Contracting out/leasing the kitchen?

[NicksPizza]

Does anyone currently lease out/contract their kitchen to a third party when it is not in use? I have been approached by a person looking to bake cupcakes for their business on third shift when we would be certainly closed. I know there are issues to cover, and I am checking into them.

What I really need from this thread is to hear from people who have or are currently doing it. How much to charge, insurance demands of other person, and inspection after use (for damages and theft) issues would be useful to hear from someone with this experience.

 

[Kris]

Don’t have any experience with this but wow might be a good opportunity.

 

[system]

Nick I would give my insurance agent a call first and see how this is going to reflect upon your rates. You now have other people using your equipment and location. The liability for injury with the mixer or ovens… your business burning to the ground? There are so many possible problems that could come up and if it happens…who’s to say they do not come after you when someone gets injured with your “defective” equipment. You know how people think and that will be theire first route. He is the owner… he’s got the deep pockets. I do not think you will make enough off of this venture to make it worth the risk. Even with them signing off all liability you will still be involved if osha shows up after a major injury. Personally I see the $ signs also, but I would think twice.

 

[indie_pizza]

I would think you could get a pretty simple waiver to release you from injury concerns.

If I remember correctly, the member that owns Golden Knight’s Pizza (can’t think of his screen name right now) rents out a kitchen from a bar. I would bet he would have some relevant information to this.

 

[Tom_Lehmann]

I don’t know much about the details, but this is a fairly common practice in the retail baking industry and it seems to work out well for all parties. The one thing that the bakers all insist upon is that they have one of their bakers in the shop at all times to assist, set-up and operate equipment.
Tom Lehmann/The Dough Doctor

 

[snowman]

Nick,

I rented a kitchen from a bar for a while. Unfortunately, there’s really no useful information I can provide since it was a one-man operation, and more of a gentlemen’s agreement. Because I had mostly exclusive use of the kitchen, it was run as a separate business and such.

Now that I’ve provided no useful information, I’ll weigh in with my thoughts if I were in your shoes.

1. Make sure the health department distinguishes between the entities – nothing they do can get you a bad grade on inspections, etc. Likewise, if you get red-flagged, would they be out of business (and thus looking for damages)?
2. Insist on the level of clean that must be maintained. My bar owner would often turn the lights out and go home, coming in to a mess (that he already knew was there – it was his mess). I can see the baker having a rough night and just letting things slide, but with another business there, it would directly impact your operations.
3. Get a deposit that keeps you from getting “stuck” in the case that they leave town in the middle of the night .
4. Beware of your utility costs. Obviously, they’ll be higher, so figure that in the cost.