What should I check before buying a restaurant equipment and supply dealer?

A restaurant equipment and supply dealer sells ranges, refrigeration, smallwares and the pieces between them to kitchens. It is a different business from a restaurant, and from a food distributor that sells consumables. A buyer should check its dealer relationships, its stock and the people who specify and install the equipment.

Manufacturer dealer lines

Many of a dealer’s best products come under agreements with manufacturers. Ask for copies, and ask whether each one continues when the ownership changes or whether the manufacturer must approve the new owner. Speak with the manufacturers if the seller allows it. Losing a major line after closing can change what the business sells, so settle this before you commit.

Inventory and used stock

Walk the warehouse and showroom with the inventory list in hand. Look for dated models, items that have sat for a long time, damaged goods and used equipment taken in trade. Ask how stock is counted and recorded, and how slow items are handled. Our guide to reviewing a restaurant’s kitchen equipment is useful background on how equipment ages.

Design, install and service

Some dealers earn as much from planning kitchens, installing equipment and servicing it afterward as from selling it. Ask how each department is staffed, which staff hold the key skills, and what happens to warranty and call-out commitments already made. Find out whether the installers are employees or subcontractors, and whether they would stay.

Customers and what drives sales

Separate trade accounts, such as restaurants, chains and contractors, from walk-in public customers, and ask how each is priced and served. Many dealers rise and fall with new restaurant openings, so ask how sales moved through slow periods. If a few chain or contractor accounts supply much of the work, ask who manages those relationships and whether they would continue.