Buying a large route

[The Crippler]

Hello and Happy Easter,

I have been approached about buying a large route/business from a man who needs to retire for health reasons. He has offered me a significant amount of placements and machines. Our initial discussion was either a price per placed machine, or a price per location no matter how many machines are at the location. I haven’t really sat down with him to look at stuff in detail and because this is primarily a cash business I am not sure what I would see money wise. He has been in this business his entire working career.

Has anyone purchased per machine or per location and what might be a fair price for each? Machines are Oak/Astro or NW, some decals/stickers too. Price per machine does not include machines in the warehouse, those are just thrown in as parts, etc. Only machines on location.

Can pm me if needed.

Thanks!

Tom

[AMD Snacks]

how large are you talking? 1000+?

 

[The Crippler]

Yes

[AMD Snacks]

I've never bought a route that big, and in fact I don't even have a route that big now. (I do this on the side) But I have bought routes, and I do have a business, so I can tell you this: even though this is a cash business, if he's legit he should have records and tax returns. Especially for a route that big. Another thing I've noticed, is no one likes to sell themselves short when selling routes. Understandably they had to establish the route and so they think it's worth more than it probably is, not to mention we all have different standards of what is a machine in good condition. 

As for price, I've shot for roi. If I can get my return in a year I feel that's pretty good. So I'd price like that, and make sure I could check out a comfortable amount of locations to see what's what.  

[The Crippler]

Thanks, I have read others with routes for sale that seem to be pricing them at double the roi, meaning your roi happens at the end of year 2. I plan to look at what he has but I am sure it is likely understate some. Any others ever buy by placed machine or location?

[QuikVend]

I've purchased a few routes. Both bulk and full line. Typically, I end up going off of verifiable sales. Usually around 10 months of gross sales is what I aim for, as long as the locations are in good standing and equipment is quality branded and in decent shape. 

[rodney69]

I try to have it paid for in 10 months,  rarely ever more than 12 unless there's contracts in place to prevent loss of the location.  Never more than 18 months profit on bulk.  Rarely is that even considered.