Renting Out Your Commercial Kitchen – Things to Consider

 

Do you have your own processing facility with free time when production is not happening? Do you manage a commercial kitchen in your community and are looking for opportunities to increase revenue? 

In either of these situations, you might consider renting your kitchen out to food entrepreneurs who need a kitchen to process food products that they plan to sell at farmers’ markets or in retail and food service establishments. 

Renting your licensed commercial space can provide extra income for you, as well as an opportunity for food entrepreneurs to launch and grow their businesses, without needing to invest in their own facility during start-up when capital and cash flow are a challenge. More and more of these arrangements are becoming popular in community commercial kitchens and private licensed facilities, providing a pathway to support food entrepreneurship, economic development, and increase local food security.

If this sounds like an opportunity for your kitchen, here are some things to consider before renting your facility:

a.      Make sure your kitchen has a current Permit to Operate a Food Service Establishment, issued by Manitoba Health, Seniors and Active Living.  This permit is issued on an annual basis and should be posted in a visible location in the kitchen at all times.  A renter who wants to produce food for sale must work in a kitchen that has a current permit.  If your permit is not current, contact a public health inspector at Manitoba Health, Seniors and Active Living.

b.   Consider advertising your kitchen for rent. Manitoba Agriculture and Resource Development has a current online listing of Commercial Kitchens available for rent. You can include your kitchen in the listing at no charge.  Your kitchen does not have to be in the online listing for you to rent it out, but the listing is a great way to get some free marketing.

c.   Consider what equipment in your kitchen will be available to a potential renter?  What days and hours is the kitchen available for rentals?  What are the kitchen sanitation requirements? Is storage available to renters?  Prepare a list of what is available and what is off limits.  Are you prepared to provide training to the renter on how to use this equipment?

d.   Determine what the costs will be to rent your kitchen on an hourly, daily or monthly basis and what damage deposit you will require. 

e.   Develop a rental agreement for renting your kitchen that suits your schedule. It is recommended to have this agreement in writing. This will ensure the rules for renting your kitchen are understood by both parties. The contract agreements may include, but not be limited to; rent fees, liability insurance, times of operations, list of foods to be produced in the kitchen, food safety operations, cleaning and sanitizing, regulatory agency inspection, storage for raw and finished product, clearly defined security policy, cancellation policy, garbage disposal and licenses and permits.

f.       The renter should have their own the procedures and practices in place that are needed to comply with food safety regulatory requirements including those pertaining to employee hygiene and practices, handwashing, use of gloves, safe food sources, safe food temperatures, cross contamination however, the rental agreement should include “Food Safety Operations” with expectations for the cleaning of equipment and sanitization of the space. Preventative measures for COVID-19 in your food processing facility can be found in the Manitoba Agriculture and Resource Development COVID-19 Guidance for the Food Processing Sector document.

g.   Any food processory making food producs for sale in your kitchen is required to have their own permit to operate in your kitchen. Ensure this is in place before you finalize any rental agreement.  You can refer renters to our resource on how to get their own permit.

h.   Request that the food processor have general liability insurance in place to cover them while working in your kitchen. This covers their workers and their product while working in your kitchen.

i.    Some tips to help make the arrangement with renters go as smooth as possible:

1.   Limit operations to only those for which the kitchen has the appropriate equipment, space, and facilities for production.

2.   Maintain a file for each kitchen operator, including but not limited to the rental agreement, processing permit, and scheduled processes.

3.   Set up activity tracking to assure renters are charged accurately for hours spent in your kitchen and to provide a system to track who last accessed your kitchen if anything ever happened such as an accident, equipment failure, fire, flooding, etc.

4.   Identify your rental capacity and not rent beyond the identified capacity - do not overbook, or schedule rentals that cause operators to process with insufficient production time or space.  

j.       For any food businesses who are making a food product to sell to farmers’ markets, or retail and food service establishments, refer them to work with a Business Development Specialist with Manitoba Agriculture and Resource Development who can assist them with growing their food business.  Email mbagrifood@gov.mb.ca to get connected.

A safe, sanitary, secure environment, along with maintaining cooperation among tenants and assuring regulatory compliance and cleanliness will go a long way in operating a successful rental commercial kitchen.

A sample agreement can be found here.