Location

LEARNING OBJECTIVES

By the end of this chapter, you will be able to:

• Identify the experts you will need to partner with to select a building, create a plan for the building and complete the buildout.
• Understand some of the complications and points of negotiation involved with commercial leases
• Understand the basic requirements necessary when creating your buildings plan and aesthetics

Initially, it is important to consider and establish where you intend on locating the business and why? Many people make the mistake of only considering the location in proximity to their home or community. Though this might make your commute more efficient it does not necessarily meet the needs of the people whom you intend to serve. Is this where the customers that are searching for your product live and or work? Does the community need your business?

After establishing that there is a need in a given community for your product or service it is then necessary to support that assumption with demographic data.

Once you have established the town city or neighborhood your business will be located in, the next step is to find the building.  Initially, it can be beneficial to do an online search looking at a commercial property available to get an understanding of what the cost is per square foot and where there are available buildings. Some online search engines for commercial property are Crexi, Loopnet, and Commercial @ Century21 to name just a few. After some familiarity, it makes sense to reach out to a commercial realtor or broker to help you find and assess buildings or spaces that would be conducive to the business’s needs and uses within your projected budget. Commercial realtors or brokers commonly work on commission, meaning they get compensated based on the total lease you sign.

Some basic useful terms related to your real estate search are, square foot – this is the length x the width in feet so for example if the building is 90 feet long by 40 feet wide it would be listed as 3600 square feet. A lease might be listed annually or monthly. If the lease says 15$ per square foot annually then you multiply 15$ x 3600 = 54,000 annually then divide that number by 12 to get the monthly lease amount. You will also see the terms gross or net associated with the lease. If it is listed as a gross lease that implies that all your costs are included in the rent versus a net lease which means you may also have to pay for your utilities and in some cases the property taxes etc.

What is the national average of rent as compared to income for bakeries? 

Buy

If you have the opportunity to buy a property this can be ideal especially if you are going to need to do substantial construction to accommodate your business. In most cases, startup bakeries begin by leasing space and not buying given the investment needed.

Lease

If the business intends to lease space the business is the tenant and the owner of the building is the landlord. It is in the business’s best interest to engage with an attorney that specializes in commercial real estate law so as to advocate for the business in the negotiations of a lease. A lease should serve the tenant and the landlord fairly. Areas that are of particular interest are the following:

• Length of lease and options. In a new business, many business owners prioritize flexibility, avoiding the potential of getting burdened by an extensive binding lease. A lease with generous options will need to be negotiated and often comes at a cost. If a landlord wants you to sign a five-year lease, you are committing to paying 5 years of rent regardless of the success or failure of the business . If however, you commit to a 1-year lease with a 3-year option and then a 5-year option you have a lot more flexibility should the business not go well or it goes really well and you want to move and expand.
• Ensure you have a clear understanding of the rights and restrictions to make changes or improvements to the building.
• Construction costs and credits and or pro-rating of rent. It is often the case if you are opening a food business that you will need to make changes to the building. The question is always who should pay for these changes? You are potentially appreciating the value of the building by increasing the electricity and adding ADA bathrooms etc. But if the construction you are proposing is specific to your business the landlord may not see this as value-added and will argue that this cost should be assumed by the business and not the landlord.
• Signage allowances and restrictions. Is the business allowed to paint the side of the building with a logo or hand a banner etc.
• Awning
• Potential for an outdoor cafe
• Real estate taxes – who is responsible to pay these? This can be a very large cost and must be considered.
• Utilities – Electricity and gas
• Maintenance of HVAC especially if the unit is on the roof or outside of the space.
• Who is responsible for the roof and the outside walls. In other words, where does your responsibility begin and end and where does the landlord’s responsibility begin and end.
• Trash Removal
• Window Washing
• Maintenance of parking lot
• Snow removal
• Landscaping
• How accessible is the building for delivery and distribution access
• Weight-bearing potential for floors is important especially if there is a basement under the ground floor level

Planning and Working with an Architect

From the beginning, it is essential to partner with an architect that has depth and experience in the design and implementation of commercial food establishments. Once you have secured an architect then the next step is to address your budget, your use intentions for the building, a preventative approach to potential risks including consideration of the types of materials you intend on using, construction of the space paired with inherent limitations and opportunities of the building you are considering.

Producing baked goods and food more generally is an activity that is dependent upon the temperature of the workspace, airflow, and ventilation. Therefore HVAC ( Heating, Ventilation, Air Conditioning ) should be a primary consideration when planning and building. You will want to have maximum ventilation and airflow paired with the ability to cool or heat the space appropriately and as needed. In bakeries, you will be generating a fair bit of heat from the ovens and all the equipment that will be running. Heat can impact so many products in a bakery and why we pay particular attention to this area of construction.

