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I Was Cheated When I Purchased a Vending Location - What Should I Do Now?


fhamann
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I would like some advice on how to respond to this case.

Background:
On June 8, I was referred by my trusted vending machine repair man to a client of his that was selling his vending route.

I contacted the seller and he told me he wants to sell his entire route of 15 locations.  I told him I was interested in one of his accounts, and possibly others at a later date.  The account I was interested in is at two retirement homes owned by the same company with two snack, two soda and one combo machine.  The seller told me he has had the account for 8 years, but could not provide specific sales data since he never kept written records of his collections for specific locations on his route.  He estimated that the account grosses about $200 to $250 per week.  His asking price was $7000 for this one account.  The five machines are old, and are probably worth about $2500 in total.

He took me to see the locations.  He seemed to me to be an honest and open person who answered my questions in a reasonable fashion.  When we visited the locations, the bill boxes were empty, since he said he had just collected the machines a few hours before.  I told him I was interested in the account if I can confirm the gross sales.  We agreed to come back one week later to count the money in the machines.

One week later, on June 15, we checked the machines and I counted about $250, which was within what he had said his sales typically are.  Based on this collection, the next day, I went with him to meet the manager, and close the deal.  I paid him $7100 which included the product in the machines and some coins in the coin mechanisms.

The next day, on June 16, I filled the machines.  I checked on the machines a few days later and everything seemed fine, although the sales seemed low, but I did not count the money.  On July 4, eleven days after I had filled the machines, I checked them again and noticed that sales in this eleven day period was only about $140, it should have been closer to $300.

Today, 22 days since I purchased the machines, I collected and filled the machines.  The total collected was $292.  It should have been between $600 and $750.  

Conclusion:
I believe that he stuffed the bill boxes to trick me into buying this location for $7000.  What should I do now?  

Thanks for your advice.

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Sorry to see you got taken. As soon as I saw that you were going to go back a week later, I knew what was going to happen. In a situation like that, unless there is verifiable info(tax documents etc) the location is only worth the equipment value. 

Unfortunately, you learned the hard way. Now, all you can do is give then good service and hope the sales will go up a bit.

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I only pay the value of the machines plus a couple of hundred for the location. I learned the hard way also . The first account that I bought, the guy pulled at least $200.00 out of the validator and the change box was literally full , never being in the business I fell for it . I serviced the account a week later and only pulled $200.00 out . There's nothing that you can do about this except to use it as a learning experience like I did .


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Yea, you are pretty much ham-stringed.  Sorry to hear all this.  

I would give it a couple more weeks to confirm the bad numbers but I think the bad numbers will continue. 

If you are real pissed and motivated, you could look to see if the retirement home has cameras.  If might find him going into the building in that week period.  Even if you do, you can't do much with it.  Unless you have proof that he put money in, you can't do much with it.  

But like most of the earlier people said, just take the punch and learn from it.  Dad always says, things happen for a reason.  You'll look back at this one day and laugh.  Maybe not soon, but one day.

What contact info do you have of his?  We could all start calling him at random times of the night.  Send out a couple text bombs.  haha  

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To ease your pain, my dad worked for Lance years and years ago.  He was one of the top national guys in sales a couple years in a row because the route/area he had was just off the charts good.  Anyways, he was at his last account for the day.  Walked out to see that his back door had been broken into.  Opened up to see that every bag/box of money was gone.  Even the change had been taken.  (side-note, if I was going to rob someone, time/quickness I think would be my top priority so I would probably just grab the bills and leave the coins)  Anyways, it was all gone.  He said it was a little over 2K worth.  He proceeded to head home as he normally would.  We (mom, sister, myself) knew nothing of it for over a week.  Mom got all mad saying "why didn't you call the cops or do something about it"  He explained, as we have to you, there's not much he could have done, nor the cops.  He could have let it ruin his day/week/month but to my knowledge, he acted no different.  He had to come up with the 2K out of his pocket.  I learned that lesson at an early age.  What's done is done.  Control what you can control and try and not make the same mistake twice.

 

He did a couple days later buy a secondary lock for inside of the back door.  (the outside and only lock was pretty pathetic)

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Hi guys,

Thanks for the advice and encouragement.  I have decided not to let it get me down.  I will tell my repair man who referred me to this seller what happened so he does not make any more referrals for him.  I did not contact the seller or the police.

regards,
Frank Hamann

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Hello,

 

Sorry to hear that you got burned.  One thing I must ask though, why not take meter readings before and after? You can't fudge those. At this point I would seek ways to improve the sales of the location. Try swapping product choices, evaluate pricing, etc.

Richie

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  • 3 weeks later...

I would like to know what was in the agreement if there was one, for the sale of this location. Personally even if there was nothing in the agreement I would take the guy to small claims court and tell the judge that you paid for the location based on what was represented as the business it did - but that it does nowhere near that much and you believe the seller stuffed the cash boxes to make it look good.

If all else fails, since this guy seems to not keep good records, I'd drop a note to the IRS and tell them you suspect he is not being upfront with his income tax. Give him a reason to start keeping better records. If he's a crook with you he is likely a crook with them as well.

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  • 3 weeks later...
On 18/07/2017 at 10:39 PM, RichieRich said:

Hello,

 

Sorry to hear that you got burned.  One thing I must ask though, why not take meter readings before and after? You can't fudge those. At this point I would seek ways to improve the sales of the location. Try swapping product choices, evaluate pricing, etc.

Richie

Even then,if someone wants to scam you,he can.Just need to price an item at 50$ or something and do a few purchase.I know it is fucked up but some people would do anything.Recently,I have been buying locations only from a much larger operator I know well,he has a bunch of employees so all meter readings are kept on file and then put on a excel sheet.Last week he sold me three customers for 6600$ I gave him 2000$,I put my locks on,my business cards on the machines etc. and there absolutely no paperwork about our transaction.I will pay him back over 2-3 months with no interest.I love doing business like that.Confidence going both ways.It's the best

 

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