Houston-based Luby’s Inc. said it intends to dissolve the business, sell all of its 77 Luby’s Cafeterias and 30 company-owned Fuddruckers and distribute the proceeds to shareholders.
The company decided not to restructure or file for bankruptcy but rather liquidate.
And when a restaurant decides to call it quits, it has a few options. If it owns the building, it can usually sell the real estate.
“Restaurants don’t have that many transaction-specific assets,” said Haragopal Parsa, professor of lodging management at the University of Denver. “That means the restaurant building can be converted to something else very easily.”
But what about the tables, chairs, stoves and knives? That depends on what the new owner intends to do with the building. If it’s going to be another restaurant, they’ll probably just include that restaurant stuff in the deal.
Or they might call Greg Christian to help get rid of it. He runs Auction Masters in suburban Minneapolis. He said after he gets together with the business owner and maybe a banker and a landlord, they set an auction date. And a lot of other restaurants are in the market for used restaurant equipment right now.
“It’s the small guy, upgrading, changing things, changing their venue, whatever they’re trying to do to stay alive in this market,” Christian said.
A few things are getting top dollar right now.
“Umbrellas this summer. Wow! I’ve never seen umbrellas go so high,” he said. “Or any patio furniture. Oh, my goodness! Those prices are high.”
Expanding a restaurant’s patio, if the city and landlord allow it, has become the go-to move for sit-down restaurants.
There’s another strong market for used ovens and grills: the nonprofit sector, like soup kitchens and food banks.
“These people have been cooking food for those who are in need for food, and so, yeah, they’re places like that that can use used equipment,” said Amit Sharma, director of the Food Decisions Research Laboratory at Pennsylvania State University.
And because so many restaurants are struggling and might have to liquidate soon, he said a lot of that equipment still has some life in it.