Should Your Restaurant Group Have a Commissary Kitchen?

A commissary kitchen is a dedicated kitchen space where a foodservice operator can process, prepare, and store food. While these types of kitchens have always been a feature of the restaurant industry, new trends in food service have led more owners and operators to consider adding them to their business model.

Commissary kitchens may host a wide range of different types of food businesses. Some commissary kitchens may be a central hub for a multi-unit restaurant group, and others may be rented out to external businesses, like food trucks, ghost kitchens, or prepared food companies.

As restaurant owners and operators are exploring new and diverse income streams, the commissary kitchen model is a growing segment of the industry. Let’s explore what a commissary kitchen could mean for your business.

Who uses commissary kitchens?

A commissary kitchen space functions as a commercial kitchen that has the required permits and licenses for food preparation and meets local health and food safety regulations.

Access to this kind of space is a critical component of many different types of food business models. Some food businesses, such as food trucks, caterers, or pop-up restaurants, may not have a full-time physical kitchen space. However, these businesses are usually required by the local health department to operate out of a licensed commercial kitchen.

For these types of businesses, commissary kitchens offer the opportunity to rent shared space that is properly licensed and meets food safety regulations. A food business without access to a full-time kitchen can become a tenant of the facility, renting space according to their needs.

Other commissary kitchens may be shared by a restaurant group that is centralizing aspects of production, perhaps to add in operational efficiencies or expand operations in a new space.

Various types of commissary kitchens

Commissary kitchens may differ based on the business model and local regulations, with varying floor plans, equipment, and food storage areas. But here are three of the main types of commissary kitchens.

Kitchen Shared Among a Restaurant Group’s Close Proximity Locations

Also referred to as a central kitchen, this kind of commissary kitchen is common with multi-unit restaurant groups. It is a shared internal kitchen location that prepares ingredients or menu items that are distributed to different restaurant locations.

Ingredients and processed foods may be stored at the central location and distributed to individual stores as needed. A restaurant group may use a commissary kitchen to make time-consuming ingredients, such as sauces or baked goods, in a consistent, efficient way.

This kind of centralized hub is especially beneficial to restaurants who might not have the capacity or space to produce all ingredients by themselves at each store every day. A central kitchen can also offer labor and food savings (an idea explored down below).

Shared Commercial Kitchen

A shared commercial kitchen is a type of kitchen that is rented out by different companies producing food. As mentioned above, foodservice businesses in most locales are required to operate out of a licensed and up-to-date commercial kitchen. Shared commercial kitchens offer food businesses the opportunity to rent out commercial kitchen space, on an hourly, daily, or monthly shared use agreement.

Frequently, these shared commercial kitchen spaces come with common supplies and equipment, as well as shared costs for services like trash pickup, grease trap maintenance, and utilities. In addition, these commercial kitchens may also offer incubator or mentorship opportunities for young businesses. Overall, a shared commercial kitchen is an important piece of the restaurant ecosystem, providing small food businesses the benefit of accessing a certified kitchen space without signing a lease.

Your Restaurant’s Kitchen

Finally, there is the opportunity for your restaurant’s kitchen to function as a type of commissary kitchen, by renting out space when your restaurant isn’t active.  (See more about this in the next section.)

Using commissary kitchens as an additional revenue stream

Whether you are an owner of a commissary kitchen or considering making an investment in the business, there are many areas you can examine to potentially leverage the commissary kitchen model and turn it into a revenue stream.

Rent Out Your Existing Commissary Kitchen

If you have an existing commissary kitchen for your own restaurant group, there may be opportunities to strategically create additional revenue. For instance, if either a portion of your kitchen, or even the entire facility, is not being used for certain periods of the day, you can consider renting it out to an external vendor.

Food vendors from food trucks to virtual restaurants may be interested in regular commissary space, giving you a predictable income stream.

Rent Out Your Restaurant Kitchen During Non-Operating Hours

Even if you don’t have a commissary kitchen, your restaurant kitchen may still offer opportunities to use it as an income stream by renting it out during non-operating hours. You are paying rent for your kitchen space 24 hours a day, but are you using it for 24 hours a day?

If you can find a foodservice business whose hourly needs complement your restaurant’s schedule, you may have an opportunity to lease out space. While this does come with liability considerations, leasing private kitchen space can provide an alternative source of revenue.

Say your restaurant is only open for breakfast and lunch. The kitchen space, while sitting unused, can be rented to another food business for the evening or overnight. Because a restaurant’s schedule is typically consistent, a shared restaurant kitchen space can attract tenants who have recurring space needs.

Lease a Commercial Kitchen for the Purpose of Generating Income

In examining your local commissary kitchen market, even if your own restaurant business doesn’t currently need a commissary kitchen, you may see the business potential for a shared space.

Especially if you have relationships with smaller food businesses, you can leverage your kitchen experience to serve as a hub of a shared commercial kitchen.

Extend Your Delivery Reach

Finally, with the rapid growth of demand for delivery, you can use a commissary kitchen to fuel expanding your delivery business.

Delivery offers the chance for increased sales, but it can also overburden your restaurant kitchen that is focused on dine-in and takeout orders. A commissary kitchen, organized as a delivery hub, can help meet the growing demand for delivery, expanding your geographic delivery footprint and helping you increase kitchen throughput.

Add a commissary kitchen to improve operational efficiencies

Because it can help increase topline revenue, there are many business uses for a commissary kitchen. However, a commissary kitchen can also help you with the other element critical for your profitability: controlling your expenses.

A commissary kitchen can help improve operational efficiencies in a few different ways, especially if the kitchen management commissary software is fully integrated with your restaurant management platform.

To start, a commissary kitchen can help control food costs by ensuring the consistent and even use of ingredients across your restaurant group. With ingredients or menu items being produced at the same place, with the same equipment, you can help establish quality control for recipes. Rather than relying on individual stores that may use different processes, moving production into a centralized location can help standardize preparation and portioning.

A commissary location can also help you condense your deliveries of inventory, resulting in potential volume discounts with vendors. A centralized location for prep can be integrated with your inventory management system, allowing you to streamline ordering, fulfillment, and in-person inventory tracking.

In addition to helping control food costs, a central commissary kitchen can help make labor costs more efficient. By scaling up prep, you can gain efficiencies in labor, allowing you to optimize labor hours and even simplify how you do training. Team members in the central kitchen can specialize and be more productive in prep, and staff at individual restaurant locations can focus on execution and customer service.

With consistent recipes, centralized deliveries, labor savings, and more, a commissary kitchen can help you find cost savings in your operations.

Conclusion

A commissary kitchen may provide a new opportunity for your restaurant group to potentially gain efficiencies and alternative streams of income. As your restaurant group examines business development strategies, a commissary kitchen offers the new possibility of boosting revenue and streamlining operations.

If you would like to easily track revenue data and gain insight into your operations to increase efficiency and boost profits, consider a comprehensive, restaurant-specific management solution. Restaurant365 is an all-in-one restaurant management system incorporating reporting tools, restaurant accounting softwarerestaurant operations softwareinventory management softwarepayroll + HR software, and scheduling software into a cloud-based platform that’s fully integrated with your POS system, as well as to your food and beverage vendors, and bank.

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