What should I offer for very profitable route

[s.weir]

Hey everyone haven't posted in a bit, but I have come across what could make a beautiful expansion to my business and I could use some advice on what to offer them.  I have already asked to see if they would consider financing their route and while I have a feeling the answer will be no, I have my hopes up.  here are the figures:

Location #1 2009 Gross Revenue $16000

Showcase 748 Deli machine

Café Diem coffee machine

Dixie Narco Snack machine with bill changer(chips/chocolate)

Location #2 Gross Revenue $25100 for 2009

Showcase 738 Deli machine

Café Diem coffee Machine

Dixie Narco Snack Vendor with bill changer

Location #3 2009 Gross Revenue $36000

Showcase 748 Deli machine

Café Diem Coffee Machine

Dixie Narco Snack Vendor

A full size pop machine

Separate Bill changer

Location #4 2009 Gross Revenue approx $1000

Small stand-alone pop machine

Snack vendor

Location #5 2009 Gross Revenue approx $500

Full size snack vendor

Unplaced machines

Raddatz combo pop/snack machine

Bill Changer - 5000 loonie capacity (purchased from a casino)

2 head Beaver Bulk candy vendor with stand

Locations #1-3 have gone through a recent price increase and will see an increase in revenue.

Asking $90000

Looking through this I just realized I really want to stick to just canned/bottled beverages and snacks (not deli or coffee) so maybe I can make an offer along those lines.

[RJT]

What is a "Showcase" Deli machine? Who makes that? Are you referring to the Rowe 748? Is the coffee machines the AP 223 "Cafe Diem"? Other than the Dixe Narco drink vendors I am not familiar with the others or at least by those names you called them. I would ONLY buy existing equipment that has a trusted name in the industry like Crane National, AP, etc…

I would need more information before I could give you an answer. If you are not ready for cold food locations you might loose them pretty quickly. Cold food locations are some of the most demanding locations to have in vending.

What type of locations are these? Manufacturing? College? Call Centers? etc?

Number of employees per location?

Current contract?

How long have they had the locations?

Verifiable numbers? Deposits? purchase receipts?

Why are they selling?

Age of equipment?

Exact make and model of each machine?

Age of machines?

Total asset value

[s.weir]

RJT I just copied directly from the email.  I have decided this route is just too big for me to take on at one time (capital wise) so I don't plan on pursuing it further.

Thanks

[RJT]

Ask them if they will sell a location or two. If they say no then check back with them in a month or so and they may. No matter buying one location or the entire bunch I would want the questions I asked answered.

Stick with it and grow slowly and you will do fine….

Good luck!!!

[Technivend]

Rowe called their food machine "Showcase" and that includes the 748. 648, 548 and so on. The Cafe Diem is the AP 223 coffee. The Dixie snack has got me though. The only Dixie snack that I can hink of is the Bevmax converted to a couple of snack trays macking them into combo machines. In the warehouse you have an RPD combo, an undetermined bill changer.

Equipment wise underwhelming. Now time for due diligence and follow RJT's advise and start asking questions.

[s.weir]

I agree questions have to be asked, but this one is simply too big and I asked they don't want to separate their route.  So for now I am leaving this one.

[davekro]

IN your future shopping, avoid cold food accounts, especially if you are just starting out.  They are a pain to manage and even harder to make money on.  My perspective is that often a cold food machine should only be at an account that makes you big profit already on snack, soda and office coffee (w/ 250-300+ employees).  With the spoilage factor, cold food is very hard to make money on.  The machines are very expensive and the profit margins on product that you actually 'sell' (vs. throw away!) is smaller.  Plus people give a lot more 'suggestions' for what you 'should' sell in that thing.  A loosing combination. 

[RJT]

IN your future shopping, avoid cold food accounts, especially if you are just starting out.  They are a pain to manage and even harder to make money on.  My perspective is that often a cold food machine should only be at an account that makes you big profit already on snack, soda and office coffee (w/ 250-300+ employees).  With the spoilage factor, cold food is very hard to make money on.  The machines are very expensive and the profit margins on product that you actually 'sell' (vs. throw away!) is smaller.  Plus people give a lot more 'suggestions' for what you 'should' sell in that thing.  A loosing combination.  

100% accurate advice. If you are not ready for cold food style accounts (large accounts) you will most likley loose it in a short period of time. While they can produce huge revenue they are the most demanding and the ones everyone also wants. All the BIG companies will knock on their door constantly waiting for you to stump your toe. They circle like sharks around these big accounts until they smell blood....