Financing strategies for today’s technology-driven “smart” kitchens.
By Austin Wilson
Like most industries, new technologies are rapidly transforming the restaurant business. Within the past few years, major upgrades to commercial kitchen equipment and software have been released, completely altering how some restaurants operate.
As an industry notorious for being fast-paced, the emergence of new equipment and constantly-changing technologies can immensely increase efficiency.
While it is essential that owners and managers keep their businesses operating smoothly and cost-effectively, hefty upfront costs and training hours have many weighing the benefits of upgrading to the latest and greatest ‘smart kitchen’ equipment.
That said, restaurant professionals should not be deterred from embracing new technologies where it is a strategic fit for their kitchens, as the benefits in both the short and long term can be significant.
Further, with a smart, dedicated financing plan, owners and managers can better position themselves and their businesses for immense cost and time savings and continued success.
Technological Advancements are Transforming Kitchens
Many restaurant chains and larger operations have implemented the smart kitchen model to improve efficiency and overall performance through streamlining operations and creating consistency. This can significantly reduce costs, primarily in three major areas: energy, labor and maintenance.
With these technologies rapidly advancing, smart kitchens are becoming more accessible for smaller restaurants and independent operations as well.
When considering what new technologies to invest in now — and whether to lease equipment or own outright — restaurant managers need to weigh the typical lifespan against the likelihood of significant advancement in the next few years.
For example, the latest smart ovens utilize radiant heating technology and can automatically lower their temperature once cooking is complete, which drastically decreases energy consumption.
Additionally, there are fryers that are capable of filtering and changing their own oil through an automated process, which greatly decreases labor time and cost, and can improve food quality.
While the usual lifespan for commercial ovens and fryers is around 15 years, restaurant kitchens that will greatly benefit from the evolution of these new technologies and processes might consider leasing the equipment on shorter terms of 5 to 7 years, to allow for a seamless disposal and upgrade to newer versions on the equipment.
Frequently Upgrade to Stay Competitive
Kitchen equipment is increasingly connected to the cloud, and becoming more integrated with everyday mobile devices. For example, maintenance alerts can be sent directly from equipment to smartphones, ensuring that problems are addressed immediately and protecting against cashflow lost to downtime.
Food safety management systems aim to streamline food safety regulations, reduce paperwork and improve a restaurant’s health inspection results. Some of these programs can even digitally monitor the temperatures in commercial refrigerators and freezers, ensuring food is kept at the correct temperatures.
The Internet of Things, or IoT, is a network that can be used to create an entirely smart and remotely controlled kitchen by creating a digital connection in which all appliances are able to communicate with one another, therefore requiring significantly less manual operation.
By selecting which software systems are the right fit and can benefit their business, owners and managers can save themselves critical time and unnecessary stress on food safety monitoring, energy and labor management and digital inventory tracking.
While some pieces of kitchen equipment offer something completely new with their design and integration of technology, in other cases, basic, older equipment can be upgraded with something as simple as the implantation of a chip to connect it to a Wi-Fi network.
For example, a commercial freezer can have a usable life of 15 years or more if well-maintained, meaning that owners might consider acquiring the asset outright or on a 10-year, lease-to-own plan. That said, it can still be upgraded to take advantage of the latest temperature control, food safety monitoring and inventory tracking technologies through the implementation of new software.
What many restaurant operators do not know is that the software programs used to streamline operations throughout a restaurant can be leased on affordable monthly payment plans that allow for seamless upgrades, just like hard assets.
The unwritten rule in IT is that software should be refreshed at least every few years to avoid obsolescence, meaning lease terms of 2 to 3 years are ideal for restaurant owners and managers to stay ahead of the curve and maximize profits gained from implementing smart technologies.
Seamless Integration for Budget-Friendly Convenience
Many restaurant operations have begun utilizing new software in order to simplify management processes, ensure that safety regulations are met, and improve overall efficiency in both back-of-house and front-of-house (as well as to help streamline communication between the two).
This new technology is positively affecting processes such as customers ordering their meals and requesting refills from tablets, to employees tracking inventory and scheduling reorders.
Restaurant owners and managers juggling day-to-day operations with complicated budgeting tasks can deeply benefit from identifying a finance partner that has the ability to roll together both hard costs, such as kitchen and dining room equipment, and soft costs, such as the software used to operate smart kitchens and POS systems.
For example, we recently funded kitchen equipment on behalf of a client for items such as walk-in freezers, ranges and fryers, along with cafeteria furniture and a POS system. These arrangements allow for restaurant professionals to make a consistent monthly payment at a low interest rate, while acquiring all of their equipment and technology needs.
Rapidly-changing commercial kitchen equipment options can be difficult to navigate amongst the daily operations of the hectic restaurant industry.
With the assistance of a trusted finance partner, restaurant owners and managers can better understand their options and secure competitive and convenient payments. While upgrading a restaurant kitchen might seem daunting and expensive upfront, there are strategic financing options that preserve cashflow and ultimately allow restaurants to reap the immense benefits of saving on energy, labor and maintenance costs going forward.
— Austin Wilson is an account executive at Summit Funding Group, an Ohio-based company that provides equipment lease and finance solutions to businesses across the U.S. and Canada. Founded in 1993, Summit Funding Group has originated more than $3 billion in equipment lease and finance transactions to date. For more information, visit www.summit-funding.com.