Restaurant POS Systems: Lease or Buy the Right Point-of-Sale Terminal?

By Joanna Furlong
Business.com / Technology Solutions / Last Modified: September 13, 2017
Tuthelens/Shutterstock

It may not be necessary to invest in owning your restaurant's point-of-sale terminals. Consider the benefits of leasing as well as buying.

While a lot goes into any new restaurant setup, a point-of-sale system is a must. The right POS system gives you total control of your restaurant's operations, including sales reports and transaction-level details. It can even give you insights into which items on the menu are hot sellers, allowing you to adjust your menu as necessary and experience more efficient inventory management. 

In today's digital age, there's no reason not to invest in POS technology. The benefits of streamlining operations and offloading manual tasks alone justify it. That leaves the question of whether you should buy or lease your POS equipment.  

The case for buying your POS system 

"Typically, if a company has the budgetary resources and plans to have the equipment in service for several years (typically three to five, and in some cases up to seven), this often leads to a decision to purchase the equipment upfront," said Bert Bertagna, chief technology officer of Bloomin' Brands. Bloomin' Brands is a global casual dining restaurant company with brands such as Outback Steakhouse, Carrabba's Italian Grill, and Fleming's Prime Steakhouse & Wine Bar in its portfolio. 

If you're confident your restaurant is going to stick around and want a POS system for years to come, buying is a no-nonsense decision. With full ownership of the POS hardware, you can leverage it for far more than just point of sales. Take tablets, for example. While you may have purchased them just for your POS system initially, if you own them, you can also use them for guest interaction or back-of-house needs. Ownership also gives you the ability to be flexible – you can use the hardware for multiple software providers and make the switch seamlessly down the line. 

Buying may be a good fit for you if . . .

  • You have the backing and support of a larger brand or restaurant company.
  • You're not concerned with budget.
  • You have a defined, long-term plan for your POS solution. 

Editor's Note: Considering your POS system options? We can help you choose the one that’s right for you. Use the questionnaire below to have our sister site, BuyerZone, provide you with information from a variety of vendors for free:

 

 

 

The case for leasing your POS equipment 

Many new restaurants find themselves on a tight budget, or they may just be wary of the upfront expense required to purchase POS equipment. After all, a recent report reveals that 60 percent of new restaurants fail within their first year. Leasing affords restaurants the flexibility – and ease on their budgets – to be flexible and upgrade later. 

"Leasing may be a good option if the equipment is bundled into a turnkey solution and if there is a fixed period contract for services that are all-encompassing," Bertagna said. "Additionally, leasing may be attractive if a company is planning to transition to newer or upgraded POS solutions at a rapid pace and wants a firm upgrade path built into their agreement." 

Leasing may be for you if . . .

  • You want to avoid the upfront payment for POS hardware.
  • You're unclear on your long-term strategy.
  • You're new on the restaurant scene. 

Other things to consider when evaluating POS systems 

There are more factors that will impact your budget beyond a simple "buy or lease" decision. Bertagna pointed out several other factors to fold into your final decision that will affect your overall POS budget.

  • Have a solid understanding of the hardware warranty. Find out if there are options for extended warranty coverage. Remember, you will need repairs, replacements, and upgrades.
  • Check your trade-in options. These will likely depend on the type of equipment you have and the number of years of service. Some value-added resellers (VARs) will build in a refresh cycle for purchases with a guaranteed trade value, assuming your company will refresh the equipment as part of the contract.
  • Accidents will happen. This could mean substantial costs associated with repairs for accidental damage or loss, unless these costs are built into the agreement.
  • Get clarity on your payment terms, especially if you're planning to lease. Check financing rates, the terms, repair and replacement costs, and the included service-level agreements. 

"Investing in more robust hardware with growth capacity will have a longer life and likely be more resilient over time," Bertagna said. "This will result in fewer failures and in-service replacements and will reduce the number of break-fix support calls and associated costs."

 

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