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For those of you who have employees, how have you hired them? Do you take them on as employees or subcontractors? Do you pay them an hourly rate, salary or percentage of the profits and how do you keep them from stealing from you?

I have a very large charity honor box business (with over 1,200 accounts) that I'm wanting to expand exponentially but it will take employees (or subcontractors) to do so and I'm just looking for answers for how to go about this. Telling your experience with this would be much appreciated.

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That's a large honor box route!!  If you haven't already, definitely post this in the honor box section.  All I will say is this... since honor boxes come in a variety of ways (ie. actual box characteristics like cardboard vs solid, products in side like chips or lollipops, profit margins, etc..), I think it is important for you to decide a policy as to how you would want things done.  In my personal opinion, honor boxes are an absolutely great way to make a buck IF you get a large scale.  In fact, if I were ever to retire from this (which will be a while), I might switch to doing honor boxes part-time just to make an easy extra buck.

From my rather low honor box experience (chips, cookies, few other items), the previous driver didn't really care much about the service.  Since he was getting a straight 25% commission, he was all "time is money" and didn't care about stales.  He had hot fries which had been expired for 2 years still in the box.  He claimed hot fries don't expire.  They might not go bad very quickly, but there was a date on them so they were expired as far as I was concerned.  If he collected $400 in 6 hours, then he pocketed $100 for 6 hours of work and he was happy.  Stale items weren't really accounted for since he didn't really bring them back.  I even saw him take a stale item out of one box and put it to another location to try to sell it!!!  My point is that honor boxes require a bit of supervision, be it just watching the numbers or doing surprise ride-alongs or whatever is done.  Having an independent contractor MIGHT be different if you simply charge a per-box fee.  For example... if they have 100 snack honor boxes, you might charge them $2 per box ($200 total) and let them handle the rest (they decide how to run the route, they purchase their own product, pay for their own gas, etc..).  Maybe simply have a contract that says that they get some kind of startup product and they only have to pay it back if they lose too many accounts or quit before 90 days.  That way, you pretty much can't suffer losses.  If they do lose a normal amount of accounts, your job is to find new locations.  I feel like charging per box is the only way to prevent theft because everything (except the box and the location) becomes theirs and there is nothing they can really steal under those circumstances, I just don't know what a fair price per box would be.

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`AngryChris, thank you for your very in-depth reply! I have a few questions for you though if you don't mind.....

1) The person you were speaking about who was getting 25% commission, was this your employee? Also, what happened to this person? Did they make a profit for the business or was it a total wash?

2) I have a friend who runs an IT business and he told me that taking on employees and paying them full benefits is the best way to go. He said that doing that with employees brings in a much higher caliber of person to work for you than simply taking them on as a subcontractor. What would be your thoughts about somehow doing this?

I really like your idea of charging a per box fee as I see that it has some very definite advantages such as not needing to supervise each individual route in whatever city since they would effectively be the route operators businesses. I do see some disadvantages such as not making nearly as much profit with each box (our boxes make at least $10 per month profit.)

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1) He was the previous owner's employee.  He worked for me for one service cycle before I took it over.  That was part of the deal and not a surprise.  He DID make it profitable, but not very much.  I had the time and I chose to make those profits myself.  Plus, I didn't have a vehicle for him whereas the previous owner provided him with a used minivan. 

2) I don't know about that. I have constantly restructured every time I even start thinking about possibly hiring someone.  I'll stay a 1-man operation until I absolutely have to hire someone.  I will say this though.... in the past, I worked with people who had full benefits and they didn't seem to care anymore than people who don't get full benefits.  I think it really depends on so many factors.  

