How To Start a Commissary Kitchen

“Now more than ever, people want to know where their food comes from.”  Today’s food movement emphasizes organic, farm-to-table, local food trends in which community and collaboration are part of the food experience and the eater’s identity.

Commissary kitchens, also known as shared-use kitchens, are physical infrastructures that play a critical role in any local food system. In most cases, in order for someone to sell food legally to consumers, they must produce food in a licensed commercial space. 

These spaces, regulated by the local health department, offer a safe and clean environment that follows standards of practice for food safety and human health. 

Commissary kitchens allow multiple tenants, or food businesses, to rent or use the facility by the hour, shift, day, week, or month. These kitchens are home to local chefs, caterers, food trucks, product manufacturers, artisans, restaurateurs and more.

Analyzing and Researching the Market for your Commissary Kitchen

When setting out on opening your own commissary kitchen, it is essential that you analyze market factors that influence demand for your kitchen space. If you are charging rental fees and counting on those fees to pay the bills, you want to be sure there is enough demand in your area for the services you are offering. Kitchen utilization is often a key performance indicator for a successful shared kitchen business.

To assess your market, you will want to look at:

  • Target Market and Interest:  You’ll need to access the level of interest among target client types (entrepreneurs, producers, expanding restaurants, etc.).  This information is best suited to come from conducting surveys, interviews, and focus groups. When researching your real estate market, start by first defining what geographic area you are likely to draw clients from. This market area will be important to analyze the potential demand. Consider typical driving distances in your area for the kind of clients you hope to attract. Your market area could be a few ZIP codes or an entire city, county, or metropolitan region depending on your facility, geography, and target business types.
  • Analyzing Your Competition Generally speaking, your competition is comprised of other shared/commissary kitchens.

    Here are your main sources of competition:

    • For-profit and nonprofit shared kitchens, incubators, and food innovation centers.
    • Caterers and packaged food businesses that rent extra time in their own production space. 
    • Commissaries designed specifically for food trucks or carts. 
    • Community kitchens such as community centers, event spaces, and religious centers that can be rented to entrepreneurs. 
    • Nonprofit meal programs or workforce training facilities that rent their spaces after hours. 
    • Restaurants and cafés that rent kitchen space when they are closed.

Remember that rental kitchens sometimes do not advertise or market their space, particularly if they are a food business or community facility renting extra space during off-hours. Take time to search for them so you understand the landscape of kitchen options in your community. This will help you evaluate the supply of kitchen space and develop plans that position your kitchen as a unique offering in your community.

In order to discover other shared kitchen spaces in your area, start by looking at The Kitchen Door. This site provides the nation’s most comprehensive and up-to-date set of local listings. Additionally, many underutilized productions spaces offered by caterers, community kitchens and restaurants are posting on The Kitchen Door to connect with food entrepreneurs in need of commercial space. Many kitchens underinvest in this research because hiring a consultant can be expensive and founders may lack experience with market data. That’s why using an experienced commissary kitchen team and resources such as The Kitchen Door and The Food Corridor (business management software for shared kitchens) is vital.

Other great resources to help conduct market research are:

  • General keyword searches for commissary, licensed, shared, or rental commercial kitchens may turn up more spaces. 
  • Classified ads such as craigslist.org and offerup.com. They often include restaurants and food businesses that rent their kitchens when not in use. 
  • Entrepreneurs at farmers markets, craft fairs, food trucks, etc.,– Ask where they produce their food and if they know of any shared kitchens in your area. If they are familiar with any kitchens, ask about their experiences or impressions.
  • Community kitchens in community centers, senior centers, churches, and event centers.  Ask if they rent space to entrepreneurs for production (not just for on-site events). 
  • Local licensing agencies such as city/county public health and state agriculture departments often have referrals to shared kitchens. 

Once you know what kind of offerings are already available in your area, you’ll want to look for opportunities to differentiate your facility from others. This may be by offering specialized equipment, serving a different type or scale of entrepreneur or business, or by offering something that is superior to what is available. Some kitchens have found that by differentiating from existing kitchens in the types of businesses they serve, they are able to create collaborative referral relationships with other facilities in their area and better withstand competition from new facilities. 

All the Deets on Starting your Commissary Kitchen

Once you have done the research, the ins and outs of actually starting and planning your kitchen can begin. There is tremendous variation in the size, layout, and equipment offerings for shared commercial kitchens. 

