The first thing most restaurant owners get wrong about closing is what their equipment is worth. A kitchen that cost $200,000 to build out does not liquidate for $200,000. It does not liquidate for $100,000. In most cases, a full independent restaurant kitchen liquidates for 10 to 25 cents on the dollar of original cost. Understanding that gap before you close changes how you think about the sell-vs-close decision.
Why equipment loses value so fast
Commercial kitchen equipment depreciates quickly for several reasons: it is heavy and expensive to move, it requires professional installation, it is often customized to a specific space, and the market of buyers is narrow. A buyer for a used 60-quart mixer or a 10-burner range is typically another restaurant operator, a used equipment dealer, or an auction buyer -- not a general consumer market.
The National Restaurant Association estimates that equipment and fixtures represent 15 to 25 percent of the total investment in a new restaurant build-out. The liquidation value of that same equipment at closure is typically a fraction of that figure.
Your three options
Private sale gives you the highest return but requires the most time and effort. You list individual pieces on platforms like Craigslist, Facebook Marketplace, or restaurant-specific marketplaces, and you handle inquiries, showings, and logistics yourself. For high-value individual pieces -- a commercial convection oven, a walk-in cooler, a high-end espresso machine -- private sale can return 30 to 50 percent of replacement value. For commodity items like sheet pans, smallwares, and basic prep equipment, private sale is rarely worth the time.
Used equipment dealers will buy your entire kitchen in a single transaction, which saves time but reduces your return. Dealers typically pay 10 to 20 percent of replacement value and resell at 30 to 50 percent. If you need to vacate the space quickly or do not have the bandwidth to manage individual sales, a dealer is a reasonable choice. Get quotes from at least two dealers before accepting an offer.
Auction houses specializing in restaurant equipment -- companies like Heritage Global Partners or regional restaurant auction firms -- can move a full kitchen in two to four weeks. Auction returns vary widely: a well-attended auction in a market with active restaurant activity can return 20 to 35 percent of replacement value. A poorly attended auction in a slow market can return less than 10 percent. The auction house takes a commission of 15 to 25 percent of gross proceeds, which further reduces your net.
What is actually worth money
Not all equipment liquidates equally. Items that hold value best: commercial refrigeration (walk-ins, reach-ins, prep tables), commercial dishwashers, high-BTU ranges and ovens, hood systems in good condition, and specialized equipment with a narrow but active buyer market (wood-fired ovens, specialty coffee equipment, commercial smokers).
Items that liquidate poorly: smallwares and utensils (pennies on the dollar), custom millwork and built-in fixtures (often worth nothing to a buyer), POS hardware (technology depreciates fast), and anything that requires specialized installation.
Equipment under lien
If you financed any equipment through a loan or equipment lease, the lender has a security interest in that equipment. You cannot sell it without satisfying the lien first. Before you list anything for sale, pull your UCC filings to identify what is encumbered. Your attorney or a title company can do this search. Selling encumbered equipment without disclosing the lien creates legal exposure.
The timing question
Start the liquidation process before you announce the closure publicly if possible. Once word gets out that a restaurant is closing, the negotiating leverage shifts to buyers who know you are under time pressure. If you can begin private sales of high-value items while still operating, you will get better prices.
If your lease requires you to leave the space in broom-clean condition, factor in the cost of removing equipment that does not sell. Some items -- built-in hood systems, custom millwork, walk-in cooler boxes -- may cost more to remove than they are worth. Negotiate with your landlord about what stays and what goes before you start the liquidation.
The sell-vs-close calculation
Equipment value is one factor in deciding whether to sell the business or close it. A buyer who takes over the space and assumes the lease also takes the equipment -- which means you do not have to liquidate it at all. Even a low-price sale of the business may net you more than the combination of a lease buyout and equipment liquidation. The sell vs. close article walks through that math in detail.