Succumbing to the temptation of our favourite restaurant order being delivered directly to our door is probably something that many of us can relate to more than we would care to admit.
In Glasgow alone, customers can order from more than 1000 different restaurants on platforms such as Deliveroo and Just Eat. Consumers' appetite for enjoying restaurant-standard food from the comfort of their homes has prompted a rise in the popularity of 'dark kitchens'.
In this article, we will discuss the benefits of the dark kitchen model and particular legal factors that operators should be alert to when considering leasing property for the purposes of establishing a dark kitchen.
What are the benefits of dark kitchens?
Dark kitchens allow food and drink operators to dispense with the need for investment in expensive fit outs and waiting staff, and instead focus on a low-cost model where all that is required is a kitchen premises from which food can be delivered directly to customers, often through a third-party delivery company. This gives operators greater flexibility about where they take on premises.
As there is no direct customer interaction, the kitchen premises does not need to be located within a prime footfall area and the unit itself can be smaller than would be required for a traditional restaurant. As a result, dark kitchens tend to be located in purpose-built warehouses, with some operators opting to share the space with other brands. In some cases, operators may also have walk in options but on a much-reduced scale, particularly if the dark kitchen is located near a high street location.
Food for Thought
While dark kitchens may sound like a dream come true for an operator hungry for expansion, occupiers should take care when choosing property and agreeing lease terms.
Firstly, it is imperative that food and drink operators ask their solicitor to check the title deeds of the proposed property to ensure that it benefits from the necessary rights to install the kitchen extract plant and equipment – particularly in a tenement building – and that these rights flow down into the lease. Failure to do so could be extremely costly.
The title deeds and lease should also be checked to ensure that the property benefits from the necessary access rights during the proposed trading hours of the dark kitchen (which may differ from the trading hours of other operators on a retail park or trading estate) and that there are no onerous restrictions on waiting times for the collection of food. It is also not uncommon to see restrictions on cooking odours and noise levels emanating from properties and so operators will need to be careful not to breach these obligations.
Operators are also advised to consider the alienation provisions in the lease and particularly whether these provisions enable them to share possession or to sub-let in part. This will be particularly pertinent for operators wishing to share possession with group companies operating under different brand names, or for those that simply wish to share the premises with other operators to reduce costs. Ensuring that the alienation clause allows for flexibility will help operators tailor their delivery model to their needs and thereby capitalise on the benefits of the dark kitchen approach.
On the planning side, operators should also be careful to ensure that their chosen premises has the necessary permissions in place. As dark kitchens are still a relatively novel phenomenon, notwithstanding their fast emergence across Europe, there is a degree of ambiguity regarding the planning permission required and the position will depend on the specific circumstances. Operators would be advised to seek specialist planning advice from Brodies' planning team to ensure that they are comfortable with the planning position before they commit to a location. It will also be important to review the proposed user clause in the lease to ensure it is wide enough for their envisaged use and that the necessary permissions are in place.
As food and drink operators look to respond to market conditions, the key takeaway for those keen to capitalise on consumer demand for convenient deliveries is to be alert to the specific considerations and factors pertinent to this operating model to avoid any unexpected surprises on the menu in future.
Please get in contact with either Danny George or Emma Barnett in the retail and leisure team if you would like to discuss in more detail.
Contributors
Partner
Solicitor