Every shared kitchen is unique because it is tailored to the local community, the business model of that kitchen, and the constraints of the site and local regulations. Because of this variation, there is no simple description of what a shared kitchen looks like or should include. Kitchens must develop their plans by engaging designers, stakeholders, and regulators throughout the development process. 

Generally, the design process will start with a kitchen concept that reflects your understanding of your target business’ goals for the facility, as well as your budget constraints. The kitchen concept will evolve into preliminary drawings as you learn more about the factors that affect your project, such as the local market, regulatory requirements, and costs. The final design plans will be developed as you prepare to embark on the construction process. 

The steps involved in construction will depend on a number of factors such as whether you have an existing building secured or will be doing a site search, whether you will be renovating or constructing a new facility, and whether you own or lease the space. 

Due to the complexity of building codes and commercial food production regulations, most projects require an experienced team of designers and contractors to develop the facility. Depending on the scope of your project, your team may include, but won’t be limited to,: an architect, a commercial kitchen designer, a general contractor, engineers (mechanical, electrical, etc.), a commercial kitchen equipment supplier, a plumber, an electrician, an interior designer, and a landscape designer. Once you have your team, you can begin all the stages of planning your kitchen, including design, staffing, regulations, and equipment.

The Design

You should recruit the help of a professional commercial kitchen designer and equipment supplier to assist in determining the layout and equipment needed for your kitchen. As mentioned earlier, your specific needs will vary depending on your business type, scale of production, business model, and the building or building site constraints. For example, a virtual or cloud restaurant, or kitchen designed specifically for delivery, will require a very different flow than a catering commissary. 

You want to establish your design criteria, mechanical requirements, and equipment lists in order to inform your design plans. It may be necessary to work with an electrical engineer to design or upgrade the system to handle the considerable power loads of commercial kitchen equipment. Consultation with ventilation and mechanical system specialists may also be necessary depending on the expertise of your design team. 

Well-designed food prep and manufacturing floor plans balance the sanitation, workflow, and efficiency needs of the operation. A shared kitchen must do this for multiple clients involved in different processes simultaneously. As you design your floor plan, you need to weigh a range of factors, such as: 

  • The workflow for clients working concurrently in the same areas and the need for private work areas. 
  • Efficient utilization of each area to optimize the number of clients and revenue generation. 
  • The balance of floor area devoted to production, storage, retail, or other uses. 
  • Sanitation and the potential for cross-contamination, as well as effective cleaning and sanitation processes. 
  • Cost of ventilation and systems upgrades for different layouts. 
  • Client access to specialized equipment, including the flexibility to change the layout and use areas for different purposes. 

When hiring designers and contractors, look for firms with experience in shared and commissary kitchens, if possible. The Food Corridor offers a Consulting Circle of industry experts with varying experience available to support the various planning phases. Hiring inexperienced firms may lead to higher costs in the end, since they will have to learn the unique requirements of shared kitchens and may initially overlook important details. Ask for references, check their license and insurance, and view previous work before hiring contractors. 

The Staff 

For kitchens that are not owner-operated, hiring staff will be one of the most critical initial tasks. Ideally, you want to hire a kitchen manager or incubation coordinator well before your opening day. Some organizations hire many months, or even a year in advance so the manager can develop services and relationships before the kitchen opens, as well as overseeing the facility and funding development.

Roles and Positions

In general, the kitchen will have an administrator or manager that is either hired or part of the ownership team. The size of your kitchen and the number of programs or services you offer will often dictate how much personnel is needed. Nonprofit kitchens may require additional staff for mission-related activities such as services, outreach, stakeholder engagement, and fundraising. 

Below is a list of potential kitchen roles: 

  • Kitchen Administrator/Manager 
  • Administrative Assistant 
  • Program Director/Manager 
  • Maintenance Manager 
  • Facility Manager/Coordinator 
  • Marketing/Communications Director/Coordinator 
  • Accounting Specialist 
  • Procurement Manager 
  • Operations/Event Manager 
  • Retail Manager

The Regulations

Your licensing and local codes will set the parameters for what is required, so you will want to invest time into consulting with the pertinent regulatory agencies. In the end, it will save you time, money, and headaches to know all requirements before you settle on a site or draw up any plans. 

