Does anyone know how to go about having a pizza shops equipment appraised? I would like to know the value and life expectancy. Southwest Pennsylvania.
Advise and opinions are greatly appreciated.
Thanks,
Pizzaviking.
Hi Pizza Viking:
We are not an official appraiser of food service equipment ( is there such a thing?) but have often been hired to establish values for estates, bankruptcies, loans etc.
I will be happy to give you my evaluation, no charge.
I can estimate value in an operating shop offered for resale ( tempered by you considering the shops operating volume and or if available profit produced )or as just used equipment offered for resale.
Supply me with a detailed list of equip, name of item, manufacturer and exact nomenclature, date of purchase, any major repairs or up grades.your estimate of operating condition.
Send same to pizzaovens@aol.com
George Mills
- The value is a lot less than you think it is.
- It is worth more in place and working than it is if you try to sell it to be moved elsewhere.
Bodegahwy Hits the old nail right on the head.
Gm
He usually does. Scary sometimes how right he is.
Last pizza place I bought, we got for 50 cents on the dollar…The owner was quite offended when we offered her 50% of her asking price…However, when she heard we were going to start from scratch her tune changed very quick…l
One of the local pizza stores approached me to buy his place the other day he is asking $150 for the place in a leased space. He told me I could just change the sign and I would be set. What he did not take into account is I could do a complete new build out in a better location for that money. His equipment is 6 years old and in need of repair. His location has become known as a place to get drugs and he has no “Good Will” to sell because he is dropping the franchise name. 50 cents on the dollar in this case is still way too much.
I think your best bet is to sell your equipment on Ebay or research what it has sold for. Used equipment just does not sell for much unless you find the right buyer.
I also think if you clean up the equipment really well it makes a big difference.
I’m thinking pizza viking is looking to BUY the equipment, so with that in mind…if you are looking at equipment IN PLACE of the location you are going to open a restaurant you need to consider that in your cost.
For example, buying a used dishwasher, moving and hooking it up compared to buying a dishwasher in place already hooked up.
In one instance you might pay 500 bucks for the used dishwasher and pay a couple of hundred for the move and plumbing.
The 500 dollar dishwasher might be worth 600 to have it in place ready to use.
Just my 2 cents.
Kris
look at ebay not what they have it listed for but what has sold ive seen pizza ovens on there for months / year with someone looking to hit a home run. i just sold a double stack of 1132s elec for 3850.00 on ebay and was glad to get it.people always have em for like 5000.00 buy it now price but there on there forever.we are always peddlin used equipment most wich i get at auction if its pluged in and can see that it works i will pay more than if its just sittin there .but equipment truly has little value when its used unless you can find the right buyer.i bought stuff that i thought i will make a good lick on and you cant give it away. ive bought stuff that i thought was junk and it sells quick .
like the old saying goes theres an a*s for every saddle 
Actually, Im trying to buy a shop, that appers on paper a loser. The store was formerly a Dominos that was bought by the franchisee after his franchise agreement expired. Im having a hard time justifying the sales price( as is my banker) because he showed a business loss and took a very tiny salary last year. Im not considering moving any of the equipment, I want to run and operate the business. I’m but just trying to see that if it turns out to be a loser, what my exit options are (i.e. liqiudation).
This guy has alreay cut his original sale price by 40%. Im thinking it should be more like 60%.
Thanks for the input.
My first store was a failed Papa Johns. I bought the equipment package less than a year old for about 15 cents on the dollar.
The owner’s store sales numbers are meaningless. Both you and your bank should not be spending much time on them. You are not buying a business when the place has failed, you are buying equipment and leasehold improvements and they should cost less than starting from scratch.
Some questions for you:
Are you satisfied that you understand why the dominos failed?
Are you confident you can avoid whatever that problem was?
Dominos has a pretty solid system. They do not let franchise agreements expire on locations they are happy with.
The good news is that the franchise requirements for build-out and equipement mean that you probably have pretty good stuff to work with.
Based upon what I know, the current equipment was new in 1995-1996. What kind of life expectancy would one assume this type of equipment has?
Most of this equipment is past it’s expectancy. I would budget plenty of money for new (replacement) and/or maint. of this equipment.
Things like ovens, mixers and walk in coolers I give a long expectancy but that is assuming they have been well maintained, if he didn’t have the money he was probably reactive instead of proactive when it come to this equipment and it’s maint. Maketables, steam tables etc need to be replaced more often.
How much is he asking for the whole place? What was the original asking price?
Kris
Thanks Kris,
He was originally asking 100K, he’s down to 60K, I’m thinking 40K. What do you think?
hmmm…I think that is a bit high… I mean really take away YOUR FEELINGS AND DREAM OF OWNING A PLACE…and what are you buying?
A business which is failing
A rented location
10 plus year old equipment
When we opened our new place we were able to buy mostly new equipment for 60,ooo. It is a full service place.
So basically your 40,ooo is for equipment. I think you can get him down even further. Is the place still open and operating?
You are clearly taking a headache from this man. What he is doing is not working so he doesn’t get the benefit of $$$ for the business. Just my opinion. He drew a tiny salary and still showed a loss? He is living in a dream world thinking it was worth 100,000 at one point.
You also need to make sure to get an inventory list of exactly what equipment you are buying. Some of the equipment may not be his. I know some people get free equipment for buying product…ie…a dishwasher.
Maybe the another poster will know how to make sure there are no liens on the place. Makes me wonder if he has been paying his vendors and how that all works in the sale to keep you from his “undisclosed” debt.
Kris
Nine years ago I purchased a 100 square foot walk in (roof top cooling unit), a stack of gas fired 40" wide belt MM super 70 ovens with make-up air. 7’ refridgerated make line, all counters and tables, 6 phone intergrated phone system, all racks etc for walk-in and dry goods… all small wares… ALL LESS THAN 1 YEAR OLD for 35K. All in place, all in good working order. The ovens alone would have been 70K without delivery and installation when new.
Im really sorry that we are way off of the original topic.
Kris and bodegahwy your input is truley appreiciated. Here’s one other point I cannot understand.
This shop did approx $350K last year. I dont know if your shops are comparalble, but what do you think it should have cleared.
355 sales less
133 in food, supplies and delvieries plus
237 in operating expenses
I think there is some room to cut expenses.
So the place looses money. The only solid number that can be commented on there is the food/supplies. 37% is really too high. Without knowing other specifics I can not add a lot.
You might buy yourself a job at that level. 355K can be a profitable store depending on rent and other key expense areas, but that is not enough sales to provide comfortable cushion beyond paying someone to run the place. If that someone is you, it can be a good base to build from.
Good luck with whatever course you choose.
What do you all feel is good percentage of food costs should be on a store doing these numbers?