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Fact #1: hardware repairs and maintenance (R&M) is not the sexiest part of operating a successful restaurant. Fact #2: It's also completely essential to operating a successful restaurant.
Enter 86 Repairs, a firm determined to eliminate maintenance pain problems for restaurant operators. How? By focusing in on the human side of things. It's all about trust and relationships in restaurant repairs and preventative maintenance, and 86 Repairs is here to build those bridges.
As co-founder Joe Gallagher puts it, 86 Repairs is "a 'digital facilities manager in a box' for restaurant operators." The company's goal is to walk restaurants through every step of repairs, help them keep track of assets, and give them key insights about how money is being spent on maintenance. Simply put, they want to make it easy for restaurants to keep on trucking, especially at a time like this.
Back of House spoke with Gallagher and Ariel Upton, head of marketing at 86 Repairs about what the company does, how important the human side of the business is to client success, and how the pandemic is affecting the way operators think about restaurant maintenance.
This interview has been lightly edited and condensed.
Back of House: Give us the basics on who each of you are and what you do at 86Repairs. Ariel, we'll start with you.
Ariel Upton, 86 Repairs: I am our head of marketing at 86 Repairs. I oversee all of our marketing efforts to new prospects as well as all of our marketing efforts toward customers.
BOH: Right on. Joe, what about yourself?
Joe Gallagher, 86 Repairs: I'm one of the co-founders of 86 Repairs, and I head up business development, which has our account management functions, as well as our service provider relationship management. I'm the relationship guy, I guess.
BOH: When was the founding event for 86 Repairs?
JG: Just under two years ago. I spent 10 years of my career dealing with the service and repair of equipment — food equipment, specifically. So if you've ever eaten at a Panera Bread, or stepped into a Kroger or Walmart, all the bread sizes and bagels slicers in the United States are made in Walker, Michigan in West Michigan, and I ran that business unit for a few years.
Parts and service was a part of the business. 30% of the time, a service provider would not be able to show up to the appointment for warranty work, would not have the right tool, would not have the right part or the trade skill necessary to do the job that was in front of them. And I just thought that was a systemic issue — I'm a national 120-year-old manufacturer, I'm working with the biggest brands in food and hospitality, and can't get somebody to do the work a third of the time.
Fast forward — we did the work to figure out what it was like for restaurant operators, the little guy — the Main Street restaurant, the favorite place where you go get brunch — that person has none of the purchasing power, none of the leverage, and none of the time, frankly, to deal with the execution of service repair. It's only worse for them, and so 86 Repairs was born out of that pain and suffering that operators feel managing the infrastructure and the equipment in their locations.
BOH: If you had to explain it to someone who has no connection to this space — what is it that 86 Repairs actually does?
JG: From the moment a client becomes an 86 Repairs customer, they're going to get a world-class digital inventory of all of their equipment. Think of it like an asset locker of everything that's in your house or in your restaurant, digitally transcribed and catalogued. You have a really nice organized list of everything that you have in your restaurant. Then, if anything in that operation breaks, you have one number to call, and we will troubleshoot the issue with you to try to save you from ever having to send anybody out or spend a dollar. And if we can’t get it fixed with you there over the phone, we're going to work with your service providers or our preferred network of service providers to get that fixed for you. And then on the back end, we're going to give you all of the operational insights that you'd want to know about how your money was spent on repair and maintenance so you can make better business decisions.
The 30-second answer is we are a digital facilities manager in a box for restaurant operators. We take the pain and suffering of managing repairs off the plates of restaurant operators.
BOH: When there is a service call and 86 Repairs coordinates with local service people, how does it work?
JG: 60 to 70% of the time, the customer has preferred vendors. They like the guy named Tom, they like a place called Advanced Parts and Service — they like certain relationships that they’ve built. So 60 to 70% of the time, we're going to send out that preferred service provider on behalf of the customer. We're going to call that service provider, we're going to tell them the address, we're going to give them a technical assessment of what's wrong with the piece of equipment, as opposed to saying, “Hey, things are broken!” and just screaming at the phone.
We're going to give them a technical assessment of what's going on with the equipment, and then we're going to schedule the time for when they’ll come fix that piece of equipment. We’ll then communicate that to the need-to-know staff at the location. This could be everybody from the sous chef to the owner operator. Everybody that needs to know knows when that service route is going to show up, knows when they showed up, knows when they fix the problem, or knows when they didn't fix the problem and what they're going to do to fix it tomorrow. All the follow through and execution, 86 Repairs takes off the plates of the operator.
