Canteen Franchise Model

[maxthevendor]

I'm fairly new to the vending industry and only own a dozen or so machines.  I know Canteen has a franchise model but I don't really understand how it works.  Can someone help explain?  Is there a minimum size threshold to become a franchisee?  What is their franchise fee/commission structure?  If I do become a Canteen franchisee, does Canteen play a big role in the day to day decision making of my business?  Any help would be greatly appreciated!  Thanks.    

[AZVendor]

You can't be a Canteen franchise unless they come to you because they want to buy you out.   They won't even consider that unless you have multiple routes that do millions in sales.  They are a national company and don't care about small operations at all.  You aren't even in anybody's sights as you are a miniscule business.

[maxthevendor]

Thanks @AZVendor thats helpful.  I'm still very curious as to how the Canteen franchise model works.  There is nothing on the web that talks about it.   If anybody knows the details please feel free to elaborate!  Thanks. 

[Southeast Treats]

Most likely anyone in their system is under a non-disclosure agreement and can't reveal business details.  We have some canteen people on the forum but they don't go around talking about company info. 

[AngryChris]

Basically, to become a canteen franchise, you need to already have an established business.  They generally don't want small accounts that do less than maybe $5,000/year.  They want large accounts.  If you aren't a relatively large and established business, then you're wasting your time even asking about them.  It's not something where you pay a fee to become a franchise and they hook you up with everything you need to become a big operator...   Most companies I have known about that have joined canteen did so because they wanted to retire.

[Anacapa Vending]

Machines should be Clean, Full and Working.

Only take on accounts that make over $100 a week.

Buy good equipment. 

There you are now mini Canteen without the overhead or franchise fees.

[PHX1]

Lol who would want to be a canteen franchise? I can't speak to whether or not they have a good reputation in other states but here in AZ they are know for having old machines that are always empty and dirty. here they are at a local community college. 

 

 

On a side note. I called on one of there accounts last week and there Pepsi leased machine had 8 out of 10 selections sold out. Only things left were tea and water. 

[CajunCandy]

Canteen?

Never heard of them!

[Snickers]

From what I have seen around here they are not anything too exciting. They have National contracts like Lowes,Wal Mart,Kmart,etc. Just because they are a big company does not mean they are great. I know they have several dud accounts in our small area. 

[AZVendor]

17 hours ago, PHX1 said:

Lol who would want to be a canteen franchise? I can't speak to whether or not they have a good reputation in other states but here in AZ they are know for having old machines that are always empty and dirty. here they are at a local community college. 

 

 

On a side note. I called on one of there accounts last week and there Pepsi leased machine had 8 out of 10 selections sold out. Only things left were tea and water. 

This is typical of the Phoenix Canteen branch.  They are stretched way too thin.  They are a classic case study in the theory that they are only as good as their route drivers are.  Too low a pay and too few of them.  You should have seen the fiasco when they made their last large company acquisition in Phoenix.  They hired anyone they could find and put them into rented Hertz trucks with no shelves, handed them coin bags, keys and route tickets and told them to run a route.  Quite a joke.

[PHX1]

lol are you ref

17 minutes ago, AZVendor said:

This is typical of the Phoenix Canteen branch.  They are stretched way too thin.  They are a classic case study in the theory that they are only as good as their route drivers are.  Too low a pay and too few of them.  You should have seen the fiasco when they made their last large company acquisition in Phoenix.  They hired anyone they could find and put them into rented Hertz trucks with no shelves, handed them coin bags, keys and route tickets and told them to run a route.  Quite a joke.

Lol are you referring to when they bought cypress? At least there accounts are easy pickings for the us   

 

Ace on the other hand, they are one tough cookie to crack. 

[AZVendor]

No, way back before Cypress which was only two routes (who also stiffed me for hundreds of dollars in repairs (among others who have)).  I think it was when they bought out North County Vending in 2011 along with buying the majority of Best (Worst) Vendors that they didn't already own.  The route drivers at Canteen have always since hated all the worthless Best Vendors retail store accounts they have to service.  Ace is tough to win from because they actually service their accounts.  The only issue I've seen with them is promising new or refurbished machines that only end up being machines pulled from other locations and thrown into new accounts as is.  I can't say anything to the locations because I'm just the repair/moving guy.

