Nick505 Posted October 29, 2013 Share Posted October 29, 2013 So I am in talks with a 6 location route in my service area. I am aware of the locations and I have seen the equipment. All Northwestern 7 way racks with 4 column advance sticker machines, 2 spirals, and one Impulse BVP. Asking price is $7,000 USD cash. This is very expensive for the equipment alone which leave a lot of value in goodwill. The owner has provided me with his records which have been established for about 3 years. Based on the averages I have come up with these 6 locations average $151/month. These records are merely a homemade spread sheet that has numbers filled in. Nothing more. Anyone could have created this in about 2 hours. So with no further verification how would you handle this? Link to comment Share on other sites More sharing options...
Rick Posted October 29, 2013 Share Posted October 29, 2013 So a little less than 8 months gross, that's a fair deal. I'd run the route with him and continue negotiating. Two weeks later I'd set up a time to meet him with $5,500 cash in hand (and another $1,000 in my pocket just in case). Once the two of you agreed on the price, I'd whip out the contract which I had drawn up ahead of time, fill in the purchase price and done deal. Except...before signing I'd politely explain that, "As a bulk buyer I've been burned too many times. So, even though I know you're a straight shooter, I have to insist that before we sign this we go run two of the locations real quick." He won't know about it in advance so you are ensured he didn't seed the machines. If he's an honest guy he should have no qualms about spending the hour to do this before you hand him a rather large amount of money. Link to comment Share on other sites More sharing options...
Nick505 Posted October 30, 2013 Author Share Posted October 30, 2013 I forgot to add that he is willing to sign a contract stating I will recoup my investment in 1 year or less otherwise he has to purchase back..Not sure how that would work... Also these are a chain of restaurants.. Link to comment Share on other sites More sharing options...
bhfisher Posted October 30, 2013 Share Posted October 30, 2013 Ask to see his Schedule C for the route and Bank deposits If I ever decide to sell, I will be able to show Buyer complete collections from day 1 and matching bank deposits around the date of collections. All this will match my Schedule C form. There will be doubt how much the route makes. Link to comment Share on other sites More sharing options...
timberframe50 Posted October 30, 2013 Share Posted October 30, 2013 At 8 month payback I'd pull the trigger. I think Rick's approach is solid. Good luck Nick Link to comment Share on other sites More sharing options...
havending Posted October 30, 2013 Share Posted October 30, 2013 So a little less than 8 months gross, that's a fair deal. I'd run the route with him and continue negotiating. Two weeks later I'd set up a time to meet him with $5,500 cash in hand (and another $1,000 in my pocket just in case). Once the two of you agreed on the price, I'd whip out the contract which I had drawn up ahead of time, fill in the purchase price and done deal. Except...before signing I'd politely explain that, "As a bulk buyer I've been burned too many times. So, even though I know you're a straight shooter, I have to insist that before we sign this we go run two of the locations real quick." He won't know about it in advance so you are ensured he didn't seed the machines. If he's an honest guy he should have no qualms about spending the hour to do this before you hand him a rather large amount of money. I like that one Link to comment Share on other sites More sharing options...
PowerVendor Posted October 31, 2013 Share Posted October 31, 2013 Rick is dead on. I wouldn't pay more than $5,500 to $6,000 for the route and visit ALL the locations. I've bought routes 40 to 85 locations and visited EVERY ONE before i purchased. Nick505, you are talking $151 per location and not gross for all locations? Why would the dude sell if his racks were doing that well? Link to comment Share on other sites More sharing options...
F J Vending Posted October 31, 2013 Share Posted October 31, 2013 Does he pay commissions? If so how much. 7 racks doing $150 per month sounds good but if he is paying too high of commissions then consider that in your offer. I have heard of vendors paying 50% to land good locations, so your $150 per month becomes $75, then COG would drop you net to $35-40 per location. Link to comment Share on other sites More sharing options...
Rick Posted November 13, 2013 Share Posted November 13, 2013 How did this turn out for ya Nick??? Link to comment Share on other sites More sharing options...
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