Unique challenges surround HVAC work in eating and drinking establishments.
Based on the National Restaurant Association’s calculations, you’ll find more than 1 million restaurant locations throughout the United States—a sizable potential market for commercial repair and maintenance services. Restaurants and bars, however, are not your average commercial customers.
“Restaurants have a lot of equipment, in a small space, that gets a lot of use and is treated pretty rough,” says Karim Nice, president of Blue Hat Mechanical in Apex, NC. “We definitely visit them more often than office buildings, and they have more service work per location than other types of businesses.”
Much of that service work stems from the greasy exhaust emitted by fryers and cooktops, which gets pulled into air conditioners. “We need to do a lot more coil cleanings, compared to other customers, and it can take a substantial effort to get those coils degreased if we’re working on the roof,” adds Nice, whose firm does more than half of its business in restaurants and bars.
Aside from the greasy work that’s often involved, working in the restaurant space will affect your business in several areas:
The ability to open or continue operating a restaurant depends on passing regular inspections by the local public health department. Although local laws will dictate the frequency and focal points of such visits, in general health inspectors want to ensure safe food handling procedures are being followed.
“That means cleanliness of the equipment is a huge issue,” says Brad Taback, president of Climatech in Pittsburgh, PA. “The technicians always have to be thinking about the end consumer, even though that’s not your direct customer. The restaurants’ patrons can ultimately be affected by the work you do.”
Refrigeration also plays a big role in health inspections, says Nice, because walk-in coolers and freezers must operate at temperatures that maintain a safe food inventory. He adds, “Restaurants often get flagged in health inspection reports for things like torn gaskets, rusty shelves, or doors that don’t close properly, so we address those things, too. It’s not super-technical work but it needs to be done to pass inspection.”
Blue Hat Mechanical, in fact, encourages its restaurant customers to snap and e-mail a photo of their health inspection report. That way, the company’s technicians can ensure they have all the needed parts on the truck and make all the required repairs in one economical trip.
Most restaurants serve lunch and dinner and, for both health and safety reasons, don’t want a technician cleaning fan coils or repairing the evaporator in the walk-in cooler while food is being prepared. Even when they remodel, restaurants typically don’t want to risk losing business by closing down. As a result, much of their HVACR work must happen outside the 8-to-5 schedule often favored by other commercial customers.
“It’s tough on staffing when you have to schedule people to work from midnight to 7 or 8 in the morning, but that’s how the restaurant industry works,” notes Taback, whose firm often remodels restaurants after hours. “It’s more difficult and time consuming, because you have to clean up every night so the restaurant looks like nobody was there.”
Adds Nice, “Fast food restaurants open 24 hours a day are an especially big challenge, because they’re busy all the time, even in the middle of the night.”
And, while timely repair service is important to all customers, any delay could threaten a restaurant’s livelihood. “It’s important to respond quickly to any emergency,” Taback observes. “If you have a cooler or freezer that’s down, the product can spoil if the temperature gets below a certain level and cost the restaurant a lot of money.”
Training and experience
Given the many brands and types of restaurant equipment—from small under-counter refrigerators to large freezers and ice machines—knowing how to service them all takes the expertise born of at least 15 years of experience. “It’s not trivial to make the leap from working in HVAC to refrigeration,” says Nice. “And you can’t have people learning on the job because restaurants really won’t be happy if it takes three trips to fix their ice machine.”
Experience also comes into play in solving the issues that often bedevil eating establishments, such as preventing food odors from seeping into eating areas. Make-up air must be introduced into restaurants to replace the heavy exhaust from griddles, dishwashers, and other equipment in commercial kitchens.
“It’s a science to get a restaurant balanced properly so you can maintain a slightly negative kitchen, to keep odors in, but not affect the comfort of the patrons,” Taback says. “You need trained technicians who really understand what they’re doing—and that takes time and experience.”
Both Blue Hat Mechanical and Climatech work with individual establishments, local franchisees of national fast-food restaurants, and regional chain locations. Figuring out—and marketing to—the appropriate person in each type of restaurant can take some detective work. For example, says Nice, fast-food restaurants may have numerous managers who move between locations; the person placing the service call may not even work at the location in question.
In Nice’s experience, restaurant chains tend to use facilities management firms, which add an extra layer of paperwork and bureaucracy to vendor selection, scheduling, and payment. The firms often require HVAC firms to work for a set hourly rate and might cap pricing for parts and refrigerant. Also, says Nice, “Because their business model is to get paid by the restaurant before they pay us, the payment terms often stretch to 60 days or more.” On the other hand, becoming a preferred vendor for a facilities management firm can lead to more business with its other restaurant clients.
While it’s much easier to identify the decision maker in owner-operated establishments, such mom-and-pops are often reluctant to spend money on regular maintenance and even some repairs, says Nice—particularly if they are start-up operations and leasing space. “Owner-owned restaurants are especially sensitive to every invoice and want to know why it takes you so long to do something,” he observes.
“The restaurant industry has a fairly high failure rate, so do some research first—make sure the restaurant is financially solid and pays its bills on time,” advises Taback. “There are plenty of bars and restaurants where the doors shut before you know what happened.”
In fact, research conducted by Cornell University and The Ohio State University indicates that about 30 percent of restaurants close each year, with a failure rate between 50 and 60 percent within the first three years; the smallest restaurants have the highest failure rate overall. Blue Hat Mechanical, which has had some restaurant customers go bankrupt, now asks for a credit card before doing work for mom-and-pop restaurants; it extends credit to those that pay their bills regularly for at least six months.
The good news is that restauranteurs are good networkers. Taback says, “If you do a good job for someone, they’ll probably pass your name along to other owners. Customer referrals are one of our two main sources of getting business.”
If a restaurant succeeds, that business relationship can continue for many years. Just ask Brad Taback: Climatech has been providing HVAC services to one regional restaurant chain based in western Pennsylvania for the last 30 years.
While there are some challenges with working in restaurants, it’s definitely a market that can pay big dividends through relationship building. By following the advice from these top contractors, and proceeding with care you can find success in this market.