How do I check a fast food franchise’s kitchen equipment before buying?
Walk the line during service and check each major item: fryers, holding cabinets, walk-in cooler and freezer, hood, drive-thru headsets and the POS. Ask for service logs and contracts, find out what is leased or franchisor-specified, and ask which items the brand’s next equipment standard will replace.
Equipment is a large part of what a buyer takes over in a quick-service unit, and brands are strict about what runs in their kitchens. A tired fryer or a failing walk-in can cost more to fix than a buyer expects. Check the equipment yourself, ideally with a technician, and do it while the restaurant is busy.
Look at the main pieces in use
Ask to watch the kitchen at a peak time. Listen to the fryers and compressors, check that holding cabinets keep their temperature, and look at the walk-in for ice, damaged seals or standing water. Look at the hood and the ventilation too. Note the age and make of each piece, then ask what has been repaired or replaced lately.
Read the service logs and contracts
Ask for repair invoices, maintenance schedules and any service agreements. Frequent calls for the same machine tell you something. Check whether the drive-thru headsets, screens and POS are owned or supplied under a contract, and whether those contracts end, transfer or need the vendor’s consent when the franchise changes hands.
Separate owned, leased and brand-specified items
Make a list marking each item as owned, leased or on loan from a supplier. Some brands require equipment from approved vendors, and the franchise agreement sets the rule. Your lawyer can tell you how leased items are handled in the sale, and the lender will set its own terms on what it will finance.
Ask what the next standard will replace
Brands update their equipment packages from time to time, and approval of a new owner can come with a requirement to meet the current standard. Ask the franchisor, through the seller, what is planned. The page on renovating a franchise resale covers the related question of upgrades.
Related reading
15 pages on the same subject, grouped by topic.
Due diligence
Buying
- GuideFood franchise opportunities in Canada: what franchisors publish
- Expert answerDo I have to renovate a franchise resale location?
- Expert answerWhat is a franchise resale?
- Expert answerIs buying an existing fast food franchise cheaper than opening a new one?
- Expert answerHow do I compare fast food franchise brands before buying one?
- Expert answerWhy do some fast food franchises cost less to buy into?
- Expert answerWhat should I check before buying a healthy fast food franchise?
- Expert answerWhat do fast food franchise owners wish they knew before buying?
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Canadian Franchise AssociationIndustryInterested in Buying a Franchise?
- 03Business Development Bank of CanadaGovernment5 tips to finance a franchise purchase
- 04Canadian Food Inspection AgencyGovernmentFact sheet: Preventive food safety controls
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