Here is the thing... if you hire ANYONE and pay them any kind of wage, salary, commission, etc... you have to watch over them and make sure they don't steal.  You also have to make sure they don't eat your profits away.  If you hire an employee, you need to provide a vehicle.  If you hire an independent contractor, they provide their own vehicle but they should be making much higher margins to offset their vehicle and fuel expense.  Hiring an employee will cost you more, whereas hiring an independent contract is cheaper but you have less control.  Given the nature of honor boxes and how easy it is to steal from them without getting caught, I think a per-box fee is the absolute best way to go.  They can't steal money or product from you and you could run such an operation out of a home office.  Sure, your revenue falls drastically, but so does your expenses.  Of course, I was only saying $2/box because it seemed like a realistic number ($20/box is definitely not realistic).  You need it low enough so that contractors see it as a profitable idea, but high enough so that you make a good profit.  Maybe $5/box is the way to go.  

To be totally honest, the idea has actually made me consider starting an honor box route again and charging a box fee to someone.  I did snack boxes though so I don't know exactly what you sell and what your margins are.  It's really up to you to figure out what's profitable.  Just bare in mind that, if the rental idea worked out, you would have almost zero overhead or expenses except for doing sales calls.  I wouldn't encourage the contractor to find his own locations though.  If anything, pay a sales person to find new locations.  I think you REALLY want to discourage the driver from finding his own locations.  Once they start doing that, they might as well start their own honor box route.  Hiring a retiree may be the way to go.  They work out of their own car at their own speed on their hours.  If they don't service properly, they get fired and lose nothing (except maybe some startup costs such as products you provided to start making money that are refundable after 90 days for example).

Hiring someone may actually be the way to go and whatever has worked for you before may work later.  The honor box business is pretty diverse so I can only provide so many ideas without knowing the ins and outs of your specific business.  Just consider that an independent contract can significantly reduce your expenses but they deserve a much higher margin.  A driver requires many more expenses but you make a better margin.  Everything has its risk.

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AngryChris, I think you have some excellent points about your "renting style" method of doing this but have you considered this............. 

 

You and I both know that this business is very volatile, there are constant kick-outs all the time. How would you therefore keep people from giving a vast exaggerated number of kick-outs? The only way I think that could work is if you had constant verification by calling back the businesses where this supposedly happened and I can see how that would slow the business way down and burn up resources. Plus I'm sure there would be a number of managers/owners you'd have to talk with who gave these boxes the boot who are the irate/jackass type who really aren't worth the time of day in the first place.

 

I think an idea would be to have an agreement like Pink Ribbon has with Susan G Kohman in that the Susan G Kohman organization gets a certain percentage per box per month with each box registered to an individual charity vendor. Both Pink Ribbon and Susan G Kohman are completely indemnified from the actions of their charity vendors through a signed legal contract with their charity vendors. 

I'm actually doing the same thing with a different organization but I haven't been able to get it off the ground simply because of the fact that when people are looking for work, they don't want to have to pay money to do the work. I've found that that is an ENORMOUS road block to virtually everyone and I still have no idea how Pink Ribbon has done what they've done with getting so many people into their program across the country (and if you know the answer to this, it would be much appreciated.)

I think what really needs to happen is for people to first see how much money is in this business while being PAID to see it. I have absolutely no doubt that if people were to see how much money I'm making in doing what I'm doing versus the total hours worked, they would be kicking my door in to be wanting to do this.  

What are your thoughts?

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On ‎5‎/‎28‎/‎2017 at 0:36 PM, karen99 said:

AngryChris, I think you have some excellent points about your "renting style" method of doing this but have you considered this............. 

 

You and I both know that this business is very volatile, there are constant kick-outs all the time. How would you therefore keep people from giving a vast exaggerated number of kick-outs? The only way I think that could work is if you had constant verification by calling back the businesses where this supposedly happened and I can see how that would slow the business way down and burn up resources. Plus I'm sure there would be a number of managers/owners you'd have to talk with who gave these boxes the boot who are the irate/jackass type who really aren't worth the time of day in the first place.

 

I think an idea would be to have an agreement like Pink Ribbon has with Susan G Kohman in that the Susan G Kohman organization gets a certain percentage per box per month with each box registered to an individual charity vendor. Both Pink Ribbon and Susan G Kohman are completely indemnified from the actions of their charity vendors through a signed legal contract with their charity vendors. 

