Grocery Store Wants To Rent Me Their Bakery...not Cafe Lady!

Business By CakeDiva73 Updated 20 Nov 2009 , 2:37am by rosiecast

CakeDiva73 Posted 31 Oct 2009 , 6:42am
post #1 of 88

So anyone who has followed my cafe drama (so nice of you to stick around!) knows I am at my wits end. I know in my gut that cafe lady is a hot mess and even though she called to set up a meeting with me Monday....(yes, you heard me right!) I knew it would never work. I moped around for a couple days feeling sorry for myself and then started making phone calls.

Local grocery store (good sized) has a vacant bakery. Heard about it thru a friend who's mom works there. Says they have had their baked goods shipped in from a sister-store for more then 2 years and may want to rent out kitchen, said they have done it in the past. I called the corporate office guy and he called me back today.

Very nice, said the bakery is available, doesn't feel like there is enough foot traffic to actually justify me 'maning the counter' (so to speak) and that if I wanted to rent it, I could use the kitchen and anything I want to sell can be put out on the shelves, they will give me a special code and whatever sells will be rung up on a sep ledger, a check cut twice a month.

He said he would rent it cheap, I said how cheap, he said $500 month...... I have NO CLUE what to do. I was originally looking for kitchen rental in off hours (hoping for unde $200/ month) but this seems like it may be better....scary, but better. icon_smile.gif

My husband and I went down today to take a peek, huge kitchen, decent store, totally remodeled shopping center, 5 miles from my house. The bakery is powered up and up to date with the license but needs to be cleaned up, has a full size oven that you can roll a bakers rack into to bake tons of cookies at once in addition to regular commercial oven, multiple fridges, etc. Possible Hobart, they have to check and see if it's being used.

Right now, since the bakery is out of use, they have bottled water stacked in front of the bakery so it isn't visible. The corporate guy I called said to go take a look and talk to the store mgr, who was on lunch when we came down so an employee let us do a walk thru and I am supposed to call/meet store mgr tomorrow morning.

I am not clear yet on what to know/ask for.... I think he is saying I can rent the entire bakery and stock the shelves, (not necessarily the electrically powered cases) with product. I know no one else is using it but I have no idea if this is the steal it seems like or another quicksand trap with pitfalls I am too new to see.

At that price, having a virtual storefront, it seems very cheap. Even without the cases, I am fairly sure that I could put display cakes, brochures, business cards, in addition to bouquets, cookies, truffles, standard, cakes etc. Does anyone have advice? Should I pursue it and clarify what kind of exposure I would get, kind of out of my depth her but don't want to blow what could be a really great chance. What should I be looking for or asking about?

Thanks in advance......

87 replies
Normita Posted 31 Oct 2009 , 7:03am
post #2 of 88

I really dont know what to tell you, since I dont have my own bakery and all. But you have to weigh out everything. Do you think that you are going to be making enough cakes to cover the rent and also leave you with a nice profit?? You make some nice cakes and cookies.....just go with your gut feeling!! Hopefully, other CC'ers who are more experienced will chime in icon_smile.gif I was looking at your website and was shocked to see that you are my neighbor!! I am from the Modesto area and just recently moved to Stockton. Its always nice to know other CC'ers who live nearby!! Hey if you decide to go along with the bakery and all....and you need help...give me a call LOL!! Where is this bakery located at, if you dont mind me asking?

peg818 Posted 31 Oct 2009 , 8:55am
post #3 of 88

that seems dirt cheap to me. I would definitely give it serious thought. The biggest thing for me would be how long of a lease period do the want. The ringing on another code sounds great, but be prepared some stuff is likely to get rung up wrong and you probably won't have any way of proving it. Is it a high end grocery store that would provide the foot traffic that you need to pay the rent? And you really need to figure how many cakes do you need to make to just break even. Do you want to work that long for free, cause that is what you are going to have to do. And then there is your family how much time are they willing to have you gone everyday.

