Cut Your Rent In Half. Really

Of course you could slash your occupancy costs if you let another restaurant operate in your space during times you’d otherwise be closed. But doing so seems crazy—until you see how Rise & Shine Biscuit Kitchen and Café and Basil Doc’s Pizza are pulling it off in Denver. Then it seems brilliant.

Cobranded locations have proven to work in the chain restaurant world, with the Dunkin’ Donuts/Baskin-Robbins collaboration being the most prominent example. But these two operations have the same parent company, and their units are designed and built from the ground up to accommodate two operations under one roof.

It’s a different proposition for independent restaurateurs. For them, the big question about restaurant sharing seems to be whether the money saved would be worth the day-to-day hassles that would inevitably result.

But let’s not overlook the upside potential, either. In addition to lower costs, restaurant sharing would enable many aspiring entrepreneurs to get into the business in the first place. Current restaurateurs could open a second operation, perhaps a more experimental one, with very little risk. Think of the concept as a de facto business incubator for the restaurant industry.

That’s how it worked for Seth Rubin, proprietor of Rise & Shine.

“What kept me out of the restaurant business was the start-up costs,” he told Denver television station KDVR. “It takes a great deal of money to build a commercial kitchen, do the construction, get the inspections and arrange for all the licensing.” We hear you, Seth.

Rubin’s idea was to open a breakfast-and-lunch-only restaurant that has a menu based on Southern-style biscuits. He approached Basil Doc’s Pizza owner Mike Miller to see if Miller might be interested in sharing space in his evening-only operation. Was he ever.

“He pays rent. We share utilities. We share in the paper goods and cleaning supplies, garbage can liners, everything people take for granted but is an expense of the business,” Miller told KDVR. The two independent restaurants even share advertising. Why not? Each operator is trying to attract customers to the same location.

Other synergies include employees and equipment. The lone hang-up to date: dry and refrigerated storage space. “There’s a division of space when it comes to storage,” says Rubin. “We have a third of the fridge. It’s clear which is ours—it’s packed full of butter and buttermilk.” But if there’s growth going forward, these two independent restaurants are going to have to deal with a storage capacity issue, especially for refrigerated product.

Could this idea work for other independent restaurants? It well might, but the key in Denver is that Rise & Shine Biscuit Kitchen and Café serves until 2 p.m. and its workers have cleaned up and left the building by mid-afternoon. When the Basil Doc’s crew arrives to set up for their evening shift, no one is in their way. Basil Doc’s is a takeout-only pizza operation that opens at 4:30 p.m.

If you can find an aspiring operator whose hours would dovetail this neatly with yours, it might be worth a shot. As Rise & Shine and Basil Doc’s are demonstrating, it can be done, and the benefits are significant.