I found a business owner who is willing to rent the use of their commercial kitchen. We have been speaking back and forth and are now discussing the fees. The owner proposed an upfront fee of a few hundred dollars and then an hourly rate of $10 per hour. I have not responded to this suggestion, as I am sitting on it and thinking about the best way to proceed. The hourly fee is definitely affordable. However, my concern is the upfront fee. I dont have a problem paying it. However, I just dont want to put out a few hundred dollars without any guarantees on the continued use of the kitchen after the upfront fee has been paid. I also want to be clear on the term/length of this initial agreement.
Any tips or advice on how I should proceed?
Thanks in advance!
I think it depends on what the upfront fee is. Is it a security deposit of sorts to cover his machines in case they break while you are using them? Is it to protect him in case you don't pay for your time in the kitchen and then take off? Is it refundable if you part on equitable terms if things don't go well with your arrangement? Or is it just an extra 'processing' fee he threw in because he could?
Until you know if it is refundable and what it covers it's hard to know which way to proceed. Also, check the public opinion on the kind of business man he is. There are a few people in my town with whom I would be seriously leery about doing business because they'll take you for everything if they can.
My agreement with the commercial kitchen I rent is a set rent per month then a percentage of each cake that I make. I really didn't want a 'per hour' because of time spent making fondant and gumpaste pieces.
The rent per month covers her 'inconvenience', use of storage space in her kitchen and just paying her for allowing me to use it. That's the way I look at it anyway. The % per cake then hopefully covers the extra water, materials, electricity, etc that I use. The more cakes I make, the more I'm using, so the more she gets.
We actually came up with the rental amount and she readily agreed. We felt it should be fair to her and to us. After we verbally agreed, we took it to our lawyer to have it written up, they reviewed it and then we signed.