[Diana123]

Hi, I'm new and researching the vending business, sorry for very neophyte questions.  Does Canteen own the equipment and accounts and you work for them stocking machines or is it a franchise where you own the locations/accounts and they sell you the supplies?  Can you purchase discounted soda/candy through someone like Canteen and it be worth the franchise fee? 

[orsd]

Canteen is made up of franchises, who owns the equipment and accounts, and employs the route drivers. They buy product themselves, but sometimes there is a negotiated contract by Canteen.

As for franchising, it isn't like McD's, you have to be a very successful large vending operation already, and Canteen approaches you to buy you out and make you a Canteen franchisee.

[AngryChris]

15 hours ago, Diana123 said:

Hi, I'm new and researching the vending business, sorry for very neophyte questions.  Does Canteen own the equipment and accounts and you work for them stocking machines or is it a franchise where you own the locations/accounts and they sell you the supplies?  Can you purchase discounted soda/candy through someone like Canteen and it be worth the franchise fee? 

As orsd said, canteen buys up existing companies.. companies with good solid accounts (usually accounts where machines average at least $100/week per machine).  It's not a company that you can contact and they'll lend you equipment so you can make money.  Vending is not a get-rich-quick scheme, but you can make good money if you grow it and play your cards right.  It took me over 5 years of barely making anything before I started to turn a real profit.

[NewbieOnline]

Question please. If you are a large vending Canteen franchise and want to sell your vending company, Canteen has first right of refusal I hear. Do they buy the ROUTES plus inventory or do they buy the ENTIRE business as in routes, inventory, trucks, warehouse building, other machinery and equipment, etc? Thank you for your input. 

[AZVendor]

They buy everything but it has to make sense for them and you must present all financials for a few years back to prove your sales.  You need late model machines in good condition with good pricing and commissions that make the business profitable.

[Snickers]

I see Canteen in my area run old machines. Like stock 145 National old. They also do lower than average pricing. I’m sure that’s not everywhere on their routes but that’s what I have seen here. 

[Southeast Treats]

Canteen does not seem to have much in the way of standards or controls over their franchises.  They seem to be hit or miss in my area, and the biggest reason they keep a lot of accounts is because they sign them to very intimidating contracts; most locations will back off dumping them for fear of being sued.  I have been called by a number of their accounts but don't usually get them, they get cold feet trying to figure out the contract they had signed....  Compass Group (Canteen's parent company) is big and into all kinds of things, not just vending.   

[AngryChris]

Around here, Canteen didn't have a presence until they bought a couple large local vending companies.  One company had mostly late-model stuff as they only went after large accounts, but the second company they bought had a pretty big mixture of account sizes and machines.  It seems as though their only goal was to break into the market by purchasing enough locations that they could operate effectively and use their name/marketing as well as their sister-company (Best Vendors) to land them contracts with large accounts.  I don't think they would be interested in my business, and it's profitable!!

[Snickers]

10 hours ago, AngryChris said:

Around here, Canteen didn't have a presence until they bought a couple large local vending companies.  One company had mostly late-model stuff as they only went after large accounts, but the second company they bought had a pretty big mixture of account sizes and machines.  It seems as though their only goal was to break into the market by purchasing enough locations that they could operate effectively and use their name/marketing as well as their sister-company (Best Vendors) to land them contracts with large accounts.  I don't think they would be interested in my business, and it's profitable!!

I believe that’s what they have done years ago in my area as well. I also doubt they would be interested in my operation and if they were it would be pennies on the dollar. 

[Zachsea]

From what i can tell they’re nothing you’d ever want to be a part of. The help they hire to fill the machines doesn’t seem smart enough to count to ten 😂 and itd still be your skin in the game and your name on the machines but their help maintaining the equipment. Heres a local concrete company with 170 employees they “service”. Needless to say its our account now😂they just make it way too easy. Moral of the story is stear clear if you want to keep your good reputation.