stored in our walk-in.  

 

I've only ever tried to use he burners in the main kitchen once - I needed to cook a huge batch of SMBC while my assistant was making caramel and I only have one induction burner in the bakery.  So I went out on the line.  It was a full house, like it always is there.  Next to me I had a dude frying massive batches of chicken, the huge tilt cooker had a massive batch of tiki marsala in it etc.

 

After I got my eggs cooked up I took them back to the bakery to whip and add all 20 lbs of butter.  When it was done mixing, my entire batch of buttercream tasted like onions and curry.  icon_mad.gif  Now I know better and don't ever cook out there.

 

The kitchen I rent from is the oldest, most decrepit in the city, and it's located, literally, in one of the most dangerous parts of town.  There are much fancier places with reputations more suited to the reputation of my baking business, but I ain't leaving where I am any time soon because *none* of them have separate baking areas, ovens, fridge space or storage.  I can't imagine how others bake and decorate cakes in the middle of savory cooks doing their thing in commercial kitchens.

 

ALL OF THIS!  I find it virtually impossible to use our restaurant kitchen for baking . . . stuff smells like garlic, every walk in/prep station has got something "savory" (read offensive) smelling in it that keeps me from storing any baked good in it.  If smoked salmon has been in the oven, you have to reverse the convection fan to try and get every bit of odor out of it.  My only solution has been to bake when no one is working, and you have to be able to blast freeze almost everything you make, so it won't pick up odors.

 

Liz

Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

Reply

Follow me on my Twitter handle: @Sugar_Iowa

Or on Facebook: https://www.facebook.com/SugarFineBakedGoodsAndConfections

Reply
post #9 of 35
The commercial kitchens I've seen usually have separate areas for prep work vs. cooking/baking. Renting a prep area costs less than a cooking/baking area.

How big of a space do you have? 8 workstations will get pretty crazy unless you have a huge space. Since you have 3 double ovens you may want to go with 3 cooking/baking areas with the rest of the space prep only.
post #10 of 35
Quote:
Would you pay $800 a month to use the kitchen whenever you wanted in the shift of your choice? That would be 40 hours a week (days/aft/midnights/or weekends)....break it down is about $5 an hour. Would you pay more? How much more? Would you only pay less? How much less?

That seems like a pretty low price, it might be OK for off-peak time only but if your $5/hour tenants are reserving prime times and crowding out your $25/hour tenants you are losing a lot of money.

How much is your fixed overhead for the space, and what is the operating cost per hour based on different utilization scenarios?
post #11 of 35

Everyone needs their own ovens. You can't share ovens, it doesn't work.

 

What temp. is it set at? Everyone bakes at a different temp..

 

What if the other persons stuff burns...it ruins the smell of your items in the same oven.

 

Every shelf in every oven bakes differently. For example the top shelf always browns more then the middle. Someone making macaroons doesn't want a browned cookie.

 

I LOVE the idea of charging different rates for different areas of the kitchen. I'd pay more for oven time considering there's at least 8 racks in a double stack oven, so you can bake a lot at one time. But then when you decorate or package items, things that take a lot of time paying a lesser fee would be great.

 

I need the bigger mixers. It's why I rent kitchen space. It's just like using a bigger oven. If you can't work in volume it's cheaper to cheat and work at home.

 

A 20qt. mixer does nothing for me. If I have to make multiple batches of frosting for one wedding cake, it increases my time/labor....so it's less profitable for me.

 

I don't think you need a sheeter. That strictly depends upon the type of baking happening. Sheeters are for laminated dough's like croissants or puff pastry (both of which aren't profitable for the small time baker to bake)...so they are rarely used by professionals in a rented kitchen situation. A sheeter for fondant would be super cool. But I think it will bring more headaches then you want. Instead, I would love to personally buy my own sheeter or piece of equipment and store it at your kitchen safely. Just as I would need to bring my own pans (and more) and store them at your shop.

