Vendfun Posted January 21, 2013 Share Posted January 21, 2013 need some help from the experts here. How does using a 3rd party leasing agreement (i.e. Coke / Pepsi) change the overall valuation of a potential route? Using the 30-40% of gross, or 4x Gross as a starting point , and +/- 5-10% for intangibles that have already been discussed . How does this scenario factor into the equation appreciate the input . Link to comment Share on other sites More sharing options...
ruff84 Posted January 21, 2013 Share Posted January 21, 2013 I am by far no expert and I am sure someone more knowledgable will answer your question, but here is my thought process. Let say you are buying a route of 15 machines all 3rd party leasing through coke. After checking out all the details and settle on a price you pay and are happy for 5 months, then all of a sudden coke comes and pulls the machines for what ever reason. You paid x amount of dollars for borrowed equipment and now you have to buy 15 machines to keep your locations. Now same scenario but you this time no 3rd party machines. No one is going to come and take back the machines. You will probably pay more for the route to own the machines, but at the end of the day you atleast own the machines out right. So I would value a route with a bunch of 3rd party machines far less than a route with seller owned machines. Link to comment Share on other sites More sharing options...
Repairman Posted January 22, 2013 Share Posted January 22, 2013 Large companies do not like to lay out money for the machines or for parts to repair them. I work for a company where our division has over a thousand drink machines out, 98 per cent of them are Coke/Pepsi machines and are considered "loaners, " Free machines so to speak. Since a large company generates thousands and thousands of dollars in drink sales they also benefit from volume price breaks that small companies do not enjoy. So they get price breaks and generate a higher profit so to speak from the moment they set a machine. .Coke and Pepsi each want their machines out in the public arena where they can be seen and therefore readily " loan out" machines to a large company a lot faster than they would a small company, at least that is the experience I have had locally. Link to comment Share on other sites More sharing options...
mission vending Posted January 22, 2013 Share Posted January 22, 2013 need some help from the experts here. How does using a 3rd party leasing agreement (i.e. Coke / Pepsi) change the overall valuation of a potential route? Using the 30-40% of gross, or 4x Gross as a starting point , and +/- 5-10% for intangibles that have already been discussed . How does this scenario factor into the equation appreciate the input . In my personal experience whenever I have purchased a location(s) I have deducted the cost to buy a similar type machine from the valuation as part of my offer. Link to comment Share on other sites More sharing options...
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