Bosakj Posted February 16, 2014 Share Posted February 16, 2014 Hi everyone, I looking at possibly buying a small snack and beverage route for sale in my area and wanted to get some info. I have a bulk route already and have been hesitant to make the leap into full line. The route consists of a Quality Inn that does (his numbers) 19,500 a year gross consists of 3 soda (coke owned) 2 snack. A Crowne Plaza gross receipts 20,000 1 soda, 1 snack and 1 frozen ice cream. A Holiday Inn gross rece look at some of them tomorrow and will get back to you. My problem is I have no idea how to determine what this is worth. What is average cog,s for snack and soda machines? I was thinking 30 percent of gross was fair for route if numbers are verifiable. Any advice would be appreciated. I will get back with make of machines. Thanks Jay Going to need to repost, seems that ipad frequents a lot of porn sites. Mission vending Link to comment Share on other sites More sharing options...
Bosakj Posted February 16, 2014 Author Share Posted February 16, 2014 Don't know what the hell happened there sent from friends iPad at work. Hopefully you can read between all that crap and offer some advice. I can't seem to edit my post there. Link to comment Share on other sites More sharing options...
Bosakj Posted February 16, 2014 Author Share Posted February 16, 2014 Ha, ha he Link to comment Share on other sites More sharing options...
moondog Posted February 16, 2014 Share Posted February 16, 2014 Don't know what the hell happened there sent from friends iPad at work. Hopefully you can read between all that crap and offer some advice. I can't seem to edit my post there. Those sound like some pretty lofty numbers. these would be premium accounts if the gross is accurate. The downsides that I see are all the Bottler owned equipment where you;ll be at their mercy regarding the minimum orders and higher prices and the fact that hotels have a much higher vandalism/ theft rate than other types of accounts. The upside is the gross and the fact that you'll be starting with enough snack machines to significantly lower your waste factor - this is always a big hurdle for new full line vendors. ..................... your friend needs to burn that Ipad Link to comment Share on other sites More sharing options...
CajunCandy Posted February 16, 2014 Share Posted February 16, 2014 Throw tat sucker in the bayou! i don't care for coke owned machines. Link to comment Share on other sites More sharing options...
AZVendor Posted February 16, 2014 Share Posted February 16, 2014 These numbers do seem high for a motel, but if you are in a tourist area those numbers could be attainable. The seller would need to be able to confirm and prove the sales figures with good collection records and maybe bank deposits if these are their only accounts. The drawbacks to the Coke owned equipment are as Moondog mentioned, though I think if the sales are accurate you could probably meet the bottler requirements for purchasing X number of cases per machine per month from approved wholesale sources. You do need to realize that these bottler machines will not be his or your business assets so there is no value to those machines as assets. You will also need to become approved by Coke as a new third party vendor in their system so they know who is responsible for the machines and so you can put in service calls when needed. Questions to ask the seller are: How long have they owned these locations? Why are they selling these locations? Are there any contracts on any locations? What are his selling prices by category? What commission percent are they paying each location? Is any money owed on the machines and if so will they prove the liens are satisfied with your purchase of the locations? Your cost of goods will vary depending on their product pricing by category and what commissions they pay to the accounts. Pricing of accounts and routes will generally begin at one year's gross sales, but that is not set in stone of course. You will want to determine the value of the equipment along with what you feel the locations are worth. You should try to earn a ROI of 1 year or less. Link to comment Share on other sites More sharing options...
Bosakj Posted February 16, 2014 Author Share Posted February 16, 2014 Hi looked the accounts today with the broker. The Quality inn does have the three Glass front coke owned machines and are priced at 1.75 a bottle and a dollar a can, monsters are 3.00 and the snack machines (2) which are owned outright seemed to be priced pretty well not sure of make look like AP's. I'm not sure yet what he is locked onto buying from coke. I know not owning a the machines sucks but I figure I can change them out eventually. If they need repair I figure one repair will probably make up for the extra cost of the soda. Crowne Plaza I snack and 1 glass front owned outright and one broken (satellite) ice cream machine not sure of make but are nicer machines. The Holiday Inn that has a gross receipts of 33,600 with 1 snack and 1 soda and 1 ice cream (all owned) and again not sure what make machines but all are nice not crap machines. He also has an ATM in Holiday Inn 3600 yr which I think is on low end due to him not filling it up enough. All the same price points and he gives 10% commission to each location. He is looking for close to 40cents on the dollar gross. Is this too high seem fair. I think it would put me at about 10 months to a year payoff. Thanks Jay Link to comment Share on other sites More sharing options...
