NICK Feature Question: What alternative options can we provide in terms of insurance and licensing, to help ease barriers for food businesses to become legal?

The Network for Incubator and Commissary Kitchens (NICK) is the largest network of shared kitchen professionals sharing their knowledge and insights daily. Below is a summary of a recent conversation regarding tracking company success and utilizing performance indicators. Answers may have been edited for readability.

Question:

Any cooperative models out there? Where the kitchen carries insurance and licensing, and umbrellas small producers either under a brand or as a sort of co-packing arrangement? I want our kitchen to help small producers, who are making food as part-time income, get legal, get safe, and make more money for their families.

For clarification: I’m exploring a track where a family that has a little side business selling a food item needs to get legal, but coming up with $1,000 to get insurance and the food permit means they are going to keep selling underground and trying not get caught.

Responses:

  • I like to think we are all cooperative models, but each maker needs to be their own legal entity with insurance, permits from their local and state regulators, and appropriate training for food handling or manufacturing. We love small startups and do all we can to help, educate and promote. But other than kitchen use, there has to be a clear delineation between their business and mine from a taxation standpoint, legal, food regulations and risk and liability.
  • I like to help people as much as the next person. And, I do but they have to be a legal entity, paying taxes, insured and properly trained to work in a shared environment. If I understand what you are saying, you are offering a facility to a business that has run illegally, uninsured and probably no valid permits a place to make food to sell to the public. All risk, taxation and liability shifts to you. You won’t have a leg to stand on if the tax man comes knocking or someone gets sick. No judge or insurance company will advocate for you. If they don’t have a $1000 to spend to do it all at one time, time is your friend. Get one thing now, another in a month or so, and so on for however long it takes but please PROTECT yourself in the process. I have worked with folks over a year to make sure it was done right.
  • Help by offering micro business classes, help with mentoring, help with marketing.
  • Each one goes through the inspection phase. We have classes – professional and for community. Also a job skills training and placement program.
  • We are more of a training center. My services extend beyond what your norm is. Remember what you’re offering and if you and your staff has the experience to give that knowledge. Don’t go into that phase of ‘lets help’ and you all don’t understand. As a training center I must know and understand all laws and rules pertaining to us and our clients.
  • Getting them legal and safe is hard if you don’t know how to go through the process nor how to put together a training or guidance to work from.
  • Something to explore in addition to classes, etc. is offering micro-loans to your members that qualify, to help support their upfront costs of getting legal and safe. I know Cleveland Culinary Launch & Kitchen, LLC offers micro-loans to some of their members. Or you may encourage them to acquire a micro-loan through Kiva, if it’s too risky for your kitchen to offer these loans.

Additional Resources:

  • The Food Corridor software can help your kitchen stay legal by alerting you when a client’s compliance documents are about to expire, so you both stay in good graces with the health department. Schedule a demo and one of our Gnomes in the know will show you how easy it is.
  • The Shared Kitchen Toolkit is a comprehensive guide to starting a new shared-use or incubator kitchen and managing day-to-day operations. Check out the sections on Programming and Special Uses for extra services kitchens may offer to food businesses.

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