Most likely you will discover requirements that alter your vision considerably, so it is good to understand the rules early on.  For example, limits on the number of businesses allowed to share a single kitchen area (simultaneously or consecutively) can radically change your revenue projections.  Any number of building code requirements for ventilation, fire safety, or earthquakes can also greatly impact your construction budget. 

Typically there are a host of regulatory agencies you will need approvals from before you can develop and operate your kitchen. Make these relationships early and nurture them. For better or for worse, these folks will become like family. 

These often include but are not limited to: 

  • Food licensing and regulatory agencies. Local city or county public health department that oversees food service businesses such as caterers and any on-site food sales.
  • Local building departments and fire inspectors. Oversee construction permits to ensure everything is up to code and enforce requirements on fire safety.
  • Land use/zoning department. This generally applies to new construction as well as new uses of existing buildings. It governs which areas of the city you can locate your use(s) in, what the building limits and design requirements are, as well as minimum parking, open space, and landscaping standards. There may also be special ordinances that restrict noise, protect the environment, or preserve the historical character of an area.
  • Wastewater treatment agency (if applicable). Some areas have special requirements for how wastewater is monitored and handled at the facility.
  • USDA requirements. USDA rules may apply if you plan to include meat processing or certified allergen-free or organic processing space.
  • Business Licensing Department. This is the local municipal department that issues business licenses. 

Online research is a good way to familiarize yourself with the agencies involved, their rules, and key terminology. Some larger cities have developed licensing guidance for commissary, shared kitchens, and incubator kitchens, but most do not have specific guidance. If you have trouble interpreting how the rules apply to a shared kitchen, you will want to contact the agencies directly. 

Generally speaking, each food business will need to have its own food license to operate in a shared commercial kitchen. Usually, the requirements of these licenses are specific to the food products/ processes of each business. This means your facility has to meet a variety of different requirements for the types of businesses it hosts. 

Also keep in mind that these requirements can change over time. As shared kitchens have become more common, licensing agencies are developing more specific rules to govern them. You will want to monitor the agencies for proposed rule changes during your planning and keep in touch with them during your build-out phase. The 2017 Policy Landscape Report from The Food Corridor and the Guidelines for Shared Use Kitchens from the Association of Food and Drug Officials are both great resources to provide to your regulators.

A patient, collaborative, yet diligent approach will help you work successfully with the various agencies. Share how your project aligns with their goals and will benefit the community so they understand the value of your kitchen. Remember that you will have a long-term relationship with local licensing agencies and it helps to maintain a good rapport with them. Licensing agencies can also be a good source of referrals for your kitchen since they work with unlicensed and food businesses.

The Supplies and Equipment

Storage 

In order to ensure safety and security, kitchens will assign specific units and/or shelves, or provide locking cages. Locking cages can be more expensive to purchase but can reduce theft and/or unsolicited usage of ingredients or products. In addition, secured cages are a new requirement of the FDA’s Food Safety Modernization Act. Consider the need for locking shelves together with your staffing and security planning, since on-site management, cameras, and other monitoring systems can mitigate the risk of theft. 

Kitchen administrators find it useful to apply alphanumeric labeling systems to assign units of storage and provide rolling carts to assist with transporting supplies from storage to the work areas. 

Cold storage is often provided as a walk-in refrigerator because it accommodates a large number of clients in an efficient way. The walk-in is usually divided into assigned shelves or cages. Be sure to check your local licensing requirements regarding cold and dry storage. 

Waste Disposal 

Be sure to check your local codes for waste disposal requirements to make sure your waste management plans will meet the regulations. Requirements often include grease traps, inside collection areas and outside dumpsters for garbage, recycling, and food scrap composting. 

Your waste areas should be separated in a manner that protects food storage, prep areas, and water supplies from contamination. You will need to actively manage them to minimize the potential for waste to become an attractant or breeding places for pests. Establish your waste bin size and pick-up frequency to avoid overflow and extra trips to the dump. 

Check your local municipalities to see what items are recycled, composted (if available), or considered hazardous waste so you can educate your clients on proper segregation of materials. Inquire with your water/wastewater management agency about grease traps, grey water dumping, and wastewater monitoring requirements. 

Be sure to also investigate the condition and capacity of the plumbing and sewer at your site in light of requirements to make sure your construction budget can accommodate any upgrades. Be mindful of your sewer and plumbing cross-connections to ensure they do not get clogged with food waste. 

