The Golden Rule
Shorter commitments are better for new businesses. Start with hourly or month-to-month. Only sign longer terms when you're confident in your needs and the facility. It's easier to extend a good arrangement than escape a bad one.
Types of Kitchen Contracts
Hourly/Sessional
Best for: Testing, low volume, irregular production
Commitment: Pay as you go
Pros
Cons
Monthly Membership
Best for: Growing businesses with regular needs
Commitment: 1-6 months
Pros
Cons
Dedicated Lease
Best for: Established operations, high volume
Commitment: 6-24 months
Pros
Cons
Key Contract Terms to Check
Contract Length
How long you're committed for. Shorter = more flexibility.
Notice Period
How much warning you need to give before leaving.
Price Increases
How and when rent can be increased.
Included Services
What's covered in the base rent.
Access Hours
When you can use the facility.
Deposit
Upfront security deposit required.
Insurance Requirements
What insurance you must have.
Exclusivity
Whether competitors can use the same space.
Red Flags to Watch For
No written contract
Always get everything in writing. Verbal agreements have no protection.
Automatic renewal without notice
Contract auto-renews for another year without prompting you.
"As-is" condition with no maintenance
You're responsible for fixing equipment you don't own.
Unlimited price increases
Rent can be raised at any time by any amount.
Personal guarantee required
You're personally liable if business fails. Avoid if possible.
No exit clause
No way to leave even if circumstances change dramatically.
Vague "additional charges"
Unexpected fees for cleaning, waste, maintenance, etc.
Non-compete clauses
Restricts what you can do after leaving. Usually unfair.
Negotiation Tips
Everything is negotiable. Here's what to ask for:
Ask for a trial period
1-3 months at reduced commitment before signing longer term.
Request break clauses
Ability to exit after 6 months if business needs change.
Cap price increases
Maximum annual increase (e.g., 5% or RPI).
Clarify all costs upfront
Get a full list of what's included and what's extra.
Negotiate on slow periods
Landlords more flexible in quiet months (Jan-Feb, Aug).
Ask for first month discount
Common to get 50% off first month or deposit waived.
Before You Sign Checklist
When in doubt, ask. A good landlord will happily explain any term. If they're evasive or dismissive about your questions, that's a red flag about how they'll treat you as a tenant.
Written by
James Mitchell
Ghost Kitchen Operations Director & Industry Expert
Frequently Asked Questions
How long should a commercial kitchen contract be?
For new businesses: Start as short as possible - hourly/sessional, or month-to-month. This gives you flexibility to adjust as you learn what you actually need. For established businesses: 6-12 month terms are reasonable and often come with better rates. Avoid 2+ year commitments unless you're very confident in your needs and the facility.
What should be included in the rent?
Typically included: Use of equipment (ovens, fridges, prep surfaces), utilities (gas, electricity, water), basic cleaning of communal areas, waste disposal, WiFi/internet, maintenance of equipment. Often extra: Storage space (cold/dry), parking, out-of-hours access, deep cleaning, laundry, packaging materials. Get a complete breakdown before signing.
How much deposit is normal for a commercial kitchen?
Standard: 1-2 months' rent for monthly memberships. For hourly/sessional: Often no deposit, or small amount (£100-200). For dedicated leases: 2-3 months is common. The deposit should be protected or held in a designated account. Get clear written conditions for its return - timeframe (usually 30 days after leaving) and what can be deducted.
Can I negotiate a commercial kitchen contract?
Yes - everything is negotiable. Best leverage: Signing during quiet periods (Jan-Feb, Aug), longer commitment in exchange for lower rate, bringing other tenants/referrals, being an ideal tenant (insurance, experience, references). Start by asking what flexibility they have. Most operators expect some negotiation, especially on price and terms.
What insurance do I need for a commercial kitchen?
Typically required: Public liability (£1-5M - covers injury to others), product liability (covers illness from your food), employers' liability (if you have staff). You may also need: Contents insurance (for your equipment/stock), business interruption. The landlord's insurance covers the building, not your business. Budget £200-500/year for a comprehensive policy.
What happens if equipment breaks?
Check your contract carefully. Options: (1) Landlord responsibility - they fix/replace at their cost (ideal), (2) Shared responsibility - depends on cause of breakage, (3) Tenant responsibility - you pay for everything (avoid). For leased/dedicated kitchens, maintenance is often your responsibility. For shared kitchens, it's usually the operator's. Get this in writing.
Can I leave a commercial kitchen contract early?
Depends on your contract. Look for: Break clauses (right to exit at certain points), notice period requirements, early termination fees (often 1-3 months' rent). Month-to-month: Usually just need to give notice (1 month typical). Fixed-term: Usually obligated for full term unless break clause exists. Negotiate flexibility before signing.
Should I get a lawyer to review the contract?
For simple hourly/monthly agreements: Usually not necessary if you read carefully. For 6+ month commitments or high monthly costs (£1000+): Worth getting a brief review (£150-300). For dedicated leases: Strongly recommended - treat like any commercial property lease. A lawyer can spot issues you might miss. One hour of legal time can save thousands.