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New to Vending - Looking for Advice on Route Purchase


Fred

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I posted this in the newbie forum, but wanted to post here as well.

Hi all, I've done a ton of research and am planning to make the plunge and buy my first location. I've read various advice on the purchase price for an existing location/route and seen everything from 6 months net to 12 months gross (the latter seems very high to me). So, my question is, what is a reasonable price to pay for a location? Obviously no verification of income. Specs of this particular location are:

- Local mall

- 5 snack machines

- $550/month rent to mall owner + 15% of amount over $1000/month gross

- Claimed gross monthly income $1300-$1900/month, which I've determined to be about $300-$700/month net, after the rent, insurance and snack costs.

My plan is to request terms with the final price based on the actual income earned after 3 months, but I'm also looking for some general advice on multipliers for purchasing existing locations. Thanks in advance.

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I posted this in the newbie forum, but wanted to post here as well.

Hi all, I've done a ton of research and am planning to make the plunge and buy my first location. I've read various advice on the purchase price for an existing location/route and seen everything from 6 months net to 12 months gross (the latter seems very high to me). So, my question is, what is a reasonable price to pay for a location? Obviously no verification of income. Specs of this particular location are:

- Local mall

- 5 snack machines

- $550/month rent to mall owner + 15% of amount over $1000/month gross

- Claimed gross monthly income $1300-$1900/month, which I've determined to be about $300-$700/month net, after the rent, insurance and snack costs.

My plan is to request terms with the final price based on the actual income earned after 3 months, but I'm also looking for some general advice on multipliers for purchasing existing locations. Thanks in advance.

You can figure value any number of ways. I usually start with 50% of previous 12 months DOCUMENTED sales and adjust up or down from there based on any number of factors, age and type of equipment, contracts, even level of interest. In this case the 50% figure is possibly less than the value of the equipment, assuming that the mall owners insisted on fairly new good looking equipment. Personally, I would not get all that excited about the location due to the flat monthly rent. I have little interest in a location in which the commission is based on some type of flat fee, especially one that high.

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Thanks for the input. I'm going to check out the location tomorrow.

Machines are 2 AP Snack 113, 2 National 147 and 1 National 157. I've found the 147 on ebay for ~$1800, the 157 for $1200 and the 113 for ~$1350, one for $1000 on craigslist.

I know the mall and it is a busy mall with a lot of traffic. I'm not opposed to paying rent, as long as the deal makes sense.

Any input on what, specifically, other than traffic and condition of the machines, I should look for when I visit the location? I'm meeting with the seller as well and plan to get there early to check things out without him. Questions to ask?

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i wouldnt pay rent with a net of only 300 to 700 a month but thats just my opinion. I just moved 6 machines doing $1200 a month paying commission to another location making more and no commission.

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Thanks for the input. I'm going to check out the location tomorrow.

Machines are 2 AP Snack 113, 2 National 147 and 1 National 157. I've found the 147 on ebay for ~$1800, the 157 for $1200 and the 113 for ~$1350, one for $1000 on craigslist.

I know the mall and it is a busy mall with a lot of traffic. I'm not opposed to paying rent, as long as the deal makes sense.

Any input on what, specifically, other than traffic and condition of the machines, I should look for when I visit the location? I'm meeting with the seller as well and plan to get there early to check things out without him. Questions to ask?

Look for possible damage from previous vandalism attempts. Are the mechs and bill acceptors OEM or replacements?

Get the pricing on items sold and your cost to buy so you can look at margins. A copy of the agreement, can you raise prices, do you need to purchase liability insurance, how long is the remaining term?

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  • 1 month later...

if you are just getting into the biz, or wanting to get into...then look into starting off a diff. way maybe, try buying a route from someone or partial route of biz locations,u will get a lot more help from the seller if he is decent and willing to help, or contracted to help......

sounds like u r jumping into the fire right off the bat, with a mall purchase

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