I'm actually doing the same thing with a different organization but I haven't been able to get it off the ground simply because of the fact that when people are looking for work, they don't want to have to pay money to do the work. I've found that that is an ENORMOUS road block to virtually everyone and I still have no idea how Pink Ribbon has done what they've done with getting so many people into their program across the country (and if you know the answer to this, it would be much appreciated.)

I think what really needs to happen is for people to first see how much money is in this business while being PAID to see it. I have absolutely no doubt that if people were to see how much money I'm making in doing what I'm doing versus the total hours worked, they would be kicking my door in to be wanting to do this.  

What are your thoughts?

karen99, are you dealing with the Mint or lollipop charity honor boxes, or the Snack Tray honor boxes (candy bars, chips, cookies, etc.)  ?  If you are talking about the mint candy boxes, then this MIGHT work with employees in different cities working for you.  However, if you are talking about the Snack trays, you are setting yourself up for a HUGE nest of problems and ultimately failure.  Snack tray route drivers need an audit system in place (NOT based on averages, but on actual figures) and they need CONSTANT communication.  I can explain this further if you'd like.

Also, if you are bringing on these route drivers as EMPLOYEES of your company with benefits and the whole sha-bang, then you CAN NOT "rent" or "lease" the boxes to them.  There are plenty of Labor Law attorneys that would love to challenge you on that, trust me!  Even as an independent contractor you would probably have issues.  If you rent or lease the boxes, you would have to be setting them up as their own businesses that you are supporting with a service.  With employees, you HAVE to show their income on YOUR books so that you can pay the payroll taxes and issue them a W-2, and the same for a subcontractor (you would have to provide a W-9). 

I saw on your other post (on the honor box page) that you were considering an escrow deduction from the employees as a deterrent against theft.  This would be a HUGE NO-NO.  Again, you can not hold payroll from your employees as a "safeguard" like that, unless you want to risk a lawsuit.

I could give you MANY MANY more examples of the "can of worms" that you are considering opening.   Just trying to give some helpful advice to prevent a big nightmare for you.  :) 

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3 hours ago, flintflash said:

karen99, are you dealing with the Mint or lollipop charity honor boxes, or the Snack Tray honor boxes (candy bars, chips, cookies, etc.)  ?  If you are talking about the mint candy boxes, then this MIGHT work with employees in different cities working for you.  However, if you are talking about the Snack trays, you are setting yourself up for a HUGE nest of problems and ultimately failure.  Snack tray route drivers need an audit system in place (NOT based on averages, but on actual figures) and they need CONSTANT communication.  I can explain this further if you'd like.

Also, if you are bringing on these route drivers as EMPLOYEES of your company with benefits and the whole sha-bang, then you CAN NOT "rent" or "lease" the boxes to them.  There are plenty of Labor Law attorneys that would love to challenge you on that, trust me!  Even as an independent contractor you would probably have issues.  If you rent or lease the boxes, you would have to be setting them up as their own businesses that you are supporting with a service.  With employees, you HAVE to show their income on YOUR books so that you can pay the payroll taxes and issue them a W-2, and the same for a subcontractor (you would have to provide a W-9). 

I saw on your other post (on the honor box page) that you were considering an escrow deduction from the employees as a deterrent against theft.  This would be a HUGE NO-NO.  Again, you can not hold payroll from your employees as a "safeguard" like that, unless you want to risk a lawsuit.

I could give you MANY MANY more examples of the "can of worms" that you are considering opening.   Just trying to give some helpful advice to prevent a big nightmare for you.  :) 

Flintflash, thank you for your feedback this is all a process of learning for me and I appreciate your knowledge on the subject.  I'm actually doing the "mint boxes" (charity vending) except that I don't consider them mint boxes because I put many other types of candy in them. 