PieceofCakeAZ Posted 31 Oct 2009 , 9:11am
post #4 of 88

I have my own shop and I would still jump all over that! $500 and it's all yours, all their equipment to use, a huge kitchen, utilities, plus the store is providing foot traffic and allowing your to sell your stuff while you grow your non retail custom cake business. Seriously...what is the catch? Either there is one or this is a serious no brainer for someone looking to take their biz to the next level. It sounds like an amazing opportunity. The only reason I would be hesitant is because it really sounds too good to be true, but I would still jump on it and laugh manically every time I thought about what I had pulled off. icon_biggrin.gif

The only potential downside I could see with the limited information I have is that should you start meeting with potential clients there... will they expect grocery store type pricing on your custom cakes because you are located within a grocery store? Obviously there are ways to get around it with the right marketing approach if it comes up, but it's a consideration if you are conducting meetings there.

Best of luck!

Cakenicing4u Posted 31 Oct 2009 , 9:52am
post #5 of 88

I would find out how they plan to charge you for the "rest of the story"....Once you start firing up that equipment, electric goes up-- who pays? Start doing dishes-more water-- who pays? Time to take out the trash-- who pays?? For $500, I would jump on it too.... Just make sure you look at a generic 'proposal to lease' online and get ideas together on who pays for what... If the AC shuts down... will you have to pay a portion? will it be pro-rated to a percentage? if the oven's don't work and you don't own them, who pays? there's a lot of things to nail down... but if they are truly offering it to you for $500 and no other overhead.... TAKE IT!

mim1106 Posted 31 Oct 2009 , 11:05am
post #6 of 88

I would jump at it, but also agree with everyone else....read the fine print of the contract!

cylstrial Posted 31 Oct 2009 , 1:06pm
post #7 of 88

It sounds like a great opportunity - but make you sure you find out about the water, air, electricity, etc. You don't want to be on the hook for any of that.

But really $500 is cheap - especially considering that you don't have to buy any of the expensive kitchen equipment.

-K8memphis Posted 31 Oct 2009 , 1:15pm
post #8 of 88

I mean if a grocery store can't hold up their own bakery wow.

I've been thinking about this--wow.

We had a big gorcery store close & a furniture store move in that space--I always wanted to rent the bakery space out--but...it was all covered in furniture icon_biggrin.gif

What an opportunity.

What condition is the store in financially?
How could the owners or the corporate office if it is a chain allow an outsider to take over that department?

I mean it's either genius or disaster huh. The lady or the tiger.

You gotta crank it out to cover $500 though. More than you originally wanted to do.

cutthecake Posted 31 Oct 2009 , 1:48pm
post #9 of 88

I'd get an accountant and a lawyer to look over EVERYTHING --financials, contracts, etc. Make sure everything you discuss with corporate and store management is put in writing first. Before you sign anything. Eliminate all the "he said" stuff.
It (the $500) sounds like good deal because you don't have to buy any heavy duty equipment. But all the issues raised here (repairs to equipment; cost of utilities; pricing/payment, etc.) need to be addressed. In writing.
Also, what about store hours? Do you have to keep their hours, or will you be free to come and go on your own schedule? That would require utilities to be used when the store is closed. Who pays for that?

If I got "all the right answers" from the professionals, I'd say, "Goodbye, cafe lady."

cakesdivine Posted 31 Oct 2009 , 2:09pm
post #10 of 88

I would make sure you know exactly how much you can do with the space. If you decorate it and let others know you are a separate entity you will probably do very well. Just don't get trapped into offering grocery store prices (which might be what people will expect since you are inside the store) for custom cakes. But you might want to offer some everyday cakes on the cheap for those impulse buyers. Just know that if you keep stock available as non custom stuff you will have product loss, you can't avoid it. So decide too if you want to keep products stocked and know that some will end up in the garbage, or go custom by order only, each has it's positives and negatives.

indydebi Posted 31 Oct 2009 , 2:27pm
post #11 of 88

Darlin' I pay $2000/month and I had to buy my own equipment ($50K+) and pay my own utilities! As you move forward, you are already aware that as a business owner, your #1 job is market and sell, market and sell, market and sell. You already know that you can't sit back and wait for the orders to come to you. Having to pay rent and utilities is a big motivator.

