Kitchen/Catering Space

I've been looking at Craigslist for the past couple of months for kitchen/catering spaces and haven't really found anything. I'm not looking to relocate necessarily tomorrow, but just weighing my options right now. Soon will be plateauing with how much product we can produce, and eventually will have to expand from where we're currently at. Any help would be very much appreciated, thanks!

Stan,
We have a 1200 square foot shared use commercial kitchen that is available for rent by the hour. You can check it out at: http://www.kytchen.com/

Cheers,

John Mudd

Very cool, Mr. Mudd. Thank you for joining the conversation to share this, and your website is incredibly informative. With the growing popularity in this sector of the prepared food industry, I would think that this type of business model is one that we'll see a LOT more of in the near future, but I don't think I've seen anything like this in such an organized and affordable format before, so I wish you great success for being a pioneer. Well done!

I was looking to start one of these up myself a few months back but couldn't make the numbers work without addtional investors and that didn't make much monetary sense to me either.

One thing I am curious about, and I'm hoping that John will answer this.
I put a lot of research into my idea and I never saw where any of the existing rental kitchens in other cities I was getting information from, that required proof of a 6 figure liablity insurance policy from the renters. Almost all of them did require hefty deposits though.

My reasoning is this, as the owner of the equipment and rental space, I'm certain you have your own insurance to cover your property and liablity if say someone hurts themselves in your place. I'm wondering why the addtional rider would be required from your renters? Is this some local thing that I wasn't made aware of? Couldn't you just simply make your renters sign a waiver releasing you of any liablity incurred by their use of their product and your equipment instead (ie, food poisioning, allergic reactions, whatever)? That was what I was planning on doing if my plan worked out.
Fortunately, as an ACF-KY member, the local chapter carries a liablity policy for our dues paying members. If I have booze at my catered events, I just hire bartenders from McClarty as they cover the liablity of serving the liquor.
The big reason I'm asking is that it dosen't make much financial sense for someone like myself (or others I'm assuming) to carry that extra rider on my homeowners policy if I only do a few events on the side a year for friends and referrals where I'm only looking to make an extra few hundred bucks per event for myself. I checked with my insurance guy and getting one was like an extra $1500. My house and car insurance combined isn't even that high.

That being said, I'm glad to see that someone has taken this great idea and ran with it. I lost my side job catering space when the Frymaster/Manitowoc Test Kitchen shut down a few months back and although I couldn't get my project in that space to come to light, I am glad to see that there is now another place to work out of that's close to my J-Town home!
P.S. You should add some pictures of your kitchen to your website.

Dan, you need a different insurance agent. I carry that type of policy and I pay a small fraction of the amount mentioned. Additional insured riders have always been free once I have the base policy.

Leah is correct about the rates. Few insurance agents charge fees for additional insured, and I encourage my clients both at Kytchen and the farmers markets to share information so that they can identify great rates.

A question to Leah and John; your insurance agent will provide you a 1 million dollar lilability policy for free or very little cost? How do they do that? Last time I checked with my insurance (Nationwide) who Ive been a policy holder with for over 30 years, a 1 million dollar policy was about what Dan mentioned, $1500 a year.

I think a lot of it depends on what your base coverage is but I certainly agree with Leah and John in that most times it's not very expensive. My wife and I both have a $1,000,000 liability policy and for both of them the annual cost is about $120.

Mark
Maybe im not understanding something. Im talking about a business liability policy and not a rider on my homeowners policy. I operated a small S corp, a complete different entity than my personal insurance. I guess this is getting off topic but knowing what's what may save someone some money or a huge headache. I learned this the hard way. My oldest son delivered pizza's for a while. He was involved in and accident on a delivery. A total of about $7k in damage to both cars, his fault. I called our claim agent to report. A few days later they contacted me to say the claim was denied because he was using the car for business. I assumed our regular insurance would cover the car for any accident. WRONG!! We should of had a separate policy that covered him as a business. It my expierence that a rider on your personal policy wont cover things if you are operating a business. Now I've got myself confused

[Robin Garr]

Maybe im not understanding something. Im talking about a business liability policy and not a rider on my homeowners policy.

Totally agree. Even if you have a home business, and even if it's very small, there are many, many advantages in separating its corporate status from your personal affairs. This is just one example.

It's sad how many well-intended small businesses go down because the owners don't know this kind of thing, and nobody told them. A little money invested in competent advice up front is money very well spent, especially if you're taking on a business plan with tight margins.

Im still paying for it 3 years later. Anyway it is a good thing that someone has opened up a kitchen like this. It will help people get off the ground while containing costs. We are living in Austin TX until end of June and there are several of these kitchens for rent . Its a big business given the large number of food trucks in town.

I am a C corp.
My vehicle has Commercial insurance at just less than $80 per month.
I have a separate 1 mill business liability policy on the C Corp that runs less than $400 a year.
Getting a n "Also Insured" declaration is the free part.

Want the name of my insurance agent?

I think that you may have missed my point. I'm not going to go out and pay $80-$100 a month for a seperate commercial policy for the 4 or 5 things a year I might do under the table for a little extra pocket money. I'm certainly not claiming the revenue from it because I usually don't make more than $600 a year doing it.
It wouldn't make financial sense for me to have it because I'm not trying to have another full time job or start a business.
Most of what I cater is in someones private home anyway (where the customer's homeowner's policy should suffice) or I might do the very occasional wedding where almost all of the facility managers know who I am through what I do for my day job. I feel confident enough to take my chances without it. That's why I only work with referrals and I'm very selective about whether I take the event or not. 99% of what I do on the side, I can work out of my home kitchen.
Although I did cater one large wedding last October (400 people) for one of my close friends as a favor and they had to purchase an event policy because they hosted it at Mellwood and they require it. That's why I know how much it would have cost me to get a rider attached to my homeowner's policy. They have some strange polices for a rental facility that no place else I have worked with has anyway.

That's the main reason why occasionally, I do need a space to work out of where I'll need big convection ovens and commercial grade equipment to do the job right. I have absolutley no problem with paying rental fees and a security deposit for use of the rental kitchen's equipment, but I can't fiscally justify the need for the insurance, so Kytchen probably wont have me as a customer. Which is too bad as it's a stones throw from my home.

Unfortunately, I lost my closely guarded secret space that I worked out of for free that didn't require all of this insurance nonsense.

The event insurance policy requirement at Mellwood requires a policy that costs $150-$199 if purchased as a separate policy, and often less if added as a single date rider on a comprehensive home policy. I know both Mellwood and the insurance company that provides most of the policies quite well. It makes a lot of sense for weddings and events where unfortunately a lot of guests regard the occasion as a great evening of free food and (lots of free) drink. Mellwood wants to be able to be second in line for a lawsuit, should someone at the reception get impaired and fall down the steps or worse. The hosts would be first in line for the suit. It's a very smart business policy.

I talk to a lot of people wanting to get into the wedding cake biz. They are all pretty horrified at the costs involved for insurance, professional quality equipment and licensing. But the bottom line is, all it takes is one lawsuit and the cost of insurance looks pretty reasonable.