On the issue of the escrow.....I'm sure that you know that escrow is a third party holder of money that does not release funds until all predetermined stipulations are met. The only reason I've considered using escrow is because, for example, I go to another city in another state that is 500 miles away to try this out by setting up 100 accounts. Doing this takes a lot of candy and candy equals money. If I put a job ad on Craigslist looking for someone to run this particular route, I'm putting a lot of trust in someone I know very little about (other than what's on their resume', talking with them during the interview and running a background check on them.) I would be relying on them to not only run the route but to then also deposit all the money and wire transfer it over to my companies account (minus whatever their pay would be from this.) The money I would ask them to put into escrow would therefore be an insurance policy for my company and my company would ONLY be able to cash their money from escrow it if they tried to "run out" on us and not deposit the money from running the route............Therefore, my question is how else can I do this?  Do you know of a better way to do this?

 

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13 minutes ago, karen99 said:

Flintflash, thank you for your feedback this is all a process of learning for me and I appreciate your knowledge on the subject.  I'm actually doing the "mint boxes" (charity vending) except that I don't consider them mint boxes because I put many other types of candy in them. 

On the issue of the escrow.....I'm sure that you know that escrow is a third party holder of money that does not release funds until all predetermined stipulations are met. The only reason I've considered using escrow is because, for example, I go to another city in another state that is 500 miles away to try this out by setting up 100 accounts. Doing this takes a lot of candy and candy equals money. If I put a job ad on Craigslist looking for someone to run this particular route, I'm putting a lot of trust in someone I know very little about (other than what's on their resume', talking with them during the interview and running a background check on them.) I would be relying on them to not only run the route but to then also deposit all the money and wire transfer it over to my companies account (minus whatever their pay would be from this.) The money I would ask them to put into escrow would therefore be an insurance policy for my company and my company would ONLY be able to cash their money from escrow it if they tried to "run out" on us and not deposit the money from running the route............Therefore, my question is how else can I do this?  Do you know of a better way to do this?

 

I get the safeguard you are trying to put in place with the escrow, but if this individual is an "employee", you could have someone fighting this or suing you over this.  I'm not sure which state you are in, but in our state of Michigan, the Dept. of Labor would frown upon this.  I would hate to see this turn into a big mess for you down the line.  As far as how else to do this, I would think that you would need to instill some sort of management/supervisor.  I would test this out in nearby areas, where it would be feasible to check on and audit your route drivers routinely.  As you branch out in time, you could set up a "regional" manager who would oversee the drivers.  The problems that you will run into with drivers being this far away from you without any kind of supervision, goes further than just them stealing.  What happens if they don't service the accounts when they are supposed to run them, or what if they just up and quit?  How quick can you rehire and get a new driver trained and ready to take over?  Are YOU going to run the route in the meantime while you have no route driver?  If not, who will?  I'm not sure exactly the service schedule for the Charity Mint boxes (I call them that to differentiate in my mind from the Snack Tray honor boxes), but I know we have our accounts on a strict schedule.  Losing a route driver can really put us in a bind, so that is something to really consider when hiring people to run routes for you. 

Next, let's look at the possibility of account stealing.  I mean, what is there to prevent your new, trained route driver from contacting Sheridan Systems, purchasing a few hundred boxes and Pink Ribbon stickers and going out and stealing your accounts from you. Or just becoming a competitor.  No "non-compete" will stand up in a court, unless you have a REALLY SOPHISTICATED Non-Compete drawn up by a lawyer. (And even many of those don't stand up in court).  Someone could easily replace your boxes over time and put you out of business in that area for a while, EVEN if you did call the accounts to verify that they were pulled when the driver said they were.  There are many ways they could do it and you wouldn't find out until it was too late.

And then of course, there's that STEALING issue staring us in the face.  With my company, could someone take all my money and turn in a route full of empty coin boxes?  YES.  Would I catch it right away?  YES!  I also have my own insurance policy that covers that as well.  There is no way that I could hire a route driver and then ask them to put a $1500 deposit into an escrow account to cover any possibility of theft.  Pretty much anyone that you will hire to run your routes won't have that kind of money available to put into an escrow account, even if they wanted to (which they won't).  Theft is just the risk we take when hiring drivers for the HONOR system, because THEY are on the honor system as well as our customers.  All you can do is to make sure you have a GREAT auditing system in place and GREAT communication daily with your drivers. 