If I lived close to you, I'd be racing you down there to latch on to this!

caseyhayes Posted 31 Oct 2009 , 2:48pm
post #12 of 88

I say go for!!!!! Indydebi I love your picture!

kakeladi Posted 31 Oct 2009 , 2:52pm
post #13 of 88

Really think over everything already said.
Next, are you *REALLY!!* ready to put in the *long hours of work* that will be necessary for this type of arrangement? It will mean working for free for some time - hardly any business makes money the 1st couple to 5 years.
Yes, do find out the financial condition of the store. If they are near bankruptcy no use getting your hopes and dreams up only to have them dashed when you arrive some day to find the place locked up and all of YOUR equipment in there. Yes, you will have some of your own equipment - pans, tips, ingredients (you *just* stocked up yesterday) etc, etc. in there.
Give it lots of long, hard thought.

littlecake Posted 31 Oct 2009 , 5:51pm
post #14 of 88

GO GET IT!!!!!!!!!!!!!

HOLY CATS!!!

i do it in a heartbeat....it seems like it would be great...plus you get the foot traffic from the store.

it isn't that odd that a store would close the bakery, i've worked at lotsa ib store bakeries...after they pay labor and throw out the dated stuff, they really don't make nearly as much as the deli or meat dept....it's more of a service for the customer, than a money maker.

dude!...you will be saving a fortune...it cost me 28 K to get started up.

littlecake Posted 31 Oct 2009 , 5:57pm
post #15 of 88

geeze at 500 a month, you'd wouldn't have to sell but 125 a week for everything...it sounds great to me.

Spuddysmom Posted 31 Oct 2009 , 6:16pm
post #16 of 88

Sounds like an unbelievable good deal. $500 a month for rent and that is it??? There is no way I can find anything like that in my area - and I've done a lot of looking! You are serious about creating a business, aren't you? And after all the trouble you had with your former arrangement this seems perfect - what is the catch?

littlecake Posted 31 Oct 2009 , 6:36pm
post #17 of 88

after the 500 bucks and supplies, the rest would be yours...you won't have a big bank note to pay...no water or electric or personal property tax..just phone....i think it's amazing...you can make 125 in a hour or 2.

are the bakery racks and mixer still in there?...the last place i worked we had a 60 and a 20 qt.

around here we got starbucks in target...mcdonalds in walmart...and lotsa other little shops insde big ones...i don't think it would be hard for peeps to understand its separate.

i hate to admit..i'm a little jealous...imagine the time saved not having to check each and every person out...

cownsj Posted 31 Oct 2009 , 7:08pm
post #18 of 88

Just when you thought all was lost with the cafe, here this pops up. Looks like someone is looking over your shoulder. But you are still expected to use your head and find out all the facts, like others have said, and put together a deal that will still work for you. I would LOVE an opportunity like that, but take the time necessary, keep the adrenaline under control, and put it together the right way. I think it will work out great for you.

-K8memphis Posted 31 Oct 2009 , 7:23pm
post #19 of 88

This spells e.m.p.l.o.y.e.e.s. huh

HarleyDee Posted 31 Oct 2009 , 7:50pm
post #20 of 88

Holy moly, wish I was close, I'd rent it, lol icon_smile.gif It sounds like a great offer, but I agree with everyone. You're going to have to have people look over all the details. Sit down, figure up the math and see if it will be worth it to you.

CakeDiva73 Posted 31 Oct 2009 , 8:50pm
post #21 of 88

I know there is alot to be hammered out as the basic details I got from the corporate manager were brief. This grocery store is not nation wide, I think they have maybe 6 or 7 stores I don't think it's that big corporate-wise. He said this store is not exactly a huge money maker for them but they feel like it will come back, which is why they haven't closed. He did say the landlord tried to raise the rent a few months back and they threatened to walk so he changed his mind.

