Facing limited capacity and modified business models, restaurants in every segment are looking for all possible ways to whittle down costs.
In many cases, tens of thousands of dollars can be found in an operator’s approach to repairing and maintaining equipment.
Grand Rapids-based 86 Repairs, a business that provides end-to-end equipment repairs and maintenance processes for restaurant groups, recently released a study called “The State of Repairs.”
Originally intending in March to release the study — which provides trends of repairs and maintenance in the restaurant industry, 86 Repairs held off to provide additional data and insight that accounted for the COVID-19 era, which has completely blown up standard operating procedures for restaurants across Michigan.
“Restaurants do not have a lot of technology in the back of the house,” said Daniel Estrada, co-founder and CEO of 86 Repairs, which splits operations between Grand Rapids and Chicago in addition to staffing a remote team. “There isn’t much good data on what kind of repair and maintenance programs help save you money. That’s one of the big reasons we published this report — to provide visibility to what kind of things save restaurant operators money.”
The report details the typical equipment repair and maintenance needs of quick service restaurants (QSR) and full-service restaurants (FSR). Many restaurant operators see these processes as death by a thousand cuts.
Common, costly pitfalls
The average yearly spending on critical equipment repairs for QSRs is $9,360 per location, including $520 per service incident on average. That total is greater for FSRs, which see $13,161 average yearly spending on critical equipment repair and $457 per visit.
On top of that is the cost and inconvenience that comes with having a critical piece of equipment offline. The report says a critical piece goes down roughly 1.5 times per month for QSRs and 2.4 per month for FSRs.
Resolving these problems typically takes seven to nine communication touch points, 1.5 days to get a service person on site and three days to order parts.
Some of the most common pieces of equipment that require servicing — based on 86 Repairs’ own clients — include refrigerated prep tables, walk-in coolers, ice makers, dishwashers and gas-powered fryers.
On the job at 86 Repairs, Estrada said he regularly sees inefficiencies in a few different areas of the restaurant business. For starters, communication among large restaurant groups is one of them.
“Within restaurant groups, there is a lot of miscommunication about repairs and there are mistakes that are made and it costs operators money,” Estrada said. “An example of this is paying a company to come out and flip a circuit breaker. In many cases, no one knew to ask that question.”
Another area Estrada stresses is managing vendor relationships, which includes everything from finding the appropriate vendors for each market and making sure operators are leveraging them in a cost-effective way. Estrada said this can be challenging for operators.
Also, Estrada said many operators find savings in preventative maintenance plans, of which 86 Repairs has seen an influx.
“It’s something that many operators underutilize to save money,” he said. “Part of the reason is they don’t necessarily know where it’s proven. We believe that there is not good enough technology or data in that part of the industry so we’re collecting a lot of those insights on which PM programs actually save operators money.”
Taking time to assess
Jeff Lobdell, president of Restaurant Partners Management Inc., also known as 4GR8Food Brands, utilizes 86 Repairs’ services for his portfolio of restaurants, which numbered 20 heading into the pandemic shutdown.
He pointed out that having a reliable vendor in his company’s corner empowers managers of all levels with the ability to troubleshoot equipment repair and maintenance needs instead of it all falling on a single senior manager.
Restaurant Partners Management — whose portfolio includes names such as Rockwell Republic, Beltline Bar and Sundance Grill & Bar in Grand Rapids — was able to step back and reassess its operations when restaurants were restricted from hosting dine-in patrons.
“We’ve never been more proud of how our facilities look and how they function,” Lobdell said. “Because we took the time that we were unable to serve guests in our dining rooms and we upgraded as much as we could.”
Lobdell’s group, like most operators, chose to make some upgrades and adjustments to accommodate for an influx of carry-out patrons. None of the changes, however, were monumental in nature.
“Some of our restaurants, we got more cheese melters and pieces of equipment to help finish the product,” Lobdell said. “Rockwell Republic, because of the popularity of our sushi, we upgraded our sushi line where there could be packaging up above the sushi instead of having to run across the kitchen to get the packaging.”
Through the chaos of the pandemic, Estrada said operators have shown innovation and resiliency when it comes to operating their businesses, which will ultimately benefit them on the other side of the pandemic.
“When you compare pre-COVID revenue to revenue now, yes it’s down about 20 percent but (many operators) have been able to flex some of their costs down and shrink their menus and improve margins, focusing on more high margin items, lower their food costs, lower their labor costs,” Estrada said. “When you think about the restaurant business itself, good operators have been able to make a lot of changes to their business to survive and in some cases thrive.”
News coverage in the food/agribusiness section of MiBiz is made possible by advertising support from Dan Vos Construction Company. Dan Vos Construction strives to serve people and to enhance life, while maintaining long-term relationships with customers, sub-contractors and employees. This advertisement has no effect on editorial consideration in MiBiz.