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Evaluating Long-Term Cost of Ownership for Commercial Refrigeration

Addressing Problems that Matter to Restaurant Owners

Long-term cost of ownership is an essential consideration when it comes to replacing your commercial refrigeration units. It incorporates not only the initial purchase cost, but also potential expenses associated with repair, maintenance, and energy consumption.

Of course, this is not a simple query with a straightforward, easy-to-understand answer. To accurately account for the wide variety of refrigeration brands and their different engineering/manufacturing methods, a number of questions need to be addressed:

  • How much energy will the unit consume?
  • How often with the new unit fail?
  • What will the repair costs be for each failure?
  • How often will scheduled maintenance be needed?

Providing ROI Solutions Through Data Analysis

To provide the data needed to answer these questions, Chain Restaurant Solutions has been tracking the performance, failures, associated costs, etc. of refrigeration equipment for more than 10 years. To ensure data accuracy, the location of the observed units encapsulated a wide array of operating conditions, mostly in fast casual and QSR operations across the US.

The resulting information focused on four of the major commercial refrigeration brands and provided many extremely helpful insights, one of which is that, over the first 10 years of a self-contained refrigeration unit’s lifespan, the average failure rate per year is 32.7%. In other words, almost 33 of 100 units (on average) will experience some sort of failure each year of the first 10 you own it. The average cost for these repairs? $374.

To put this in context over a 10-year span, imagine you own a 100-outlet operation with 600 pieces of refrigeration equipment spread throughout your locations. Depending on the brand of refrigeration, your R&M spend over a 10-year period could range from $40,000 to $120,000. If you assume an average cost of $2,000 for a new unit, you could have replaced 20-60 units in that timeframe instead.

The factors found to be most influential in the failure rate variance were operating conditions, preventative maintenance frequency, and brand. While not 100% inclusive, our data clearly indicates that making an informed decision at the time of purchase can drastically affect your return-on-investment.

That’s where Chain Restaurant Solutions can help. Along with our facilities and asset management programs, we are also fully equipped to help you make a decision regarding your next equipment purchase. Based on your location, restaurant-type, and other associated variables, we can provide a unit recommendation that is the best fit for your business and budget.

A Closer Look at the Data

Avg Units Avg Annual Failures Avg Failure Cost
Brand A 396 20.40% $327.31
Brand B 285 43.90% $454.60
Brand C 329 40.20% $387.96
Brand D 1092 26.30% $326.74
Total/Average 2102 32.70% $374

CRS is Your One Source Solution

Improve your capital management with our "Help Desk" support for troubleshooting, calling contractors for breakdowns, reviewing invoices for accuracy and compliance with terms, warranty capture on equipment and facility along with equipment tracking and reporting.
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Chain Restaurant Solutions

Address: 6201 South Gateway Drive
Marion, Iowa 52302
Phone: (800) 444-8250
Email: info@chainrs.com

Affilliated Companies

CRS is your single source solution for computerized maintenance management. We offer Asset Tracking of all foodservice equipment for warranty tracking, depreciation support and data collection. We also provide Equipment Repair Data Tracking, and PM and Scheduled Maintenance scheduling, tracking, reminders and alerts when work is not completed. We're focused on managing facility and equipment needs to better allow you to focus on management of your employees and increased customer service.