Lease of life: why renting kit may help you bounce back after Covid

26 February 2021 by

Appliance breakdowns could ruin an operation's post-Covid bounceback, but investing in new equipment can be difficult. Angela Frewin discovers how flexible leases and planned preventative maintenance schemes can help.

Lockdown stresses on hospitality staff and budgets have underscored the value of planned preventative maintenance schemes to minimise appliance breakdowns when fewer staff are on hand to cope, as well as leasing and financial alternatives to acquire quality replacements for failed equipment.

"Covid-19 has put much of the foodservice industry into severe economic distress. However, operators still have to invest in equipment – and leasing is proving to be an increasingly popular way to spread the cost of the investment," observes Steve Hobbs, chair of the Foodservice Equipment Association (FEA).

"The Covid-19 crisis has led to the development of increasingly flexible finance packages, notably with features like low-start payments or even payment holidays, especially at the beginning of the arrangement, designed to give the operator a leg-up to help build business.

"Investing in good-quality equipment is the best way to enhance your business. Leasing and other alternative finance options are a great way to benefit from the latest models – in fact, with many leasing arrangements, you can upgrade equipment during the lease to a newer model, to help you stay ahead."

Leasing schemes

Hoshizaki's new leasing packages offer the latest refrigerators, freezers and ice machines for as little as £50 per month on three-, four- or five- year contracts, says national sales manager Roz Scourfield. Cooker specialist Rational linked up with CF Capital to create a flexible, dedicated leasing scheme that can cost from £5 per day for an iCombi Pro and £8 for an iVario. An online portal (with quotation calculator) enables its nationwide dealers to create bespoke customer leasing packages.

"We wanted to work with a leasing company that was not only accommodating of our customers' circumstances, but that could also adapt schemes to suit specific purposes," explained managing director Simon Lohse. "We didn't just want an off-the-shelf package; we wanted a leasing scheme that is intelligently constructed to offer maximum flexibility and maximum benefits."

"A renting or leasing scheme really only works if the monthly payments are heavily offset by direct cash savings on energy costs. Such savings must be immediate and not some far-off goal to attain years ahead," advises Justin Cadbury, chairman and chief executive at Synergy Grill.

Synergy Grill's high-heat, low-energy process offers immediate energy savings (of 59% over standard grills) which, says Cadbury, exceed the monthly contract payments. Its patented atomising technology – which turns fats into carbon dust, eradicating the need to deal with greasy waste – offers further savings from reduced duct and cleaning requirements.

Leasing is proving to be an increasingly popular way to spread the cost of the investment

Paul Crowley, marketing development manager at Winterhalter, reports growing interest in the group's flexible Pay Per Wash (PPW) package, available for individual dishwashers, glasswashers and utensil washers. The washer and installation is free, while service and chemicals are covered in the package costs – operators simply pay as they wash. "Another key PPW benefit that's been focused on through the lockdowns is that if you're not washing, for example because the business is temporarily closed, then you're not paying anything at all," adds Crowley.

Leasing is most cost-effective when it covers multiple appliances, says Crowley, and since it is simpler to have them under a single contract, he recommends leasing through a dealer who can supply different appliances and brands.

Planned preventative maintenance

Prevention is always better than cure and planned preventative maintenance (PPM) can limit costly downtime or huge replacement costs while ensuring equipment runs efficiently and safely, says Steve Buckmaster, director of sales at Brita Professional.

"Brita research found that 38% of kitchen professionals spend three to five hours dealing with equipment breakdowns each month. On top of this, 82% of hospitality professionals say they've had to spend money on unexpected equipment repairs and, for 24% of businesses, this equates to up to 10% loss of sales per month," he reports.

Outsourced water filter management will increase the longevity of water-using equipment by reducing the damage and inefficiency caused by limescale build-up, says Buckmaster.

Warewash specialist Hobart recommends PPM to keep operators safe and compliant, and to save them money and time. "We often see downtime reduced by up to 20% when our proactive maintenance approach is adopted. Revenue lost through equipment downtime is always more than the cost of doing a bit of maintenance," notes Keith Mackie, managing director at Hobart Service.