Again, I'm just scratching the surface of the EMPLOYEE issue.  There are Liability issues, insurance issues, tax issues, payroll issues, and many more to think about.  Not trying to scare you, but trying to give you real life situations that many people don't think about when considering hiring employees.  I hope this helps.  Just my 2 cents.  :) 

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1 hour ago, flintflash said:

I get the safeguard you are trying to put in place with the escrow, but if this individual is an "employee", you could have someone fighting this or suing you over this.  I'm not sure which state you are in, but in our state of Michigan, the Dept. of Labor would frown upon this.  I would hate to see this turn into a big mess for you down the line.  As far as how else to do this, I would think that you would need to instill some sort of management/supervisor.  I would test this out in nearby areas, where it would be feasible to check on and audit your route drivers routinely.  As you branch out in time, you could set up a "regional" manager who would oversee the drivers.  The problems that you will run into with drivers being this far away from you without any kind of supervision, goes further than just them stealing.  What happens if they don't service the accounts when they are supposed to run them, or what if they just up and quit?  How quick can you rehire and get a new driver trained and ready to take over?  Are YOU going to run the route in the meantime while you have no route driver?  If not, who will?  I'm not sure exactly the service schedule for the Charity Mint boxes (I call them that to differentiate in my mind from the Snack Tray honor boxes), but I know we have our accounts on a strict schedule.  Losing a route driver can really put us in a bind, so that is something to really consider when hiring people to run routes for you. 

Next, let's look at the possibility of account stealing.  I mean, what is there to prevent your new, trained route driver from contacting Sheridan Systems, purchasing a few hundred boxes and Pink Ribbon stickers and going out and stealing your accounts from you. Or just becoming a competitor.  No "non-compete" will stand up in a court, unless you have a REALLY SOPHISTICATED Non-Compete drawn up by a lawyer. (And even many of those don't stand up in court).  Someone could easily replace your boxes over time and put you out of business in that area for a while, EVEN if you did call the accounts to verify that they were pulled when the driver said they were.  There are many ways they could do it and you wouldn't find out until it was too late.

And then of course, there's that STEALING issue staring us in the face.  With my company, could someone take all my money and turn in a route full of empty coin boxes?  YES.  Would I catch it right away?  YES!  I also have my own insurance policy that covers that as well.  There is no way that I could hire a route driver and then ask them to put a $1500 deposit into an escrow account to cover any possibility of theft.  Pretty much anyone that you will hire to run your routes won't have that kind of money available to put into an escrow account, even if they wanted to (which they won't).  Theft is just the risk we take when hiring drivers for the HONOR system, because THEY are on the honor system as well as our customers.  All you can do is to make sure you have a GREAT auditing system in place and GREAT communication daily with your drivers. 

Again, I'm just scratching the surface of the EMPLOYEE issue.  There are Liability issues, insurance issues, tax issues, payroll issues, and many more to think about.  Not trying to scare you, but trying to give you real life situations that many people don't think about when considering hiring employees.  I hope this helps.  Just my 2 cents.  :) 

Those are all excellent points flintflash and thank you for sharing your knowledge and experience. The more I think about this, the more I think that perhaps the best way to do this is either 1 of 2 ways...............

A) Establish the routes then try to sell them as quickly as possible on Craigslist. There would still be some residual (be-it much less) with the portion of the royalty fee that my company gets per box. They sign a contract upon purchase of the business which indemnifies my company (and the non-profit) from any actions the vendor might take that could damage us otherwise.

The positives of doing it this way would be

1) Since it would effectively be their business, all of the logistical problems you mentioned above would be eliminated.

2) Because those problems would not exist, it would free me up to get out a whole lot more routes across the country with this.

 

The downside of doing this would be

1) It might be very difficult to sell these businesses on Craigslist to people. Do you happen to know of a better way these could get sold?

