schmedspub Posted August 16, 2007 Share Posted August 16, 2007 There has been quite a few people asking about the value of an exsisting vending route. There is no esay answer but I can share with you what I have seen bought and sold over the past 5 years. First of all make sure you understand the business prior to the jump. Its more than fill a machine and collect Money. there is mantinence, Cleaning, Service calls, Isurance, Taxes, Donations, Ect. Bulk Vending is not the same as Full line or coin operated amusements so Ill base this discussion on Bulk Vending only. Keep in mind that the buyer is the one that has to make a educated decision on what its worth. Value, Goodwill, covenant to Not compete, Inventory. There are lots to look at but the Final Number in My book is what will it make. A head has a value, So does a location. But the vaule should be based on Gross sales and little else. Machine age and condition is also important but all machines do the same thing, they drop product for a quarter. If you have 500 heads doing $5 a month each then I would value this route around $30000. Thats 1 years gross. This is the number on the tax return for at least 2 years. AND ALWAYS HAVE SELLER FINANCE A PORTION. If he will not finance then they must think the route cant make the payments. If he cant finance because he needs Cash Bad then offer less. How much so depends on how bad you want it and what feel your getting from Owner on how bad they want out. The last bulk vending route that I bought I paid approx $55 a head or $166 per location which might sound high but I paid only 80% of one years gross. I have 3 years tax returns, I met with his accountant and He financed 30% of the cost. So I say 1 years gross is fair but offer less and dont be afraid to walk away. Remember to get proof, No tax returns and accountant then walk Vending takes time. Not a get rich quick deal Go look at his locations and see if machines are in good shape Now by no means is this a perfect answer. Every route is different. If you are looking to buy a route and would like to ask specific questions then please do. Ill answer anytihng I can and tell you If I cant. Good luck and I hope I helped out some. Dave - Uptheodds Vending, LLC Link to comment Share on other sites More sharing options...
caserri Posted August 16, 2007 Share Posted August 16, 2007 Dave, Great post! I sincerely appreciate this kind of content. Your post was informative without sounding stand-offish. There is a lot to be learned from someone who has been there and gone through what is involved in purchasing an existing route. I hope to see many more posts like this from you in the future. ALWAYS HAVE SELLER FINANCE A PORTION. If he will not finance then they must think the route cant make the payments. What a great thought that is. If the seller has any confidence in the route he is selling, he will have no problem spreading out the payments. As payment for this post I have given you a "quarter" and access to the member PLUS section. It is your 10th post after all. Steve Link to comment Share on other sites More sharing options...
The Great Gattsby Posted November 5, 2007 Share Posted November 5, 2007 How does the owner financing structure usually work. Do people usually have contracts for this? If so, where can these contracts be found without paying a lawyer? Link to comment Share on other sites More sharing options...
Beer980 Posted November 5, 2007 Share Posted November 5, 2007 Then I may have missed out on a deal while researching the business or maybe it was fate to start from machine one. I was looking into a 40 machine route doing $500 - $600 a month for total package of $4000 and some inventory/spare parts. Link to comment Share on other sites More sharing options...
philo Posted November 5, 2007 Share Posted November 5, 2007 I would think that if someone has a route for sale and says it does 4-500 a month and wants 4K for the route, they ought to be willing to let you pay for it using the money from the route. I would structure payments over 18 months, say 300 per month. You do all the work and re-stocking, and the former owner just collects payment over time. If the route can meet this, they shouldn't have a probelm with the arrangement. If they want their money right away- let them get it from someone else. Regards, Philo Link to comment Share on other sites More sharing options...
antoniocinisi Posted November 19, 2007 Share Posted November 19, 2007 what do you guys mean when a seller has to finance a portion of the route he is selling?? Link to comment Share on other sites More sharing options...
caserri Posted November 19, 2007 Share Posted November 19, 2007 what do you guys mean when a seller has to finance a portion of the route he is selling?? This means having the owner accept payments from you for the route. If the seller of the route has any faith in the performance of the route he should have no problem allowing you to make payments to him from the money the route brings in. Steve Link to comment Share on other sites More sharing options...
antoniocinisi Posted November 19, 2007 Share Posted November 19, 2007 by doing this how is the seller gaurented that he will get his money back?on trust alone? Link to comment Share on other sites More sharing options...
philo Posted November 19, 2007 Share Posted November 19, 2007 No. You can either write it into a sales agreement or provide him with checks dated forward say the first of every month for the next 6 months for X amount of money. Regards, Philo Link to comment Share on other sites More sharing options...
PubliDispensadores Posted November 19, 2007 Share Posted November 19, 2007 Does The price not depend on the quality of the machines? or the type of contract that yuo have? Why only one year gross? Link to comment Share on other sites More sharing options...
caserri Posted November 19, 2007 Share Posted November 19, 2007 While it would be nice to think that trust and a handshake would be all that is needed, this is not unlike any other installment loan. An installment contract would be executed and there would be language in the contract that would protect the seller in the event that the buyer defaults. Its the same as anything else that is seller financed such as homes or autos. Steve Link to comment Share on other sites More sharing options...
antoniocinisi Posted November 19, 2007 Share Posted November 19, 2007 I was being sarcastic with the "on trust alone" comment! Link to comment Share on other sites More sharing options...
joshbrooksflorida Posted January 6, 2008 Share Posted January 6, 2008 I like your cool, level-headed approach. It takes a great deal of discipline to remove emotion and blinding optimism from these types of business decisions. Link to comment Share on other sites More sharing options...
CraigMc Posted January 7, 2008 Share Posted January 7, 2008 Another way to look at the value of a route is thus: What would it cost you to replicate the route yourself ? Add up the cost of equipment, product, and locating costs. If you can put out 100 heads cheaper than the cost of the exsisting 100 head route, then why would you ? Craig Link to comment Share on other sites More sharing options...
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