Equipment Appraisal Blog | Understanding Machinery Appraisals

Someone once advised me that when you're in the restaurant business, change is inevitable. This was originally intended to mean the frequent need to shift suppliers, update your menu, and constantly train staff, among other things. Today it means a whole lot more than that, with the goal of survival and long-term profitability at the forefront for many restaurant owners due to the COVID pandemic. Kitchen, dining, and bar equipment, commonly referred to as FF&E (furniture, fixtures, and equipment) can assist restaurant owners with obtaining new capital, restructuring loans, and help expand a growing business.

A restaurant FF&E appraisal will support the value needed for these situations

Restaurant appraisals are commonly requested by banks and other lending institutions for owners, potential buyers and sellers when assessing loan amounts or restructuring existing debt. The value of your overall restaurant business probably has a small amount of that value on the books associated with the FF&E. As long as your equipment has been well maintained and is in good condition, an updated appraisal will most likely support an increase to the tangible asset component of your operation, and will, in turn, increase the overall value of your restaurant.

Leveraging these assets in conjunction with the value of your intangible goodwill can maximize the amount of capital you may be able to borrow in any of these financial situations.

When you are ready to get an FF&E appraisal for your restaurant, always seek out an experienced, accredited equipment appraiser, as their credibility, and that of the valuation firm they represent, goes a long way to supporting the concluded values estimated in the report. Most banks and lending institutions will require a fully documented and researched analysis as part of the valuation effort.

You can ask the appraiser to quote the work either as a visual on-site inspection or as a “desktop” appraisal depending on the level of data you have available for review and your cost budget. You should request the valuation be under a Fair Market Value premise, assuming the restaurant remains in operation, and potentially a more conservative orderly liquidation value if the bank is looking for a “best case, worst case” scenario.

By having a restaurant equipment appraisal performed on your associated FF&E, you can also better determine the overall value of your business if you decide to sell.

When you are ready to move forward on an appraisal of your restaurant FF&E, contact us at Equipment Appraisal Services. Our fully accredited and experienced appraisers are well prepared to provide you with everything you need.

The restaurant industry has certainly been one of the top business segments to suffer during the COVID-19 pandemic over the last six months, with indoor dining options still not allowed in certain locations and most others facing limited capacity with stringent and costly guidelines to adhere to.

If you are a restaurant owner thinking of selling or are considering investing in one knowing the market will eventually open up again, you will need to make a sound decision armed with as much ammunition as possible. Part of your arsenal should include a current market appraisal of the furniture, fixtures and equipment, commonly referred to as FF&E.

An accredited ASA (American Society of Appraisers) appraiser will provide a detailed valuation including the kitchen equipment, bar and seating area assets and any other supporting tangible items involved in the day to day running of the restaurant. An appraisal can be completed as an on-site visual inspection of the equipment or as a “desktop” valuation based on the descriptions and photographs you provide to the appraiser.

Whichever direction you’re heading, Equipment Appraisal Services can assist you in the process and provide an independent opinion of value which can help form a realistic purchase or sale price for the business, and support the information needed to potential investors, financial institutions, insurance companies and other parties involved in the project. Our experienced, accredited appraisers have been completing these types of fully researched valuations for decades and have the depth of knowledge and experience to meet the demand of today's challenging market.