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How Much Does it Cost to Rent a Commercial Kitchen? (2024 Costs)

Marcel DeerAuthor

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People’s eating habits are changing. About 72% of millennials and 66% of Gen Z’s feel that food delivery is an essential part of their lifestyles. In fact, 80% of these young adults would even buy take-home meal kits from their favorite restaurants if they had the chance. It’s clear that there’s a huge demand for prepared food, whether from traditional restaurants or from cloud kitchens set up for delivery only.

If you’re looking to get into the game, you’ll need a kitchen to get you started. If you’re looking to do catering work, film a cooking show, do a kitchen photo shoot, make a cloud kitchen business, or give customers an exclusive pop-up experience, choosing to rent a commercial kitchen can be a fast and cost-efficient option to consider.

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What is a Commercial Kitchen? 

A commercial kitchen is the sort of kitchen you’d expect to find in a restaurant, bakery, or other food-selling facility. You can find them as independent locations set up to be used by renters – these are often called commissary kitchens. However, it’s sometimes also possible to rent the kitchen of a space previously used as a restaurant. Some currently operated restaurants might also rent their kitchens out during the hours when they’re not in use.

These kitchens are different from your average home kitchen in many important ways. They’re definitely bigger and better laid out for efficient workflow and improved safety. They include industrial-quality equipment designed for continuous use and high-volume cooking. They also include storage and cleaning spaces that are appropriate for the volume of food output that can be produced in them. Finally, these kitchens should be easy to clean and easy to sanitize, so that you can produce food of necessarily high quality. 

Renting a commercial kitchen can be a massive cost saver compared to setting up your own kitchen or renting a whole restaurant. It’s also important that when you rent a commercial kitchen, it has been previously inspected and certified so that when you set up your enterprise in one, it’s easy to get started as soon as possible.

How Much Does it Cost to Rent a Commercial Kitchen?

If you want to rent a commercial kitchen, you’re probably looking at an average price of $15-45/hour

However, this number can climb with bigger, better-equipped kitchens. The price can also go way up in competitive locations like New York and L.A., where kitchens in the most desirable areas go for hundreds and even thousands of dollars per hour. On the other hand, you can get better deals by arranging long-term rental deals.

But that’s just rent... 

In some cases, that’s all you’ll need to pay, while in others, there will be ancillary costs like utilities, insurance, deposit, and permits to consider, especially if you’re renting on a long-term basis.

You might not be able to plan for all your costs from the start, but at least thinking about these possible costs can help you pad out your budget a bit.

1. Base Rent

The rental cost primarily consists of a base fee or hourly rate, depending on the terms offered by the kitchen provider. This fee usually accounts for factors like location and amenities provided, and you should expect to pay more for kitchens in bigger cities and with more equipment and space.

2. Membership fees

Many commissary kitchens charge a membership fee on top of hourly rent. This membership fee is part of their vetting system and also allows you to book your time slots. It may represent a monthly or even annual cost, but probably won’t be a major cost for your business.

3. Security Deposit

A commercial kitchen includes lots of valuable equipment that represents a major investment. To protect themselves, kitchen owners may charge a security deposit of $100-200. They’ll return this to you after your rental period is up but will deduct the costs of any damages from the deposit as necessary.

4. Utilities 

Whether you will need to pay extra fees for utilities like water, gas, electricity, and ventilation depends on your rental agreement. In many cases, these costs are included in the rental fee, but not always. Be sure you find out if utilities are extra before you make your decision to rent a commercial kitchen.

5.  Insurance

While a security deposit can protect the landlord, you’ll likely need insurance to protect yourself and the business that you’re running. This can include comprehensive liability insurance that will cover you if there’s a kitchen fire or if one of your employees is hurt on the job. Insurance costs vary depending on the type of business you’re running and whether or not you have employees. While this is separate from the rent, you will likely still need to show a certificate of insurance (COI) to any landlord before they sign any agreement with you.

6.  Licensing and Permits

Depending on local regulations, you may need to acquire the necessary licenses and permits before operating your business in a rented commercial kitchen. These licenses will almost certainly include a food handling permit and other commonly needed certifications from health departments and fire safety inspections. It’s not possible to give you a standard cost for these permits since they vary significantly based on location, but be aware that these might be necessary for operating any food-based business, and plan accordingly.

7.  Maintenance and Repairs

Alongside the rent, you may need to anticipate expenses related to maintaining and repairing kitchen equipment and facilities. While kitchen providers typically handle major repairs, minor maintenance tasks could fall under the renter's responsibility.

8. Equipment

When you rent a commercial kitchen, you might expect that it will have absolutely everything you need to do your work. However, if you need something specialized, you may find that no commissary kitchens have this piece of equipment, and you might have to buy it yourself. You might also bring in some of your own appliances if they are ultra-efficient. They might represent an extra cost but end up saving you money on electricity in the long run.

Optimizing Costs to Rent a Commercial Kitchen

While there are a lot of costs to consider when you rent a commercial kitchen, there are also strategies entrepreneurs can employ to optimize expenses. In any case, renting a commercial kitchen is almost always going to be more affordable than setting up your own kitchen, at least in the short term. Here are some of the ways you can lighten the load even further.

1. Use Shared Kitchens

If you don’t need a whole big kitchen to yourself, or if you don’t need the kitchen all the time, you can consider joining a shared commercial kitchen where multiple businesses share the space and equipment. This arrangement helps distribute the costs, making it more affordable for individual entrepreneurs. You might share the space at the same time as others or book in time slots to have the whole kitchen for your own use.

2. Efficient Time Management

A lot of commissary kitchens have different rental prices based on the time of day you rent them. Peak hours are typically just before noon and just before 5:00 p.m. because these are the perfect prep times for lunch and dinner services. If you can, avoid these prime time hours so you don’t have to pay a premium for your use. If there’s any way to increase your efficiency, you can also save money by renting the space for fewer hours. That can also help keep your costs in check.

3. Equipment Efficiency

It’s not only your work processes that can become more efficient. The equipment you use may also help you save money. Rather than just using the appliances provided by the rental kitchen, consider investing in energy-efficient equipment to help reduce utility costs. If you conduct thorough research, you can find appliances that strike a balance between cost-effectiveness and performance.

4. Negotiate Lease Terms

It’s almost always going to save you money if you can arrange to rent for a longer period rather than just hour by hour. If you find a suitable rental kitchen, you can engage in negotiations with kitchen providers regarding lease terms, including rental prices, utilities, and other additional services. It's always worth exploring the possibility of securing a better deal so you can keep costs down and streamline your business.

Get Started with a Commercial Kitchen

While a base rent of $15-45 per hour is common, remember that there are always other costs to consider when you’re making your budget. You might need to also pay for permits, insurance, membership dues, specialized equipment, and more. At the same time, you can keep your costs down by renting more long-term, avoiding pricey prime-time hours, streamlining your processes, and even sharing a space with other users.

But when you’re just starting out in the food industry or doing work that’s sporadic or temporary, it makes a lot of sense to rent a commercial kitchen. So, look around for options in your area and calculate your budget to see how renting can help you keep costs down while providing you with the space and equipment you need to make great food.

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