 

I prefer a monthly rent verses an hourly rate!! Life in a kitchen for bakers has a lot of waiting. We can't bang out product like the hot side can, as you already know from your experiences with caterers.

 

You have to shop out what retail shops are getting in your area. I can rent a place for $1,000. all over town.

 

So your have to choose who your targeting just like the bakers have to attract their customer. At $500. dollars per month, it would keep your kitchen FULL all hours of the day,(with a waiting list). Verses $800. to $1,000. per month is probably not going to sell out around the clock. That changes who your appealing to. Those that have more money will rent their own place.

 

The place I use is strict on cleanliness too.....which make me loose time worrying about keeping things perfect. But it still doesn't protect me from picking up dirty bowls or being certain there is soap in the dispenser or someone is there when the drain clogs. They "think" they are doing great.....but the truth is unless your there 24/7 you really don't know the struggles that go on in your own kitchen.

 

Refrig. space I'm referring to is that you can insert a sheet pan length wise into the cooler. If you have to turn it sideways and tilt it on an angle to get it into the cooler, that doesn't work well at all!

 

Another thing that's WAY cool is having tight spacing storage in your coolers and freezers. In professional kitchens we have shelving like carts with-out wheels where full sized sheet pans can be stacked very tight. Where as with a standard shelved cooler and freezer you can't stack 14 sheet pans of product on one shelf space.

 

Double door coolers are another point. I did a wedding cake with an 18" base and it didn't fit into the cooler! Even though it's a double door doesn't mean that it doesn't have the center wall between the two doors. It might still only have a 16" width for inserting product.

post #12 of 35

What's your sink area like? It's pretty frustrating if someone else is washing two sinks full of dishes and your waiting (loosing time)in line to rinse out a dirty mixer bowl that's preventing you from producing.

 

Sink areas are big congestion areas. Teach people to use bus boxes in their own area and only wash when they have a full sink full.

 

Better YET, a small under sink commercial dishwasher is a miracle worker!!!! The ones I've used cycle faster and hotter then you can hand wash. That would be FAR FAR smarter then investing in a sheeter  only a few would use.

post #13 of 35
Quote:
Originally Posted by Stitches View Post

You have to shop out what retail shops are getting in your area. I can rent a place for $1,000. all over town.
For an apples-to-apples comparison you need to take into account all the expenses associated with running your own shop, not just rent. As a landlord, tenants who are paying cheap monthly rent filling your kitchen to capacity is exactly what you don't want.

Also, baking processes do not necessarily have to include a lot of waiting time. Even at low volumes there are ways to redesign your operations to utilize slack time and improve efficiency.
Edited by jason_kraft - 4/24/13 at 12:08pm
post #14 of 35
I am intimately aware of 3 different kitchen set-ups where I live.

1). My kitchen has the desperate bakery space. It is slightly larger then an average bedroom and has 1 metal prep table, 1 giant wood table, a double convection, a triple deck oven, sink, 100q, 30q and a 5q mixers and one speed rack. We are entirely self contained. But you have to book your hours in advance and only one baker is in there at a time. The plus side is I am totally self contained and share zero. The bad side is if I need to work off my regularly booked hours I have to pray the bakery is not already booked. I pay hourly and monthly. I pay extra for my sub zero, a while section in the walk-in, and 2 lockers for all my equipment. If I were a savory chef all the prep tables and ovens are in one big room, they work when they need to and log their hours based on honor system.

2). Kitchen #2 is a giant room with prep tables in the center, equipment along the walls. You work when you want and log your hours based on the honor system, tables are free for all and so is the equipment.

3). Kitchen #3 is also a big room, tables in center, equipment along the walls, but you have to book in advance each and every thing. So first you book your day, then book your table, then your mixer, oven, sink time etc. So tedious.

Anyway, examples of 3 set-ups.
post #15 of 35
Here are some pictures of the kitchen we rented in San Jose, showing each of the three separate work areas and the sinks. There was also a shared walk-in fridge and freezer.

http://www.cookithere.com/Kitchen/KitchenDetail?kitchenId=88
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