When it's complete, we're going to verify that with the service provider, and we're going to verify it with the customer. There's a double verification for if the problem was actually fixed to the customer’s satisfaction. And then on the back end, all of the invoice transcription, all of the insights of what was replaced is tied to that digital inventory they have of every asset. They can then go back and look at the history of their equipment and their locations and what was serviced or repaired so that the next time something breaks, we can talk about, “Hey, you were just out there three days ago, but there was an issue on this piece of equipment. It looks like it failed again — let's do it again.” We bring a lot of transparency and accountability to an otherwise opaque and inconsistently managed process.
BOH: What can restaurant operators hope to see in terms of their balance sheet when they implement your platform?
JG: Hundreds and hundreds of thousands of dollars have been avoided in costs for our customer base, [and customers see] an over 200% return on investment on the monthly subscription. Pinching a penny is extremely important in restaurants. We are vigilant about hard invoice savings, and 18.3% of the time, over the 10,000 service incidents we’ve managed to date, we were able to troubleshoot the issue without sending out a service provider. We physically solved the problem with the customer before we had to dispatch somebody. Average savings per incident from our state of the repairs report was $520 per service incident. $520 is saved on average every single time, and we're able to do that 18.3% of the time.
BOH: Is that expertise living within the 86 Repairs staff?
JG: We're part counselors [laughs], we’re part technical service repair troubleshooters, and then we're really organized project managers. That's the job of our community managers. Some of the other places that we save money would also be warranty verification. For the customers that we have in over 30 states, I think I can count on one hand the number of restaurants that were able to provide us an inventory log of all their warranty expiration dates. Every single service incident that's tied to an asset at a location has a warranty verification done against it. And those are thousands of dollars saved from verifying something was under warranty. In our research, 20% to 30% of the time, operators dispatch service providers for work that would have been covered under warranty.
BOH: What are the challenges of getting something warrantied without having things in order?
JG: Warranty work has to be done by an authorized service provider. You can't call your favorite [provider] to come out to do that work. You have to call the original equipment manufacturer. You have to sit in their call queue. You have to verify your serial number. You have to tell them when they can come out, and get the authorized service provider for the local area out to do the work.
BOH: Are there prerequisites or benchmarks that your clients need to meet to participate in 86 Repairs, or will you work with anyone? How does that work?
JG: Across the board, it doesn't matter. Our pricing and our service is based on commercial kitchens, and we — knock on wood — haven't been stumped by a piece of equipment or a setup that a customer has chosen to go through to date. Some recent research that we did — for customers with us greater than one year, there was a 26% reduction in monthly service calls per month. We essentially help the customer reduce the number of average incidents that they're dealing with.
AU: It's actually higher — restaurants that are with us for more than one year see one less incident per month, which is actually closer to a 30 to 35% reduction.
BOH: One of the ways that you communicate with the operators is via text. Tell me a little bit about meeting restaurant operators where they like to communicate. Was that something that was intuitive to you?
JG: I think the most important thing we did early is that we did not have the hubris to say we knew where restaurant operators were at. We took an observational research approach from the very beginning, and we just sat in the back of restaurants that were willing to let us watch things get fixed. We would ride along with the service providers and see how they managed things getting fixed. What we saw over and over again is that the restaurant operator industry is one of the hardest-working in the United States. They’re hustling the floor for a missed shift by a waiter or a waitress. They're covering the line when the sous chef is expediting and bussing out food and dealing with the food distributor that came in the back.
We thought we'd build an app when we started this, and by the time we were done with the research, we saw the last thing that the operator needs is another application to forget the password for, to have to download, to have to have a clean internet connection to use. They want to text things off the side of their hip while they’re also pouring a glass of wine for a customer or training that new staff member. They don't want to sit in a call queue waiting 15 minutes for the dispatcher to pick up the phone. 92% of our customer communications are by text, and that was built from the ground up based on that research.
BOH: Ariel, equipment repair is a very necessary but not particularly sexy portion of food tech. Tell us about your work to get the word out and make sure that restaurant operators understand what it is that the 86 Repairs team has built here.
