The vending business is about location and presentation. A route owner needs to have quality machines that attract attention, offer a good selection and take up minimal space. In addition, a route owner wants to place those machines in high-traffic areas frequented by consumers looking for his product. Sometimes it takes years to build up an established route that turns over a good profit. Those looking to extend their route portfolio or those looking to break into the business may find purchasing an existing route can offer a fast track to profitability. Doing so requires due diligence, or the investment might turn out to be a waste of time, money and resources.
Verify the relationship the current route owner has with her locations on the route and that the machines are keep in good working condition and restocked on time. This involves interviewing the locations on the route and ascertaining whether the locations have a favorable view of the current owner. You do not want to purchase a route with the risk of losing valuable locations due to bad relations with the current owner.
Determine the types of machines used on the route and the conditions of the machines. Do the machines break down frequently? Are the machines easy to service? How hard is it to restock the machines used? A good vending route relies on quality equipment that requires minimal maintenance, and when problems do occur, the equipment needs to be up and running again quickly. Customers tend to remember machines that don’t work half the time or machines that take their money but neglect to dispense products.
Review the sales trends of all locations on the route. Sometimes this may be next to impossible if the owner has not kept accurate records; however, reviewing sales trends over the past two years is essential to understanding the longevity and strength of the route. You should walk away from routes that are poorly managed. If the current owner fails to document sales trends, it is a good indicator of his typical approach to the management of the route.
Hire an attorney or an accountant to review all the route's financial records, in addition to reviewing the sales trends, to verify the profitability of the route. Review all financials for a period going back two years or more (up to five) if possible. An accountant or an attorney can help ascertain whether the documents are authentic and in order.
Take a ride on the route with the current owner and gain an understanding of how long the route takes to service and whether the route will meet business goals and objectives.
The typical selling price of an established, profitable route is about 70% of all annual gross sales. For example, a route with annual gross sales of $30,000 will sell for $21,000.