Apparently in March, their lease is up for renewal and if the landlord tries to raise the rent again, they will again threaten to walk. Corp guy feels like in this economy with all the closed businesses and spaces for rent the guy would be a total moron to do it again but who knows. They have been there for years - like 30 or so. But it is a concern of mine. When I spoke to my cousin who works in retail, he said the sad truth was things like that are unfortunately always an option but at least this guy was forthcoming about it. On a side note, they are the only good size grocery store in the area........

The grocery store is neither high nor low end - kind of in the middle. Nicer then I had anticipated. Apparently they ran the numbers and it was cheaper for them to have the bakery stuff delivered from their other store and run the deli in the back but close the bakery so they must not have been getting a great deal of bakery business, for whatever reason.

UPDATE: Just called and spoke with the store mgr (who I missed yesterday) said he heard I had come and that he was surprised that corporate wanted to rent it. His voice sounded a bit reserved at first and he asked what I had in mind, I explained I did custom cakes, truffles, decorated cookies, etc and he then sounded rather pleased - not sure what he expected.

I told him I just wanted to check in with him and that I would call corporate on Mon, he gave me the # and said to call now and leave a message - said to talk to corp so we could go forward, etc. I mentioned I wasn't sure about the water stacked in the front of the cases and said I had some product but LOTS of cake displays (dummies) etc if they wanted me to use it, he said he can't wait for them to remove the water bottles because it's tacky so he will encourage me to decorate it, etc.

So I have a long, long list of questions because after reading the reactions, I am waiting for the other foot to drop.....for him to say 'Oh yeah, that was $500 a week, lol" CRIPES...... they sound like nice people who just want a good person/product in the space, I am finalizing a list of things to cover:

Signage
Utilites
Lease length
Hours of operation
So many other things I can't even think!

My hub just walked in and I have to start the kids on their Halloween stuff but will check back. Again, thank you so much!!

aquamom Posted 31 Oct 2009 , 9:06pm
post #22 of 88

I don't have any business advice--I just wanted to wish you all the best. Keep your eyes open and keep reaching for the dream

kakethings Posted 31 Oct 2009 , 9:43pm
post #23 of 88
Quote:
Originally Posted by CakeDiva73

I know there is alot to be hammered out as the basic details I got from the corporate manager were brief. This grocery store is not nation wide, I think they have maybe 6 or 7 stores I don't think it's that big corporate-wise. He said this store is not exactly a huge money maker for them but they feel like it will come back, which is why they haven't closed. He did say the landlord tried to raise the rent a few months back and they threatened to walk so he changed his mind.

Apparently in March, their lease is up for renewal and if the landlord tries to raise the rent again, they will again threaten to walk. Corp guy feels like in this economy with all the closed businesses and spaces for rent the guy would be a total moron to do it again but who knows. They have been there for years - like 30 or so. But it is a concern of mine. When I spoke to my cousin who works in retail, he said the sad truth was things like that are unfortunately always an option but at least this guy was forthcoming about it. On a side note, they are the only good size grocery store in the area........

The grocery store is neither high nor low end - kind of in the middle. Nicer then I had anticipated. Apparently they ran the numbers and it was cheaper for them to have the bakery stuff delivered from their other store and run the deli in the back but close the bakery so they must not have been getting a great deal of bakery business, for whatever reason.

UPDATE: Just called and spoke with the store mgr (who I missed yesterday) said he heard I had come and that he was surprised that corporate wanted to rent it. His voice sounded a bit reserved at first and he asked what I had in mind, I explained I did custom cakes, truffles, decorated cookies, etc and he then sounded rather pleased - not sure what he expected.

I told him I just wanted to check in with him and that I would call corporate on Mon, he gave me the # and said to call now and leave a message - said to talk to corp so we could go forward, etc. I mentioned I wasn't sure about the water stacked in the front of the cases and said I had some product but LOTS of cake displays (dummies) etc if they wanted me to use it, he said he can't wait for them to remove the water bottles because it's tacky so he will encourage me to decorate it, etc.

