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National Restaurant Association - Does it pay to buy used equipment?

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Does it pay to buy used equipment?

Buying used commercial foodservice equipment can save you a bundle in the short term. But is it a good investment? Tackle these 10 questions before deciding whether to buy new or used.

1. What are your equipment requirements?
Start by determining your operation’s needs, recommends Joseph Carbonara, editor-in-chief of Foodservice Equipment & Supplies magazine. Can the equipment help you execute your menu? Can it handle the volume? Is it simple enough for your labor pool to operate? Consider any growth plans, like increased volume or menu expansion. He recommends investing in new equipment for cornerstone items, such as a brick oven for a pizzeria.

Familiarize yourself with the available equipment options by visiting local dealers or the NRA Show. Then decide what features you need.

2. What does it cost to purchase the item new?
 “If a used item costs more than 50 percent of the price of a new one, I would strongly suggest looking at new,” says Carbonara. Expect better bargains at auctions, but buyer beware.

3. What is the total cost of ownership?
To determine whether you’re getting a good deal, consider the total cost of ownership. Factor in the expected lifespan, the cost of service/repairs and operational costs. “The initial purchase price is just the tip of the iceberg when it comes to the total cost to own and operate an appliance,” says Richard Young, senior engineer and director of education for the PG&E Food Service Technology Center.

The cost of energy and other commodities, such as water or fryer oil, often exceeds the initial purchase price by many thousands of dollars. You might think you’re getting a great deal on a low-cost piece of equipment, but you potentially are throwing away big dollars on the operating side, Young says. FSTC offers an online calculator to help you estimate life-cycle costs.

To slash your energy and water bills, look for equipment that qualifies for either Energy Star and/or California Energy Wise incentives. See the lifetime cost savings of buying new Energy Star equipment versus new conventional equipment. Unfortunately, it’s often difficult to find used Energy Star equipment, notes Jeff Clark, director of the National Restaurant Association’s Conserve program, which focuses on environmental sustainability in the restaurant industry. “Be sure to ask your equipment dealer though; you might get lucky,” says Clark.

4. Has the equipment been reconditioned?
Some dealers recondition used equipment before re-selling it, replacing parts and making repairs as needed. Ask specifically what work was done. Reconditioned equipment comes with a higher price tag but lower risk than equipment bought “as is.” You also could consider buying remanufactured equipment that has been stripped down and rebuilt.

5. What type of warranty is provided?
Used equipment generally sells “as is” from auctions and individual sellers, so don’t expect a warranty. In contrast, dealers often provide a 30-day warranty on parts; some might give 60 or 90 days on parts and labor. If you want the security of a lengthier warranty, consider a remanufactured or new item. 

6. Can I get someone to service and replace parts?
Make sure parts are available and that a local technician can service and repair the equipment. Your chances are best with an American brand-name product, says Tim Schrack, vice president of purchasing for Omaha-headquartered Hockenbergs Foodservice Equipment & Supply, which has 10 locations throughout the country.

7. Who was the previous owner?
If you luck into finding equipment owned by a church or a school, it will have less “mileage” than the same piece operated by a high-volume quickservice restaurant. “It’s like buying the car that grandma drove once a week,” Carbonara says. 

8. How well does the equipment operate?
“Ask to see the equipment operate,” says Hockenbergs’ Schrack. “We’ll hook up any piece of equipment on request … It’s tricky to buy anything used online.”

An authorized service agent caninspect the unit to ensure that it is in good operating condition, Carbonara suggests.

9. Is the seller reliable?
Work with sellers who want to establish a long-term relationship with you, Carbonara advises. “You want someone who is concerned that they’re putting their name and reputation on the line and wants to be good with you for a whole bunch of deals, not just this one.”

10. Does the equipment stand the test of time?
Look for equipment built to last, with brand names known for endurance, says Jameel Burkett, president of Burkett Restaurant Equipment & Supplies in Toledo, Ohio. For example, Hobart mixers and slicers can last for decades, he says, as can items like stainless steel tables and shelving, which have no mechanical parts that break.

Convection ovens and ranges tend to stand the test of time, Schrack says. But be wary of steamers, dishwashers, ice machines and other equipment that use water because they can develop lime buildup. If not maintained properly, aging refrigeration equipment can become energy-guzzlers and lose some performance FSTC’s Young says. “If the refrigerant has leaked, the unit has been overcharged or the coils are damaged, then that unit will probably not perform to spec.”

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