Each building will have different weight-bearing tolerances understand the weight-bearing needs associated with equipment and then compare them to the building you are considering. For example, if the building has a basement, this will typically mean that the first floor might not be able to hold a deck oven without creating a structure to support the weight.

Understanding the needs and ways to maximize storage space is critical to cost savings in a bakery and pasty space. If you are able to store things cleanly, with easy access, and without unnecessary hurdles, you will create an efficient and effective storage system and save money. An area of storage often overlooked is above a workstation. Use the verticals of the building to maximize your space.

Sufficient electricity is an area that all food production must contend with. All of our equipment is dependent on reliable electricity and typically we have numerous pieces of equipment running at once. It has been said that in a kitchen you can never have too many outlets and this I have found to be true. Hanging retractable electrical outlets are very beneficial in a kitchen for adaptable access. You will also undoubtedly need three-phase electricity and more electricity coming into the building.

The efficiency of production can save so much money and be the difference between a profitable or losing business. It is therefore time well spent when you work with the architect to clarify the production and product flow. Labor is one of the most expensive costs to a business and if you can minimize it by good planning you are on your way to profitability.

Plumbing is also an area of building planning that should have serious thought given the necessity for a three comp sink, hand sinks, potential steam injection into ovens, potential water meters over mixers, utility closets, espresso machines, ice machines, and bathrooms to name a few areas that will be relying upon the water.

Fire prevention and standards are accessible through each town’s building codes and restrictions. All of this should be considered when creating your plan.

The ADA is “The Americans with Disabilities Act (ADA) is a Federal civil rights law that prohibits the exclusion of people with disabilities from everyday activities, such as buying an item at the store, watching a movie in a theater, enjoying a meal at a local restaurant, exercising at the local health club or having the car serviced at a local garage. To meet the goals of the ADA, the law established requirements for private businesses of all sizes. These requirements first went into effect on January 26, 1992, and continue for both for-profit and non-profit organizations.” https://www.ada.gov/smbusgd.pdf

Entrances and exits also play a key role in inefficiencies and workflow. Pay careful attention to where you will be receiving ingredients and how. Many purveyors or distributors require a dock of some sort to make deliveries. IF this is not available your deliveries will be upcharged in many cases. Additionally, how will the person who is delivering the product get to the walk-in coolers or freezers? Will you have dedicated space for palettes of flour? How will you load a van if you are a cake producer? Will you walk through the storefront? All of these become increasingly important as your volume of production increases and impacts the operations.

Construction 

Once the property has been leased and the architect has completed and you have approved the drawings you would take the drawings to get a building permit or you would find a commercial contractor who would secure the building permits.  A general commercial contractor is an expert who manages the buildout, adheres to the building codes, sub-contracts other discipline experts, manages the building labor, manages the timeline, and is your overall point person for the construction. This person should have a track record of building restaurants and or bakeries making them very familiar with all of the building requirements and potential issues. Contractors should also be, insured, licensed, and bonded. When contractors have these assurances in place you have recourse should they not be able to complete a job for some reason.

Aesthetics

As with all steps in your planning you are going to want to start with the end in sight and make sure the aesthetics match your brand and vision. It is helpful to create an aesthetics board including all the customer-facing visuals and textures. This will be essential to give to your architect and contractor so all parties are executing on your vision. So for example if you want your bakery to feel like you are stepping into a French Patisserie from the 1940s then you would pull images from many sources including, paint, marble, brass handles, tiles, colors, lighting, fixtures like tables and chairs, etc. This should be incredibly fun and exciting to tie all the elements together and then watch them unfold.

http://solr.bccampus.ca:8001/bcc/file/390f5e1a-8ec4-45cf-9caf-b692536add2d/1/Basic-Kitchen-and-Food-Service-Management-1602891011.pdf

Poor kitchen layout can limit the number of individuals who can work efficiently. It may require time-consuming trips to distant storage areas to obtain food items or dishes. If the layout of the kitchen is too spread out, the minimum staff needed to operate each station may increase. For example, if a salad preparation station is located away from the main kitchen, you may require a salad preparation person even when the restaurant is not busy. Production equipment such as mechanical peelers, choppers, and mixers can reduce the amount of time spent doing these tasks. The key in selecting the appropriate facility design and equipment is to match these parameters to expected volume of business. For example, if you purchase too large a mixer for the volume of business, the work involved in cleaning the machine after use will not warrant the extra expense of purchasing the equipment. On the other hand, too small a mixer will reduce efficiency as you will be unable to mix the quantities needed in a single batch. Similarly, if your kitchen layout is very compact, you may be able to run efficiently with only one cook. Factors Affecting Working Performance 97 However, you may be unable to meet the demands of a high volume of sales because the kitchen is too small to accommodate more than a couple of staff.

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