So I have a long, long list of questions because after reading the reactions, I am waiting for the other foot to drop.....for him to say 'Oh yeah, that was $500 a week, lol" CRIPES...... they sound like nice people who just want a good person/product in the space, I am finalizing a list of things to cover:

Signage
Utilites
Lease length
Hours of operation
So many other things I can't even think!

My hub just walked in and I have to start the kids on their Halloween stuff but will check back. Again, thank you so much!!








CONGRATULATIONS,

I think that this could only be GOD after what you went through. I wish I could get this opportunity. They are hurting, but even if its only 6 months or whatever. it gives you a chance to get out there, saving you a ton of money. I have managed tons of bakeries, hard work but every store sales increased. I have 14 years of experience from sams club 6yrs, winn dixie 3yrs, savacenter 4yrs, and the rest is mostly custom cake shops. The only way I would run another grocery store if I could pocket the money. yes what he is charging is really cheap. If managed right, my grocery store bakery at its lowest point made 12,000 a month. If the deli is doing good, you can find out at what time are they doing great. If its breakfast then I would have big cinnamon rolls packaged 2 to a pack smelling the store they always sold out, cream cheese iced. and at lunch time I always did cookies but whatever you do, I could guarantee that they going to ask for it. I know you do custom cakes but there are some important little things that could count as well, I advise you to get some help cause you are going to need it.

Deb_ Posted 31 Oct 2009 , 10:02pm
post #24 of 88

You'll want to carry business insurance for sure.

Also will you need to get the kitchen inspected/licensed for your own use?

Good luck I hope it works out for you.

mkolmar Posted 1 Nov 2009 , 12:21am
post #25 of 88

Sweet giblets, it sound too good to be true.
I'd be jumping all over that.

sugarycreations Posted 1 Nov 2009 , 4:14am
post #26 of 88

CakeDiva, That's a wonderful rent! I pay more rent than that & was tickled to death with the deal I got as it worked out to less than $.50 a square foot. No ready traffic like you'll have so I'm spending a lot of time marketing. Plus as Debbie said what equipment I have I bought & I pay the utilities.

Biggest thing you need to do is think. Is this what you want? This would be a full-fledged business. If it is, check out all the details & talk & talk with hubby to make sure this is what you want. If it is, it sounds like a marvelous opportunity. If it's not, it's certainly reassurance for you that SOMETHING is out there waiting with your name on it.

Be anxious to hear what happens. If you take the plunge, I wish you all the luck in the world.

cakesbycathy Posted 1 Nov 2009 , 4:31am
post #27 of 88

Sounds like this could really be a wonderful opportunity for you.

That said, do NOT put one foot in there and work until you have an extremely detailed (read: written by a lawyer) contract signed by all parties.

Also, I am really curious about your meeting Monday with crazy cafe lady. Make sure you fill us in icon_wink.gif

step0nmi Posted 1 Nov 2009 , 4:31am
post #28 of 88

I am curious about the Lease being up in March....that doesn't sound so sure of a deal for me. They can't guarantee they would be able to purchase another lease with them. I would have a lawyer draw up a 3 month lease to be renewed if they get into a lease again. If this sounds like a good deal for you I would definitely write down a plan for if something happens in March, a back up plan.

If I could find a place like that for rent I would jump on it also. icon_lol.gif But don't make it sound like it's soo cheap that they seem silly icon_wink.gif

rosiecast Posted 1 Nov 2009 , 4:39am
post #29 of 88

Cakediva, That sounds great!! I hope you listen to the advice from all the experienced ladies here and wish you the best of luck!!!

WykdGud Posted 1 Nov 2009 , 6:00pm
post #30 of 88

I would talk to an insurance agent. They base your rate on square footage - so you'd need to know if they would consider the whole store or just the bakery portion. You may be paying a few hundred dollars a month in insurance depending on that.

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