2) I wouldn't make as much money per box this way.

 

B)) Give people a flat salary to run routes (say $100-$200) with the option to buy the route. They would pick up candy that my company orders at Sam's Club, run the run and then deposit money into the bank which would then be transferred to my companies account (minus their salary.)

The positives of doing this would be

1) It would prove to people that doing this is extremely lucrative versus the overwhelming vast majority of other jobs that they might find elsewhere.

2) I think it would be a good "selling point" because it would get around the walls that people automatically have to anything that says "work-at-home business opportunity." People DO NOT want to pay money to make money.

3) I think it would be much easier to get people involved in doing this using this method than the first method (above) freeing me up to grow this faster.

The downsides to this would be

1) It would require a tremendous amount of trust on the other person not only to run the route but then deposit the money and transfer it to my companies account. Do you think I could get my insurance company to cover this and do you think I could get some form of legal contract I could have them sign that says they must deposit the money within a certain amount of time otherwise face criminal prosecution? I've also thought about requiring a credit card number that would be charged in the event that they try to "run out" but they could always cancel the credit card. Can you think of any other way of doing this that would mean "teeth" in it for them if they tried to pull something shady?

 

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Good luck with a contract.  You're dealing with cash and it's hard to prove any cash loss and no insurance company will cover you.  For someone with such a large business I'm surprised you don't know how insurance coverage works.

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It sounds like you want your cake and eat it too.  

If you're going to sell all or part of your business, then sell it.  Don't charge royalties for it too.  That's not fair at all.  I don't pay royalties to the previous owner when I buy vending machines or routes.  Who would want to do that?  If it's something like a pink-ribbon charity, then they will be responsible for that.

If you're going to hire an employee, then give them a fair wage and provide vehicles for them.  You can put all kinds of policies in place in this instance but it's very difficult to prosecute them without proving that they did anything.  If a driver can steal money, product, or anything else then anyone else can too... and that means that you can't get the driver prosecuted unless you can prove they did it.  You also can't prove whether they are reporting the actual cash or not.  You really can't prove much of anything without constant supervision, which sounds completely unprofitable.

If you hire a contractor, then I think your best bet is to charge some kind of fee like I stated.  It eliminates the risk of theft because it is THEIR money and THEIR product.  They have an incentive to do a decent job because they want to maximize their own profits.  Assuming you don't have anyone doing this for you now, then there is NO real way to hire someone to do the work without losing significant profits.  That's just how it is.  

By hiring a contractor, you can easily write up a simple like they have to deposit $300 upfront (just a random number I thought of) that is refundable after 90 days of service.  This way, you can provide them with a little product to get them started but you can also protect yourself if they don't pay their fees or if they just walk away without ever paying for more product.  You just need them to deposit enough money to cover your costs and no more.  You can't try to milk someone for every penny and expect them to think they are getting a deal.

Would you ever buy a car but you had to pay the previous owner royalties for miles driven?  Would you ever want to work for a company that threatened to prosecute you if anything was off BUT they couldn't actually prove that you were at fault?

You mentioned the idea of paying a salary of $100-$200 to run the route.  Unless they can make at least $20/hour, then I see no benefit.  If they have to provide their OWN vehicle, then who pays for wear and tear? Who pays for gas?  I just really get the impression that you want to make all of the $$$$ while paying someone pennies... all while threatening to prosecute them and/or try to take more money away from them if you suspect anything is up.  The ONLY way you can effectively control someone is by hiring them as an employee and providing everything they need to do the job, including a vehicle.  If you're willing to give up some control, then you go the route of the independent contractor and let them do what they want, but they need to make MORE money to pay for additional expenses since they have to provide their own vehicle and fuel. 

