For each of the past three years, restaurants have put an increasing amount of their capital into new kitchen equipment, with much of that investment occurring at the time of equipment failure.

Because so many restaurant and other hospitality businesses take this approach – and because it can be so expensive in terms of maintenance, downtime, and other costs associated with aging and failed equipment – in late 2023, more than 600 restaurants and 300 kitchen equipment manufacturers were surveyed to determine optimal lifecycle of key classes of kitchen equipment.

Here are the results:

While frequency of use can impact actual vs. recommended lifecycles, there is a clear tendency to operate equipment well beyond its recommended life in all asset classes. And, costs associated with operation, maintenance, and downtime can all increase for equipment used until failure.

Of course, there’s an optimal time to replace equipment, both in terms of the equipment’s lifecycle and a business’s needs around productivity, cash flow, budget, and other factors. However, only 13% of surveyed restaurants had a proactive plan to upgrade or replace equipment, whether with new units or used, which can be an especially attractive option in terms of cost and availability.

The takeaway? Planning for equipment upgrades and replacements can have a large positive effect on costs, productivity, and competitive strength. Here are three essential points to keep in mind as you develop your plan:

• Don’t wait for equipment failure to plan for it. The cost of running equipment to failure can be considerably more than the cost of equipment replacement
• Find the right balance of new and used equipment. Saving in some areas with used assets can open capital for newer assets that are more costly and mission critical
• Engage the help of an equipment finance company that knows your equipment and your industry to evaluate the relative financial impact of various replacement options and timeframes

For decades, the LEAF team has offered flexible financing for new and used kitchen equipment for hotels, restaurants, and hospitality companies of all kinds.