"The time and cost to repair equipment on the hoof is three to five times more expensive than the cost of making a planned corrective repair of the same equipment prior to failure," reports Karl Cundill, partner at catering and facilities management consultancy Litmus. To implement PPM effectively, he suggests creating an asset register to establish the residual life of an appliance and then creating a forward maintenance register to calculate the maintenance required over its remaining service life.

Paul Anderson, managing director at Meiko, argues that using separate, specialised maintenance for warewashing is vital: "Dishwashers are among the most complicated of kitchen equipment, requiring engineers to be qualified in multiple disciplines including electrical, mechanical, gas and plumbing," he explains.

Meiko offers a 96% first-time fix rate, and guarantees an on-site visit within eight working hours (or four hours under special arrangements). It also maintains multiple dishwash brands for key account contracts.

Rational offers three levels of service packages. Lohse adds that these can also ensure that specific annual safety requirements are met, such as gas safety.

"A PPM backed by a connected platform, such as Connected Wash, is the very best service and maintenance solution, as the service provider monitoring the equipment can often fix potential problems before breakdown – and because they know what to expect, they can bring the right spares to ensure a first time fix," says Crowley at Winterhalter.

Pre-planned PPM visits can be scheduled to suit the site and Crowley views lockdown as the ideal time to book a service call to pre-empt any problems when sites reopen.

Brita's research found that while 30% of hospitality workers are more cautious about equipment costs and are keen to mend and maintain where possible, 17% of professional kitchens have actually reduced their service and maintenance budgets and 65% would buy new equipment if theirs broke down.

The FEA is concerned that operators postponing service visits and PPM calls are putting staff and customers in danger, risking costly equipment failures and creating serious problems for the industry in the coming months. "If the delays to PPM mount up too much, service providers simply won't have the capacity to reschedule all the missed visits once operators come to their senses," says Malcolm Skinner, chair of FEA's service providers group. "We need to keep equipment working safely and efficiently – and that means keeping up with the servicing, too. Delays to PPM are a short-sighted solution that could be disastrous."

Alternative finance

A lease is a contract to pay for the use of one or more appliances over a period of time – typically one to five years. According to the FEA Guide to Leasing (www.bit.ly/3s4rLsz) it's a tax-efficient way of spreading the cost of new equipment that aids cash flow and does not affect other credit lines such as bank loans and overdrafts. Ownership There is often an option to buy the equipment at the end of a lease. Ownership is guaranteed at the end of hire purchase, but not with rental (aka, an operating lease).

Upfront costs They are low for leasing and rental, while hire purchase requires a deposit.

VAT While VAT on the cash price is due upfront with hire purchase, VAT is charged on each lease payment and is fully reclaimable.

Insurance Operators will need adequate insurance on leased equipment, or must pay ‘asset protection' alongside the lease.

Fees Documentation set-up fees average £150 while annual service fees average £30 (all ex-VAT).

Fuss-free fizz

Air Products' Carbstore system of supplying carbon dioxide for drink dispensers dovetails neatly with the need for outlets to operate within social distancing guidelines with reduced staff numbers.

Carbstore uses a fixed-installation C02 tank with an externally positioned remote fill-point that can be filled any time, night or day, without any staff required on-site. Air Products remotely monitors gas levels and functionality in the tank to schedule automatic deliveries that enable more sustainable route planning.

The fixed tank eliminates the need for staff to manually change heavy gas cylinders, reducing touch points and the risk of injury. Its low gas pressure (16 bar against 200 bar for cylinders), also reduces the potential for high-pressure accidents.

Suppliers

Brita Professionalwww.brita.co.uk/news-stories/professional/managed-services

Foodservice Equipment Associationwww.fea.org.uk

Hobartwww.hobartuk.com

Hoshizakihttps://hoshizaki-europe.com

Litmushttps://litmuspartnership.co.uk/services/facilities-management

Meikowww.meiko-uk.co.uk

Rationalewww.rational-online.com

Synergy Grillhttps://synergygrill.com

Winterhalterwww.winterhalter.com/uk-en

Continue reading

You need to create an account to read this article. It's free and only requires a few basic details.

Already subscribed?

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Check mark icon
Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.

close

Ad Blocker detected

We have noticed you are using an adblocker and – although we support freedom of choice – we would like to ask you to enable ads on our site. They are an important revenue source which supports free access of our website's content, especially during the COVID-19 crisis.

trade tracker pixel tracking