Managing Equipment Costs in Food Service
A food service operator makes the best profit when customer service is good, operations are efficient, and the food is high quality.
Continually driving efficient operations and producing high-quality food relies on having good equipment. When considering a vendor for your stores’ equipment, here are some things to keep in mind.
Franchise stores have great advantages when selecting equipment. Franchise stores often have preferred vendors that corporate allows their franchise locations to pick from. These pieces of equipment are already certified by the National Sanitation Foundation and United Laboratories for high-volume food production as well as food safety. These manufacturers will also have regular upgrades that comply with code and include new features to protect food safety. If you’re not in a franchise model, make sure that your equipment is certified and backed by a reputable organization.
Although these options exist for franchise locations, many stores do not have preferred vendors or the preferred vendor is inconvenient for a store to use due to location, store volume, or pricing. When selecting an equipment vendor, owners often don’t consider asset downtime, emergency repair cost, and cost of routine repairs that contribute to the total cost of ownership of an asset.
Some vendors may offer cheaper parts that cause frequent malfunctions or breakdowns. These breakdowns increase the cost of the asset over the time that it’s owned and causes a decrease in profit from potential lost sales or food loss.
Some vendors may have great equipment that will work well in a store, but their licensed contractors aren’t close by – meaning:
higher repair bills > longer wait times for repair > additional asset downtime after major breakdowns
Certain vendors that are preferred throughout an organization will often provide training guides for the equipment they consider to be standard, and will train staff on cleaning and maintenance of the equipment. This training can help health checks go smoother because of processes that can be put in place with maintenance.
When making a repair or replace decision in your business the general rule is to replace an asset once you’ve invested 75% of its overall value in repairs. In food service this threshold is sometimes pushed back to 50% because the risk in downtime is not worth it after that point of investment. Based on your business model and vendor relationships, repair/replace thresholds are something to consider when purchasing equipment. Make sure to ask the vendor what their recommended threshold is.
When considering a vendor for multiple store locations there are some things that need to be considered over the lifetime of these assets.
- Availability of parts
- Store location proximity to certified vendors
- Frequency of upgrades
- Certifications on the equipment
- Brand loyalty at other site locations
- Repair v. replace thresholds
Multi-store locations are often loyal to an equipment brand that they know and trust. A trustworthy and reliable equipment vendor that works well in a store location means less time worrying about breakdowns and unexpected equipment costs, and more time focusing on customers.