The year is 2024. You’re the Chief Operations Officer for a growing restaurant group, and lately you’ve been focused on the macroeconomic challenges of rising food and labor costs. As you finally catch a moment to review your P&L, you’re faced with another issue: repair costs are out of control, too. 

This is not a drill. Service costs have increased by 8% since the start of the calendar year and a stunning 31% since 2021, based on operator invoice data. 

Before you raise your hands in despair, there is a silver lining: R&M is a controllable cost to your bottom line. There are clear, proactive steps you can take to combat this increasing expense to add some needed growth to your profit margins. 

In this blog post, we’ll explore why repairs are getting more expensive and what you can do about it. 

Repairs are getting more expensive. Why?

There are two primary reasons for the growing cost of repairs: 

1. Fewer trained technicians in the market
2. Parts cost more

Let’s explore these in more detail. 

Skilled Trades Labor Shortage

The rumblings are true—there is a shortage of skilled technicians in the workforce, including R&M technicians. This shortage has been developing for years and has many contributing factors, including: 

• A retiring generation: The baby boomer generation is retiring, and in doing so, is leaving a gap in the workforce that is difficult to fill. USA Today cites repairs and maintenance as an industry that ranks among the hardest hit by this shift in the active workforce. 
• Advancing technology: As technology becomes more sophisticated and embedded in restaurant operations, the skills required for technicians have changed, creating a skills gap. Equipment is becoming more complicated to fix.
• Lack of awareness: Fewer young people are pursuing technical careers because of a lack of awareness and appreciation for them. In Stanley Black & Decker’s Makers Index—a survey exploring what’s keeping new workers from skilled trades—key findings include vast underestimation of potential earnings in skilled trades, along with low exposure to skilled trade careers. 
• Pandemic aftershocks: The COVID-19 pandemic significantly disrupted the supply chain for parts, along with the people participating in the repairs and maintenance workforce. For these reasons, the pandemic continues to contribute to the shortage of skilled repair technicians. 

The labor shortage makes it harder to attract and retain trained workers, which can lead to longer wait times and higher prices for consumers.

Rising Cost of Goods

The cost of repair parts has been rising for several years. Based on market data, 86 Repairs estimates that restaurants spend about $28 billion on R&M, and an additional $35 billion is spent on new food and beverage equipment every year. Here are some reasons why those numbers continue to rise: 

• Supply chain issues: The pandemic disrupted global supply chains, causing shortages of various equipment parts, along with aluminum, and steel. These shortages lead to production delays and increased prices for raw materials and transportation, some of which have subsided in recent quarters. 
• More complex equipment: Newer equipment is often more high-tech and has features like sensors, control boards, or even robotics that can make repairs more difficult. 
• Inflation: The cost of all types of goods has increased, and inflation has also contributed to rising repair costs. 
• Labor costs: Some say that an aging workforce and higher pay for new hires are also contributing to higher repair costs. Service providers may be raising prices in order to retain employees and pay them more. 

5 Tactics to Combat Increasing R&M Costs

Now that we’ve got some clarity on the rising cost of repairs, let’s explore a few ways you can clap back. Check out our blog post, The Hidden Costs of R&M, along with the five tactics outlined in this section, which are free, proactive approaches to managing R&M (and the costs that come with it). 

1. Take time to troubleshoot. This is the R&M equivalent of the classic IT advice to turn a device off and then back on again. Is your cooler running warm? Before you panic, check to see whether a power cable was knocked loose or your circuit breaker needs resetting. Defrosting refrigeration equipment can also sometimes get a unit back up and running. A quick pulse check of common culprits can save you hundreds of dollars per incident on an unnecessary service visit. In fact, troubleshooting and warranty coverage saved 86 Repairs customers a collective $5.4 million on dispatch avoidance in 2023 alone. 
2. Double check warranties for covered costs. After troubleshooting, if there is truly an issue, you may still have some quick cost savings within reach. An equipment warranty check will show you whether part or all of the needed repair is covered by the manufacturer. There is real savings potential here. For example, since January 1, 2024, 86 Repairs customers have saved an average of $970 per repair in HVAC service costs thanks to warranty coverage. 
3. Prioritize clear communication. Admittedly, this is easier said than done. Restaurants are bustling (see also: chaotic) places. It’s easy to lose critical information about on-going service requests between rotating managers on duty, technicians who actually perform repair work, and the administrative employees answering the phone for a service provider. A clear, documented process for request tracking and record keeping will go a long way in ensuring repairs are fixed correctly the first time a technician is dispatched, and that the invoice was accurately billed and processed within a reasonable timeframe. 
4. Watch for equipment “lemons.” As with a motor vehicle, restaurant equipment can also be a “lemon,” or something with a significant defect or malfunction that will cost you more to repair over time than to replace entirely. Related to the previous tactic in this list, lemon identification is possible with the right R&M process and records system in place. Documentation will help you make informed decisions about repair work vs. replacement when you are repeatedly spending money to fix the same equipment and issues.
5. Maintain a healthy vendor mix. Especially in an emergency situation, it’s nice to have a go-to service provider for certain repairs. However, your go-to vendor for hotside equipment repairs might not always offer the best first-time fix rate (FTFR) or the most competitive pricing for service work.

Case Study

For one quick service restaurant brand experiencing plumbing issues, 86 Repairs uncovered $116,000 in annual savings through simple changes to the facility that would avoid unnecessary service visits. For the same customer, 86 Repairs’ analysis of their vendor mix showed that an equipment service company providing the same quality of service in their market was charging about $200 less per invoice than the vendor they’d previously preferred. Without comparing multiple service providers, this operator was hemorrhaging over $5,000 more per year for the same service.   

Conclusion

Hospitality will always be a balance between challenging and rewarding. It’s simply part of an industry with multiple, uncontrollable factors, patrons included. However, restaurants remain an essential part of the cultural fabric in the 21st century. Demand—and the resulting rewards—are ripe for the taking for those willing to stay flexible and uncover the opportunities embedded within the industry. 

If you need help proactively managing your R&M, consider 86 Repairs! Our team offers service when you need it and software when you don’t, through both full-service and self-service solutions. Whatever support level is best for you, our goal is to take repairs off your plate. Request a demo today to learn more.