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Buying an existing route


interfuse

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I have been talking with someone in our area with a vending route consisting of snack, soda and combo machines at a total of 47 locations. The machines total are grossing $115,000 per year. His asking price is $145,000 and there is an additional total of $51,000 in financing (debt) with 7-up that he says would be passed on to us.

 

I know what my initial thoughts are but I want to know yours as I currently operate 0 vending machines. :)

 

Looking forward to your comments.

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way too expensive!!! One way some value a route is 1x the gross sales. With that method the route should be priced at $115,000 with zero debt, but I think that is still even too high. There are other variables also that help determine what would be a fair price such as what brand and model the machines are, how much money is he actually making (prices could be too low), how spread out the route is geographically and how much if any commission he pays plus usually a few more factors that pop up. I also think that a route that size might be too much for someone just trying to start out, but that all depends on you and how organized you are and how mechanically inclined you are. I would also want to see evidence of all his numbers and at least one route service ride along with him before anything else

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#1

Make Sure they own all the equipment!

cause if it's loaned from a bottler or leased, or being paid for on payments,

You don't have legal rights to them.

 

#2

don't buy a route that's mostly cheap older machines,

or business opp machines,

because a lot of them went out of business and parts and repairs might be hard to come by.

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I have been talking with someone in our area with a vending route consisting of snack, soda and combo machines at a total of 47 locations. The machines total are grossing $115,000 per year. His asking price is $145,000 and there is an additional total of $51,000 in financing (debt) with 7-up that he says would be passed on to us.

 

I know what my initial thoughts are but I want to know yours as I currently operate 0 vending machines. :)

 

Looking forward to your comments.

I will echo the above posts - the price is too high. Another concern is the mention of combo machines as these are usually not very profitable.  And how the hell did he end up owing 7-up 51K - very odd.  Pass on this mess.

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That's like almost 7,000 cases of canned 7up. How the hell could someone pass their debt on like that? I doubt there is a lien against the business... unless this is a rare deal where 7up subcontracted this guy and he spent ALL of the money. Let him get caught holding the bag.

Also, 7up might take these machines away if the debt doesn't get paid. Sounds like a seller that wants waaay too much.

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Something smells fishy about this deal.  Either it's someone hoping to pull a fast one on a new buyer or it's listed by a broker who's hoping to get the moon for it so they can get a fat commission for selling it.

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That's like almost 7,000 cases of canned 7up. How the hell could someone pass their debt on like that? I doubt there is a lien against the business... unless this is a rare deal where 7up subcontracted this guy and he spent ALL of the money. Let him get caught holding the bag.

Also, 7up might take these machines away if the debt doesn't get paid. Sounds like a seller that wants waaay too much.

 

 

Something smells fishy about this deal.  Either it's someone hoping to pull a fast one on a new buyer or it's listed by a broker who's hoping to get the moon for it so they can get a fat commission for selling it.

 

 

I don't vend sodas/snacks, but i would be REAL CAREFUL about investing that much money not knowing all the details about this dude.  Have you seen his location contracts/agreements or paperwork on the debt he owes?  I'll bet he has more debt than to 7-up.  I'm like the rest here, real skeptical about this deal.  

 

You could do a lot in vending with the kind of investment you're talking about here.  If i were you, i would make a much smaller investment in the business, like about 1/10 of what you're talking about.   START OUT SMALLER AND YOUR MISTAKES WILL COST YOU A LOT LESS...... Plus, the more you invest, the harder it will be for you to get out like this guy is trying to do.  Not even knowing whether or not you will like this type of business, i suggest that you are contemplating a very lofty investment loaded with high risk - it sounds.  This dude is fixing to stick someone.

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