Renting/leasing a commercial kitchen: What business owners need to know

Thousands of food and beverage makers across the United States use cottage food laws to sell edible or potable items they’ve made in their own homes. But it’s tricky: The laws vary by state and can even vary by county or city. Many areas restrict cottage wares to a certain quantity of canned or baked goods (think pickles, jams, and cookies). Plus, vendors can find it very challenging to produce large quantities of salable food in their home kitchen—just ask the baker cramming pans into his apartment’s single oven or the cook stacking pots next to her single-bowl sink. 

Due to these kinds of constraints, there comes a time when many food and beverage producers need a well-outfitted space from which to launch a food truck, run a pop-up series, or operate a ghost kitchen. Enter the commercial kitchen. 

What is a commercial kitchen?

A commercial kitchen (also known as a commissary kitchen or an incubator) is essentially a co-working space for cooks. Most commercial kitchens are large spaces with professional-level equipment, including commercial ovens, ranges, mixers, slicers, fridges, freezers, prep tables, and speed racks. Caterers, food truck operators, and other types of cooks, rent access and amenities according to the needs of their businesses.

The terms of a commercial kitchen lease

The first key element of a commercial kitchen lease is scheduling. Because most commissary kitchens are shared, your business may be allotted a certain number of hours of kitchen use per month (for example, 10, 25, or 50 hours). It may or may not matter to the kitchen managers what time you use the space. Alternatively, some leases dictate that you may occupy the kitchen for any length of time but only within set hours. In fact, some spaces offer discounts to folks who are willing to only use them during off-peak hours (for example, after 6 p.m. on weekdays and before 8 a.m. on weekends).

Storage space may be included in your lease but often is not. If you want to be able to leave your ingredients, tools, or finished products in the kitchen overnight, you may have to rent shelves in the fridge, freezer, or dry storage area. Forking over that cash can be worth it if it saves you (or your team) precious time and effort.

Scheduling and storage space aren’t the only factors that shape a commercial kitchen lease. While certain basic services should be included in any deal (for example, the use of shared equipment and garbage/recycling removal), you’ll likely have to pay more for certain amenities. For example, some small business owners may wish to pay for the offsite use of towels and aprons provided by the kitchen. Food truck proprietors may find it worthwhile to purchase access to clean water fills and greywater disposal.

How to rent commercial kitchen space

To find a commercial kitchen, you can ask other entrepreneurs in your community where they work, or you can simply check out websites like The Kitchen Door to help you sort through commercial kitchen listings in your area. Your local or state government may also offer some relevant resources. The Minnesota Department of Agriculture, for example, offers a directory of shared commercial kitchens across its state.

Remember that you can easily request a tour of any commercial kitchen to get a better idea of their offerings. Do the tenants clean the kitchen’s shared areas after they’re done using them? Do you spot any mold, pests, or rust? Is the Hobart mixer running smoothly, or does the motor sound like it’s gasping for air? All of this information can help you zero in on the best kitchen for your business.

How much does it cost to rent a commercial kitchen?

Commercial kitchen costs vary by location. Fortunately, many of the commissary kitchens listed on The Kitchen Door share their rates online. For instance, kitchens in high cost of living areas like Los Angeles, CA, may charge around $35/hour for use. Kitchens in Cleveland, OH, can average out to about $18/hour. And, kitchens in Fort Worth, TX, may charge approximately $25/hour. Some kitchens may also tack on additional fees for amenities like storage and the exclusive use of a space.

Before you sign a lease, make sure you’re actually ready to move in. Managers of commercial kitchens want to know that your business can make rent, so be ready to share your business plan or create one to share with them. Consider also getting ServSafe certified and licensed by the appropriate government agency, depending on the location of your business. Your state website will likely offer more information. General liability insurance is also a typical requirement of a commercial kitchen. 

You should have your payment processing system ready to go, too, when working out of a commercial kitchen. Whether you’re meeting your customers at your food truck or they’re picking up food from your shared commissary kitchen, you’ll need to offer them an easy, secure way to exchange their money for your goods. Consider the Clover Flex, a handheld point-of-sale system, and the Clover Go, an intuitive mobile app and optional card reader that can accept all payment types.

Graduating from commercial kitchen rental

How do you know when to move on from a commercial kitchen arrangement and potentially open a permanent location? Keep an eye out for these signs:

• Increased customer demand – Business is booming. You can no longer keep up with customer demand at your current production level.
• More access needed – You’re hampered by inconsistent access to kitchen space. Your team has grown, and so have your needs for privacy and uninterrupted access.
• Cash is flowing – You’ve hit your savings goal and are ready to invest in your own space. 

If you need a dedicated space, but cash is tight, consider Clover Capital, a quick, flexible financing option for small businesses like yours. 

Whatever your end goals, commercial kitchen rental can be an invaluable tool to get your food from your imagination into consumers’ hands. 

And, with a Clover POS, you’ll have the power and flexibility you need to run your business, manage customer orders, and more–wherever, whenever you need.

Editorial Team

Full Service Restaurants (FSR), Insights, Quick Service Restaurants (QSR), Run your business, Strategy

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