When Commissary Kitchens Are the Right Answer for Restaurant Owners
Do you have more than one restaurant location or a restaurant with a really strong catering business or retail outlet? Have you been wondering if a commissary kitchen would be the right next move for you? I have some hard and fast rules to help you answer when it might be a good decision to open a commissary kitchen.
A commissary kitchen, 90% of the time, is not a good idea if you only have a single restaurant location, even if you have a strong catering business. Here are three key things to keep in mind.
- A commissary kitchen can be a good idea if you're looking to ensure consistency in your soups, sauces, side dishes, dressings, desserts and much more in multiple locations. No matter where somebody gets your product, this consistency makes sure it's all exactly the same.
- Prep labor is killing you in each of your kitchens, especially when your team is making the same items, e.g., sauces and desserts, in each one of your locations’ kitchens. So by consolidating your labor, you're going to free up labor dollars in each one of those businesses.
- You also have a strong catering business or retail outlet where the demand clearly strains your restaurant kitchen in storage, equipment and just general space.
So as you grow your business, if you can't keep up with production in your current space, a commissary may be necessary. Understand that you really need to make sure the commissary is producing a lot of your products right to make it really worthwhile. You can’t just make a sauce and a dough ball. It's not just your specialty desserts. It has to do a ton of the prep. For example, if cutting brussel sprouts takes a ton of your labor time, doing it in one spot and then shipping it off to the other locations is more efficient and saves time. So you get efficiencies by doing it, plus you get consistency.
Now, if you're going to look at a commissary kitchen, it comes with a lot of overhead. This is why it's something you've got to really think about before you pull the trigger on it. You're going to pay a kitchen leader. You need a chef or a kitchen manager, some lead in that kitchen to make sure that they're pulling in all the orders from each one of the locations. They're assessing how prep is going to look and ordering properly. It is critical to have a good kitchen leader for production.
If you're going to have a commissary, you're also going to have full time kitchen people. In the restaurants, you can ratchet hours up and down based on sales. If your sales start going down, we can't trim those hours from our commissary because with their kind of production, they're fixed on creating product. It's going to be very difficult to trim hours because you need them, making volumes very important. That's why I said you need to have multiple locations, really strong catering, retail demand must be high so you can keep these people working full time in that kitchen.
You can have some part-time, the truth of the matter is, this becomes a full-time operation. You have rent, utilities, insurance, refrigerated vans to move the product from one place to another. A commissary can come with a lot of expenses.
Plus, to make all this work, you're going to need software. That means you're going to need some sort of recipe costing card software, cost of goods sold software for each one of the locations so you can update your pricing and know that every recipe is up to date so you can account for all costs of all recipes in all locations.
There are additional expenses, and maybe in a future video I can talk about how you can transfer or make sure each one of the revenue centers pays for their share of all those operating costs of the commissary kitchen, but importantly, make sure that you're in a position where a commissary kitchen makes sense, that you've got enough volumes and you'll see enough labor savings to make that call.
If you would like to learn how to own a restaurant that doesn't depend on you being in it to be successful, sign up for my free video course that teaches you three key principles to running a successful restaurant. If you're ready right now to make some serious changes in your restaurant, you can also book a 60-minute call with me where we talk about your challenges and figure out exactly what is holding you back from having a restaurant that doesn’t depend on you being in it to be successful.
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