Security 

Shared kitchens are ideal environments for collaboration and creativity, but their shared nature creates unique client, facility, and equipment security concerns. Facility security is especially important to consider if your kitchen will grant client access 24 hours a day, 7 days a week. 

Make sure you clearly define security policies to ensure safety for your renters and their property. Consider security in your site selection and incorporate security features into the indoor and outdoor facility plans.

Kitchen Entry and Client Activity Tracking 

You will want to research entry and tracking systems when designing your space because they can add both security and efficiency to your operations. Some entry methods provide both entry and tracking features. However, some kitchens prefer to have separate entry and tracking solutions. A low-tech setup might include assigned keys and a paper sign in/ out sheet while an automated system might include digital access through cards, fobs, or pins paired with tracking reports. 

Client activity tracking matters for two reasons. First, these are billable hours your clients are spending in your kitchen, so an inefficient tracking system may result in over- or under-charging your clients. For example, if a client stays beyond their booked time, or to remove a cancellation from the calendar, a tracking system can serve as a backup and an accountability check. Second, if anything ever happened in your kitchen (accident, equipment failure, fire, flooding, etc.), a tracking system will allow you to know who accessed the kitchen at which times of the day or night. 

There are several secure entry/exit solutions for your kitchen, such as providing clients with a physical key, key fob, swipe card, or having a keypad, a CyberLock system, or a lockbox on your door. 

Here are some considerations when choosing a kitchen entry method: 

  • Ease of entry code/key change 
  • Ability to terminate access 
  • Initial and maintenance expense 
  • Lifetime of entry system 
  • A backup option for lost keys/codes 
  • Ease/expense of reset

How can The Kitchen Door and The Food Corridor help you with your Shared Kitchen?

The Food Corridor shared kitchen management software can increase efficiency and automize many of the most troublesome tasks, mainly scheduling, regulatory compliance management, time tracking, and automatic billing when running and renting a commissary kitchen.

Here are some key ways we can help you:

Rental Documents 

Before you can begin signing up kitchen clients, you will need to develop your rental documents.  These include your rental agreement, service agreements (if applicable), special event rental agreements, fee schedules, and acceptance criteria. These agreements will lay the foundation for your operation, and protect both the renter and the owner. In addition, The Food Corridor’s comprehensive Operation’s Manual includes 16 helpful logs and forms that you’ll need in order to make sure owner policies are being followed. 

Attracting Renters

The Kitchen Door is the go-to resource to promote your kitchen to prospective clients. Listings are free and if you use The Food Corridor shared-kitchen management platform, you receive a Premier Listing on their site. Listing with quality photos have been found to be 3x likely to receive quality leads via the site.

As an owner, you will want to budget adequate time and staff resources to field inquiries, give tours, and onboard clients to account for this. Some kitchens find that their market most benefits when clients receive one-on-one support during the business formation and licensing processes. 

Reaching out to prospective clients discovered through your outreach, market research, and networking activities is especially important at this stage. Utilize The Food Corridor’s Marketing Plan to guide your marketing activities and messaging. This plan will attract new entrepreneurs as well as spread the word among peers. Word-of-mouth between entrepreneurs will become a powerful recruitment source over time. Once you have signed up clients, collaborate with them to craft joint press and social media messages that promote both the business and the kitchen to build even more buzz. 

Kitchen Management Software

The Food Corridor shared kitchen management software can increase efficiency and automize many of the most troublesome tasks, mainly scheduling, regulatory compliance management, time tracking, and automatic billing.  The software’s digital sign in and sign out a feature compares actual hours used to the hours booked on the calendar and is tied directly to the renter’s account. This ensures that all hours used in the kitchen are billed. 

Scheduling and booking policies should include how much time a client can book in your kitchen per week or per month, if you allow one-time bookings and/or recurring bookings, how far in advance a client can book, and minimum reservation time (per booking and per month). Much of this will go along with the plan the client is paying for. If you do not allow bookings during certain days or time of day, you can note that in your policies and procedures or at least note that the booking availability may change. The Food Corridor software provides the ability to set off-peak and on-peak hours, set variable hourly rates for different clients, and apply bulk monthly plans. 

Visit The Food Corridor today for all you need to make shared-kitchen usage and management the successful next step for your food business.

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