With operator budgets remaining tight due to a variety of economic factors, the temptation remains to buy used or lesser-known foodservice equipment in order to save a few bucks. Here are a few tips to help foodservice operators tell the good opportunities from the bad.
If there were a plan to make the used foodservice equipment market more attractive to operators, it would probably follow the events of the last few years pretty closely. The weak economy has forced many restaurants to shut their doors, putting a great number of used fryers, refrigerators, ovens and more on the market. At the same time, surviving or just-launched operations find themselves having to get by on tighter budgets, making used equipment more attractive.
Before operators invest in used equipment, though, they should take some steps to ensure that what seems like a good deal doesn't end up wasting precious resources.
Typically, foodservice operators can purchase used equipment through two different channels: foreclosure auctions and traditional foodservice equipment dealers that operate a used equipment arm. Foreclosure auctions generally have a buyer-beware policy, making them the riskier of the two, according to Billy Hagar, president of Hagar Restaurant Service, an equipment repair firm operating in Oklahoma City and Tulsa, Oklahoma, and Dallas/Fort Worth and El Paso, Texas. "Many times the operator that purchases that equipment has no clue of its condition, if it's mechanically sound, if it's energy efficient, or even if it runs," he said.
If buying at an auction, then, Hagar recommends operators bid with a few simple rules in mind. First, take note of how the equipment looks. If a piece was taken care of on the outside, there's a better chance that it was taken care of on the inside as well. Second, he said, operators should stick with familiar equipment brands. That way, there's a greater likelihood that parts for that piece will be available when the need arises, whether right away or a few years down the road. Hagar also encourages foodservice operators to have a service agency certified by the Commercial Food Equipment Service Association (CFESA) check out auction-bought units to help prevent an equipment failure during a grand opening or high-volume period.
Finally, Hagar recommends that potential buyers find out as much as they can about the previous owners and operation. If the equipment up for auction has been sitting unused for several months or even years, for instance, there's a greater chance that it has developed mechanical problems or that rodents have chewed on its wiring.
While purchasing used foodservice equipment from a traditional dealer is generally a safer bet, operators still must ask a few basic questions. If the dealer offers some kind of warranty, find out if that covers parts alone or parts and labor together. Also important is who is backing the warranty. Typically, the dealer will offer the guarantee, Hagar said. Occasionally, though, a manufacturer will back a piece of used equipment, such as when a dealer sells a lightly used demo unit or showroom piece.
When considering a major investment in a piece of dealer-sold used equipment, Hagar recommends even greater diligence. Ask the dealer if a CFESA-certified company can inspect the piece. Most reputable dealers, he said, will agree to this so long as the operator is willing to pay the checkout fee. The service agent should be able to pinpoint any problems, which can help the operator come to a final decision and even provide information to negotiate a lower price.
For cost-conscious operators, an alternative to used equipment is to purchase new items produced by lesser known manufacturers. While this equipment can offer good value and seem safer than purchasing something used, Hagar said operators should take steps to ensure that a simple service call doesn't turn into a major problem.
Parts availability represents one of the biggest challenges of caring for lesser known foodservice equipment. When considering one of these pieces, Haggar said operators should get the name of the service agency that will handle warranty claims. They should then call that firm and ask them about parts availability: What do they keep in stock and, most importantly, does that manufacturer have a parts warehouse in the United States? The lack of a U.S.-based warehouse can introduce other logistical challenges. For example, even if the operator is willing to pay for international next-day shipping, a replacement part can still get stuck in customs for days or even weeks.
Ultimately, Hagar said, when buying an unknown, the most important thing is to be ready for whatever you get, good or bad.
"Buying used equipment is kind of like buying a used car," he said. "You don't know if it was driven by a little old lady who only drove it to church on Sunday, or if it belonged to a teenager with a lead foot who drove it to school every day and went out street racing every night. If you buy 10 pieces of used equipment, you could have seven that work great, one or two that need some serious work to get them up and running, and one that gives you constant problems. You need to be prepared for whatever you get."