AZVendor Posted February 16, 2014 Share Posted February 16, 2014 I find it doubtful that they are only paying 10% commission, but that's great if they are. You need to see proof of that so you aren't blindsided when the accounts ask why the commission checks are so low. I'm also very surprised that the broker willingly showed you the locations without any earnest money from you. Did they have you sign a non-disclosure or non-compete agreement first? Don't get caught up in the hype from the broker and your excitement about this opportunity. You still need answers to the questions I posted earlier. These are very important details that you need to know before you invest any money in this. If the ice cream machines are slaved to the snack machines then they are either USI (more likely) or AP. If they are USI this could be a case of a USI distributor finding accounts himself to place machines in, then trying to sell the accounts after the equipment is set up. This is a typical technique used by many USI distributors in their attempts to sell machines. I'm not saying this is the deal here, but you need to keep it in the back of your mind, especially if there are less than one year of sales receipts. What did the broker say was going to happen to the broken ice cream machine? You having the model numbers of the machines is very important here. If you saw the machines you should have looked inside the glass or perhaps on the backs of the cabinets for some indication of model numbers. Link to comment Share on other sites More sharing options...
Bosakj Posted February 16, 2014 Author Share Posted February 16, 2014 Thanks, he has been in these hotels since 06 and one 09. The broken ice cream machine I will probably have him just remove it. I really don't want it. Crowne is on a three year contract but can be tossed with 90 notice, so essentially no contract as far as I'm concerned. Like I said he is willing to finance some of route I will protect myself with contract (in reference to commission). I'm not too excited about deal it is a lot of money to put up and I'm not too familiar with full line vending. More nervous than excited but if his numbers are close, I'm assuming they are high I will be able to recoup my money within a year as long as I don't get the boot. He is selling because he just started an SEO business and feels he wants to concentrate on it and not be running to these accounts every week once or twice. We'll see I will keep u informed thanks for the advice.. Link to comment Share on other sites More sharing options...
mission vending Posted February 17, 2014 Share Posted February 17, 2014 Thanks, he has been in these hotels since 06 and one 09. The broken ice cream machine I will probably have him just remove it. I really don't want it. Crowne is on a three year contract but can be tossed with 90 notice, so essentially no contract as far as I'm concerned. Like I said he is willing to finance some of route I will protect myself with contract (in reference to commission). I'm not too excited about deal it is a lot of money to put up and I'm not too familiar with full line vending. More nervous than excited but if his numbers are close, I'm assuming they are high I will be able to recoup my money within a year as long as I don't get the boot. He is selling because he just started an SEO business and feels he wants to concentrate on it and not be running to these accounts every week once or twice. We'll see I will keep u informed thanks for the advice.. If he is focusing on another business then I would offer to be his employee for 3 months with a option to purchase. This will do a number of things; 1. The accounts will get to know you, its harder to kick out someone they know and hopefully like. 2. You can learn the business without the risk of investment and walk away if its not for you. 3. You will get a accurate handle on the revenue and decide if his numbers are reasonably accurate. Link to comment Share on other sites More sharing options...
arkhusker Posted February 17, 2014 Share Posted February 17, 2014 great idea mission. From my experience, hotels are not the best revenue producers but I'm also not in a tourist trap. My best hotel at its peak only did about $200 a weak with a booming natural gas industry. Now. it does about $40 maybe, though I have yet to replace a vandalized snack machine. Hundreds in damage for about $30 and didn't even take the product out of it. Link to comment Share on other sites More sharing options...
mission vending Posted February 17, 2014 Share Posted February 17, 2014 great idea mission. From my experience, hotels are not the best revenue producers but I'm also not in a tourist trap. My best hotel at its peak only did about $200 a weak with a booming natural gas industry. Now. it does about $40 maybe, though I have yet to replace a vandalized snack machine. Hundreds in damage for about $30 and didn't even take the product out of it. Yep, been there, done that and got the tattoo to prove it For me, hotels and schools are off of my to do list. Link to comment Share on other sites More sharing options...
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