Behind the Closure of Restaurants: The Reality of the Digital Era as Reflected in the Secondhand Equipment Market

A 20,000-square-meter secondhand restaurant equipment market in Yanjiao, Hebei Province, China, offers a stark reflection of the realities of restaurant closures. According to a June 26, 2026, report by Huxiu, the market, operated by secondhand restaurant equipment buyer Gou Ge, houses equipment from approximately 7,000 failed restaurants. This scene vividly illustrates the low success rate of restaurant startups and the transformation of market structures driven by digital platforms.

Equipment from 7,000 Failed Restaurants

Gou Ge operates five large-scale secondhand restaurant equipment markets, storing contact information for 120,000 restaurant owners on eight smartphones. The Yanjiao market is the largest, with its 15,000-square-meter display area neatly organized with slicers, boiling ovens, microwaves, and other equipment categorized by type. According to Gou Ge, “When we take over an entire food court, dozens of kitchens are brought in all at once.”

Behind each piece of equipment lies a failed restaurant. Slicers come from hot pot and barbecue restaurants, while microwaves often originate from delivery-only outlets serving prepared foods. In some cases, delivery-only restaurants installed as many as eight to ten microwaves per location.

The Short-Lived Nature of Trendy Categories

The data from the secondhand equipment market underscores the shortening life cycle of food and beverage businesses. According to Gou Ge, the categories most frequently purchased this year include traditional formats such as hot pot and barbecue. Meanwhile, buffet and bakery establishments have emerged as new major categories of closures. Many buffet restaurant appliances have been used for less than a year. Similarly, while bakery equipment previously deemed “in good condition” typically had a usage period of two to three years, this year’s inventory consists mostly of equipment used for only a few months.

Particularly noteworthy is the short lifespan of “influencer-driven projects” that rapidly gain popularity through social media or information feeds. Gou Ge observes, “Projects that lack historical grounding but suddenly become trendy fade away in one or two months, sometimes even less than a month.” Most franchisees who invest in these trendy categories are beginners with little to no experience in the food and beverage industry.

Losing 700,000 Yuan in Six Months

Gou Ge and his partner, Liang Zhiqiang, speak candidly about the realities faced by beginners venturing into restaurant startups. Liang Zhiqiang notes, “The scariest part is that beginners with no business experience don’t view food and beverage as a business.” Many cases involve delivery drivers or full-time homemakers who invest their savings to start a restaurant, inspired by the apparent success of popular eateries.

The report highlights the case of a franchisee who ran a beef rib buffet restaurant. “I lost 700,000 yuan in less than six months,” the owner lamented. Despite having prior experience managing multiple franchise brands, he admitted, “I knew it was a trend-driven brand when I joined, but I thought I could recover my investment quickly. It was a gamble.” Reflecting on the experience, he confessed, “Now I’ve lost confidence in everything,” hinting at the severe psychological toll.

Delivery-Focused Models and Downsized Restaurants

The secondhand equipment market data also reveals changes in restaurant formats. The most frequently collected are small-scale restaurants ranging from 10 to 20 square meters, many of which operate as delivery-only kitchens. There is a notable trend of restaurant sizes consolidating around 80 square meters, with equipment purchase costs dropping from the previous norm of over 100,000 yuan per order to under 50,000 yuan for an entire restaurant.

This downsizing trend is attributed to the proliferation of food delivery platforms. Delivery-only kitchen models, which operate without a physical storefront, are expanding, lowering initial investment costs but intensifying competition. Although equipment costs have decreased, the potential losses upon business closure remain significant.

An Unyielding Obsession with Restaurant Startups

Liang Zhiqiang shared insights from interviews conducted at Yanjiao’s night market. Among the 20 people he spoke to, half had previously run restaurants. When asked, “Would you start another restaurant?” the common response was, “Once I’ve stabilized, I’ll try again.” The determination to open another restaurant after earning some income from street stalls remains unshaken.

Xiao Kuan described this phenomenon as akin to “trying to wake someone pretending to be asleep.” Many individuals who lost their jobs in other industries turn to the food and beverage sector in hopes of making a quick fortune. While the industry may appear accessible, it is, in reality, an extremely competitive field with low survival rates. The market has already entered a saturation phase, leaving limited room for new entrants to succeed.

Editorial Opinion

In the short term, this report underscores the vicious cycle of a food and beverage industry where the advent of digital platforms has lowered entry barriers, intensifying competition. As more novice investors chase after trendy categories that go viral on social media, the inventory of secondhand equipment continues to grow, spreading the cost of withdrawals across the entire industry. In the next three to six months, we can expect to see even more similar cases emerge.

From a long-term perspective, the importance of leveraging data in the food and beverage industry becomes evident. To curb low-success-rate startups, it is essential to popularize tools that scientifically analyze factors such as location selection and menu composition. SaaS products offering AI-based demand forecasting and competitor analysis are likely to gain traction in Japan’s food and beverage industry as well. At the same time, there is a growing need for third-party organizations to evaluate the transparency of franchise brands.

The question we, as the editorial team, wish to raise is whether technology can truly enhance the success rates in the food and beverage industry. While data analysis tools and predictive models exist, it is precisely those who lack the literacy to utilize them who need the most support.

References

• Huxiu Reportage — Published June 26, 2026