AU: It’s the least sexy part of food tech, but the most essential because you can't have the food without the equipment. And restaurant operators get that. There's a reason that VC-funded tech technology companies have not taken over this piece of the industry yet. In accounts payable, food costs and food ordering, labor management, point of sale, there are companies that have been founded to solve those problems. There are multiple leaders in each of the categories, and some of the categories are inundated. But repairs and maintenance has gone untouched by companies like ours before. That is because, as Joe said, the process is so painful and the trust is so high. If your equipment doesn't work, you can't serve food. The process is painful, and you're still bleeding on this because you haven't used the technology to make this process more sophisticated.
Since COVID has hit, budgets are tighter than ever. Teams are later than ever, and operators that were slow to adopt technology are hungry for it now because it is the only way they can recoup those lost costs. With traditional facilities management software, restaurants have to keep up with the equipment, input the data, log into the applications on the software, so it's still that cumbersome process. So the story is twofold: 86 Repairs is the technology solution you've been looking for in terms of budget and labor. And then the second part: every operator we talk to says the process before 86 Repairs was so painful that they finally reached a point where they knew there had to be a different solution.
BOH: You make a really interesting point about how most of the other sectors in the broader food tech space have been inundated with a lot of products that aren’t very good. So having built 86 Repairs the way your team has, do you feel like you’re better positioned to meet the needs of operators?
AU: Absolutely, and there are other solutions, right? We're not the only ones. We’re drawn up against other companies, but most of them serve cross industries so they're not purely food tech. A big box store has a fundamentally different need than a restaurant, so that solution isn’t going to be the same. We're 100% focused on the restaurant industry and that blend of software and service. Software alone won't solve the problem because the data responsibility on our customer is too high. The service side of it is where the trust is. It’s the human part of the industry. They're talking to another human who has their best interests in mind. They're not completely getting rid of this important part of their business — they still have that relationship with our team.
BOH: What’s on the horizon for you? What are you hearing from your customers and what are you hoping to do in 2021?
JG: The understatement of the year is doing more with less in the restaurant industry. Every single one of our operators has unfortunately furloughed or reduced their staff at the corporate level. They are running as lean as they possibly can. That theme is going to make the perpetual core of our offering more and more valuable. [Restaurants might’ve had] a facilities director before, a tech that was on staff that had a truck there, or big expensive systems in place to handle this. If they choose to [reduce] through their district managers or their general managers, they're going to have the same GMs and DMs floating over more locations. So 86 Repairs’ core offering is selling at a better rate post-COVID because they're doing more with less.
This is the time to talk about preventative maintenance. For every operator that we sat down with, we thought preventative maintenance was gonna be a thing that we would need to get to at some point. We just knew from our research that preventive maintenance is a long term solution to restaurant operations, but it's so hard to get them to deal with it because it’s like that New Year's resolution you never get to. Every year, I'm gonna get on the bike, I'm going to go for the run, I'm going to eat my vegetables... and then you get busy and inundated with the business of life. Restaurant operators are uniquely weakened by how busy their world is. They just never get to preventative maintenance for the same reason they don't have a solution for facilities management. Through 86 Repairs, we handle the quoting process, the decision of who to go with, and the scheduling and rescheduling preventative maintenance visits. The proof of the actual work being done and verifying that it was done to what they agreed is the biggest stumbling block. We literally offer before and after pictures of all key assets. We have a checklist like if you went to your Jiffy Lube or oil change place where you get a checklist that says what needs to be accomplished. We're doing a check in and check out on the preventative maintenance visits so that there’s actual credentialed proof of value and proof of work done on preventative maintenance.
We couldn't be more excited to be launching preventative maintenance because we know that's going to further reduce the cost for operators. And let's face it: everybody kicked the can down the road for six months during COVID. PM is going to be more important to get people back on their feet when there’s full recovery.
BOH: Is there any type of restaurant equipment that you guys do not work on?
JG: The only thing that we don't officially support is IT point of sale systems, so audio-visual equipment, internet payment processing, point of sale. There are just so many other service contracts that are already in place and serving that market.
BOH: 86 Repairs really brings value in a different sphere.
JG: We've gotten cranes out to help customers put new lighted signs on the side of their building. We've helped them get their parking lot lines repainted. We’ve gotten windows that were smashed in riots fixed on that same day. You name the piece of equipment or the infrastructure on that premises, and we're going to work very hard to meet the client's needs because they need it. Something's broken. As an investor said, we are in a delightfully mundane industry. But it is dead serious. It matters. It's really important. You can't hit the baseball over the plate without the bat.