LOOK BEYOND THE PRICE TAG THE REAL COST Revenue BUILDERS // Price vs. Value
By Michael Giacinto
A $1,600 refrigerator can look like a much better deal than a $4,000 refrigerator. Seven years later, the math may tell a different story. That difference is easy to miss because the purchase price is sitting right there on the quote. Repairs, replacement costs, lost food, downtime, and day-to-day operating expenses aren't nearly as obvious. In my 25 years working with restaurant equipment, I've had plenty of opportunities to see what holds up and what doesn't. I've also seen where spending more makes sense and where it absolutely doesn't. Sometimes the less expensive choice is perfectly capable of doing the job. A higher price doesn't automatically make something a better buy. The real question is what that equipment will cost once you start using it. WHEN CHEAPER COSTS MORE Let's go back to that refrigerator. For comparison, assume the $1,600 refrigerator has a two-year warranty and dies the day after the warranty expires. Yes, that's awfully convenient for the math, but stay with me. Over seven years, replacing it three times would cost $4,800. Add three $200 service calls and $500 for spoiled food each time, and the total comes to about $6,900. A $4,000 refrigerator with a seven-year warranty, using those same assumptions, comes to about $4,700 after one service call and $500 in lost food. That's a $2,200 difference on a single refrigerator. And refrigerators have a wonderful sense of timing. They don't usually die while someone is standing there watching them. It's after you turn off the lights, lock the doors, and go home. By morning, you may have lost the refrigerator and everything inside it.
Then there's the repair itself. Some lower-end equipment uses imported parts that may take weeks or even months to obtain. Saving money on the refrigerator isn't much comfort when you're spending the next two months figuring out how to operate without it. BUILT FOR REAL LIFE Cabinetry doesn't have a compressor or a warranty full of fine print, but the same thinking applies. Back-bar cabinets live a rough life. Water gets on them. Drinks spill. Employees lean on the doors. Some sit on them. Those of us who aren't quite as young as we used to be may even grab a cabinet door for a little help getting up from a crouch. The point is cabinetry in a center takes more abuse than you might expect. Construction choices can affect how long it lasts. In food-and-beverage areas, we typically specify marine-grade plywood rather than particle board and use heavier-duty hinges. Marine-grade plywood is better suited to the moisture that comes with the environment, while particle board can absorb it, swell, and eventually need to be replaced. You might save several thousand dollars on back-bar cabinetry upfront. But if a $5,000 cabinet has to be replaced repeatedly, the bargain disappears pretty quickly. Spending roughly $10,000 to $12,500 on cabinetry designed for a much longer life can cost considerably less over time. THE OIL ADDS UP Fryers are near and dear to my heart. I realize that's an odd thing to say about a fryer, but the numbers explain some of the affection. Take a bank of three fryers, each holding about 65 pounds of oil. At today's prices, a complete oil change for all three can run around $200. If you're dumping that oil every week, the cost adds up quickly.
IBI magazine // November 2026 8
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