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Contract Question With Large Vending Account

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However, there might be one drawback we've encountered. The vendor in place originally had this location negotiated for by a business partner, whose name is now on the contract between the vendor and the location. We have met this person and he is telling us he would subcontract to us, even though he is not technically allowed to sell it under the terms of his deal. The seller has come to us and stated that in order for this sale to take place, they would want to keep the original business partner on the official contract, even though a bill of sale between us would stipulate the sale of the location, machines, etc to us.

The reason for this, they say, is to keep the location happy and not rock the boat. If they come to the location and tell them there is a sale, they worry that the location could get upset, and they don't want to ruin a good thing (this location does pretty heavy monthly volume). The seller has stated that he will notify the location that we are the new operators, but when it comes to the contract itself, the original business partner will have his name and company on it.

There IS a contract in place, which has two years or so left on it, and after that is set to auto-renew for one year, every year after that.

From our perspective, we wonder where that puts us. Should we significantly lower our asking price because of this? Is this type of transaction standard in the vending world for larger accounts? We are a little weary of operating the account if there is somebody else's name on it, although I would assume that person is taking on considerable risk as well.

We are also considering offering a large chunk up front and giving them the other chunk after the two year contract is up, that way they have some skin in the game and can act as our "middle man" of sorts between us and their business partner.

Curious to hear your responses!

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This seems very sketchy.  I don't understand what the purpose of this person being listed on the account when he supposedly gets nothing out of it.  You have a contract in place which would continue under your ownership.  That gives you plenty of time to prove to the account your reliability and customer service.  Something just doesn't seem right with this.  You don't need a middle man on the account.  I would have your lawyer look into this and I would definitely  be wary.

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