Common seller tricks in vending
Sellers will show a list of stops and a generous cash-flow number. The list is only as good as the contracts, and the cash is only as good as the records.
- Locations that are verbal, expired, or controlled by a manager who likes the seller personally.
- Machines counted as active that are unplugged, low-volume, or about to be evicted.
- Cash collections that cannot be tied to machine-level reports.
- Stale or expired product left in the valuation of inventory.
- Card-reader income mixed with cash without a clean split.
Which numbers to verify
You want machine-level or location-level sales, not just a total. Reconcile cash and cashless deposits to those reports for a long sample, not a selected week. Split food, snack, and drink if relevant. Route density (stops per hour) matters. Recast the owner’s restock days. Inventory should be fresh and counted at a realistic cost.
Licensing and key-person risk
Health permits for food machines, sales-tax accounts, and sometimes location-specific rules apply. The more important ‘license’ is the location agreement: who can kick you out, and on what notice. If a school, hospital, or factory is a stop, their procurement rules may not transfer automatically.
Equipment and condition
Machines and card readers have an age and a repair history. A route of old cabinets with failing bill validators is a capex plan. Confirm software and cashless accounts are in the company’s name. Vehicles used for restocking should be inspected like any other route truck.
Seasonality and the calendar
Schools, offices, and factories have calendars. A summer dropout at a campus, or a plant shutdown, should be visible in the monthly numbers. If the seller annualized a busy semester, redo the math.
Customer concentration
A few high-volume locations often make the route. If a single factory or hospital is 30% of sales and can cancel on 30 days’ notice, that is the risk. A well-spread office route is safer than four ‘great’ stops.
Questions to ask before you make an offer
- May I see location agreements, notice periods, and any commissions paid to the host?
- Please provide machine- or location-level sales for at least 12 months, reconciled to cash and cashless deposits.
- Which locations are more than 10% of sales, and what would notice look like if they cancelled?
- May I ride a full restock day and inspect a sample of machines, including unplugged ones?
- How old are the machines and card readers, and what is the repair history?
- How is inventory counted, and what is expired or unsaleable?
- What health or sales-tax permits are required, and do they transfer?
- How much of the route does the owner still run personally?
- Are there unpaid commissions to locations or disputes over shrinkage?
- After an LOI, may I speak with your accountant and a location manager at a top stop?