A $1,600 refrigerator can look like a much better deal than a $4,000 refrigerator. Seven years later, the math may tell a different story.
That difference is easy to miss because the purchase price is sitting right there on the quote. Repairs, replacement costs, lost food, downtime, and day-to-day operating expenses aren’t nearly as obvious.
In my 25 years working with restaurant equipment, I’ve had plenty of opportunities to see what holds up and what doesn’t. I’ve also seen where spending more makes sense and where it absolutely doesn’t. Sometimes the less expensive choice is perfectly capable of doing the job. A higher price doesn’t automatically make something a better buy.
The real question is what that equipment will cost once you start using it.
When Cheaper Costs More
Let’s go back to that refrigerator. For comparison, assume the $1,600 refrigerator has a two-year warranty and dies the day after the warranty expires. Yes, that’s awfully convenient for the math, but stay with me. Over seven years, replacing it three times would cost $4,800. Add three $200 service calls and $500 for spoiled food each time, and the total comes to about $6,900.
A $4,000 refrigerator with a seven-year warranty, using those same assumptions, comes to about $4,700 after one service call and $500 in lost food. That’s a $2,200 difference on a single refrigerator.
And refrigerators have a wonderful sense of timing. They don’t usually die while someone is standing there watching them. It’s after you turn off the lights, lock the doors, and go home. By morning, you may have lost the refrigerator and everything inside it.
Then there’s the repair itself. Some lower-end equipment uses imported parts that may take weeks or even months to obtain. Saving money on the refrigerator isn’t much comfort when you’re spending the next two months figuring out how to operate without it.
Built For Real Life
Cabinetry doesn’t have a compressor or a warranty full of fine print, but the same thinking applies.
Back-bar cabinets live a rough life. Water gets on them. Drinks spill. Employees lean on the doors. Some sit on them. Those of us who aren’t quite as young as we used to be may even grab a cabinet door for a little help getting up from a crouch. The point is cabinetry in a center takes more abuse than you might expect.
Construction choices can affect how long it lasts. In food-and-beverage areas, we typically specify marine-grade plywood rather than particle board and use heavier-duty hinges. Marine-grade plywood is better suited to the moisture that comes with the environment, while particle board can absorb it, swell, and eventually need to be replaced.
You might save several thousand dollars on back-bar cabinetry upfront. But if a $5,000 cabinet has to be replaced repeatedly, the bargain disappears pretty quickly. Spending roughly $10,000 to $12,500 on cabinetry designed for a much longer life can cost considerably less over time.
The Oil Adds Up
Fryers are near and dear to my heart. I realize that’s an odd thing to say about a fryer, but the numbers explain some of the affection.
Take a bank of three fryers, each holding about 65 pounds of oil. At today’s prices, a complete oil change for all three can run around $200. If you’re dumping that oil every week, the cost adds up quickly.
Filtering changes that equation. Fryer oil collects food particles and other debris as it’s used, and filtering removes that debris, so the oil lasts longer. With regular filtering, particularly twice a day, I’ve seen oil last two to two-and-a-half weeks before it needs to be replaced. Extending the time between $200 oil changes from one week to more than two can add up to thousands of dollars in savings over the course of a year.
That’s why I’m a big believer in fryers with built-in filtration. The system drains the oil, filters out debris, and pumps it back into the fryer, making it much easier for employees to filter the oil regularly. If there’s one place where spending more upfront can keep saving you money every time the fryer is used, this is a pretty good example.
Look Beyond The Equipment
The price of the equipment itself is only part of the cost. What it takes to keep it running, or even get it installed, belongs in the calculation too.
Cooking equipment eventually needs repairs, and that’s when parts availability matters. A common part for established equipment may already be on a local service truck, allowing a technician to get an oven running the same day. A less common imported part can take considerably longer to arrive. If that oven handles a significant portion of your menu, you’re left figuring out what you can serve until it’s back in service.
Installation can change the math just as quickly.
Ventless cooking equipment may have a higher price tag but consider what it can eliminate. I estimate an installed commercial hood can run around $10,000 per linear foot once HVAC, makeup air, fire suppression, and the other requirements are included. A three-foot range typically needs about four feet of hood coverage, putting that installation at around $40,000.
So, if the ventless option costs a little more but saves you from installing a $40,000 hood, which one is really more expensive?
Where Cheaper Works
Of course, sometimes the cheaper choice is in fact the better one.
Take stainless steel. A $3,000 slicer needs a sturdy table to support it. Saving a few hundred dollars on a lighter table doesn’t look like much of a bargain if the legs eventually give out and your $3,000 slicer lands on the floor. That’s a place where spending more for heavier construction makes sense.
A hand sink is another story. It sits against a wall and holds water. You probably don’t need a $300, $400, or $500 stainless-steel hand sink when a thinner-gauge version costing $150 or $200 can do the job perfectly well.
That’s where the numbers need a little more thought than simply comparing two quotes. What does the equipment have to do? How hard will you use it? What does it cost to operate, how quickly can it be repaired, and what happens to the business while it’s down?
Sometimes the cheapest option really is the right one. I’m all for saving money. I just prefer it when you actually save it.