All things being equal, you cannot hire someone to take over a task that you did yourself without losing profits.  That's just the way it is.  If they're going to do the bulk of the work in a cash business, why worry about all of that when you could just charge a rental fee? You're no longer liable for anything except protecting your business reputation, and you have every right to fire the contractor at any time, and you can still prosecute them if they damage your business (ie. slander your company name, steal/damage boxes, etc...).  Aside from that, they make the majority of the profits but they also pay the majority of the expenses while you get a fee.  You said you had 1200 boxes.  If you only made $2 profit per box per month at 1200 boxes, that's $2,400 each month!!! How is that bad?  Furthermore, if you had other people handling your business now, you would have the time to grow your business and add hundreds of more boxes that you could do yourself.  To me, it seems pretty clear that you could easily make this a very profitable endeavor but it seems as though you don't really want to see anyone else making money.

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I get the safeguard you are trying to put in place with the escrow, but if this individual is an "employee", you could have someone fighting this or suing you over this.  I'm not sure which state you are in, but in our state of Michigan, the Dept. of Labor would frown upon this.  I would hate to see this turn into a big mess for you down the line.  As far as how else to do this, I would think that you would need to instill some sort of management/supervisor.  I would test this out in nearby areas, where it would be feasible to check on and audit your route drivers routinely.  As you branch out in time, you could set up a "regional" manager who would oversee the drivers.  The problems that you will run into with drivers being this far away from you without any kind of supervision, goes further than just them stealing.  What happens if they don't service the accounts when they are supposed to run them, or what if they just up and quit?  How quick can you rehire and get a new driver trained and ready to take over?  Are YOU going to run the route in the meantime while you have no route driver?  If not, who will?  I'm not sure exactly the service schedule for the Charity Mint boxes (I call them that to differentiate in my mind from the Snack Tray honor boxes), but I know we have our accounts on a strict schedule.  Losing a route driver can really put us in a bind, so that is something to really consider when hiring people to run routes for you. 

Next, let's look at the possibility of account stealing.  I mean, what is there to prevent your new, trained route driver from contacting Sheridan Systems, purchasing a few hundred boxes and Pink Ribbon stickers and going out and stealing your accounts from you. Or just becoming a competitor.  No "non-compete" will stand up in a court, unless you have a REALLY SOPHISTICATED Non-Compete drawn up by a lawyer. (And even many of those don't stand up in court).  Someone could easily replace your boxes over time and put you out of business in that area for a while, EVEN if you did call the accounts to verify that they were pulled when the driver said they were.  There are many ways they could do it and you wouldn't find out until it was too late.

And then of course, there's that STEALING issue staring us in the face.  With my company, could someone take all my money and turn in a route full of empty coin boxes?  YES.  Would I catch it right away?  YES!  I also have my own insurance policy that covers that as well.  There is no way that I could hire a route driver and then ask them to put a $1500 deposit into an escrow account to cover any possibility of theft.  Pretty much anyone that you will hire to run your routes won't have that kind of money available to put into an escrow account, even if they wanted to (which they won't).  Theft is just the risk we take when hiring drivers for the HONOR system, because THEY are on the honor system as well as our customers.  All you can do is to make sure you have a GREAT auditing system in place and GREAT communication daily with your drivers. 

Again, I'm just scratching the surface of the EMPLOYEE issue.  There are Liability issues, insurance issues, tax issues, payroll issues, and many more to think about.  Not trying to scare you, but trying to give you real life situations that many people don't think about when considering hiring employees.  I hope this helps.  Just my 2 cents.  [emoji4] 


You're in Michigan eh? Hello neighbor! Down in Detroit area!

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8 hours ago, AZVendor said:

Good luck with a contract.  You're dealing with cash and it's hard to prove any cash loss and no insurance company will cover you.  For someone with such a large business I'm surprised you don't know how insurance coverage works.

Hey AZ, I wasn't sure if your response was to me or karen99.  My comment about the insurance to cover theft was in regards to a complete theft situation.  No insurance policy will cover any loss as far as shortages from the boxes (or vending machines for that matter).  However, you can get an insurance policy that will cover theft that results in, say, the entire deposit was stolen or the driver runs off with your truck and all the product and money.  I was suggesting to karen99 that, unless she has the correct systems in place, there is no way an honor system spread this far away with no supervision will work.  :) 

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