Listing ID: 76938
This well-established vending route has at least 2 machines in 40 active locations (8 more are placed in inactive locations due to COVID). The company has a total of 130 machines, 47 of which are in storage (30 are functional). The routes are largely based in the San Fernando Valley, with these supplemented with a Downtown Los Angeles and Orange County route. As a result, the owner-operator restocks and maintains the
unites 3 days per week, 10 hours per day. They do not have or require contracts.
Note: This business is NOT an SBA loan qualifier and Seller Financing will not be offered. There is little if any negotiating room on this sale.
- Asking Price: $185,000
- Cash Flow: $69,000
- Gross Revenue: $138,000
- EBITDA: $69,000
- FF&E: $120,000
- Inventory: $8,000
- Inventory Included: N/A
- Established: 1996
- Property Owned or Leased:N/A
- Property Included:N/A
- Building Square Footage:N/A
- Lot Size:N/A
- Total Number of Employees:N/A
- Furniture, Fixtures and Equipment:N/A
The 120 (90 working) vending machines will be included in the sale. The are comprised of a variety of brands that include Royal, Vendo, AMF, Rowe, and several more. The most common unit is the Royal 660 Coke machine, followed by the Vendo Pepsi units. 6 of the total units accept credit cards, do electronic inventory and provide activity reports. 50 accept dollar bills, while other have elevators and all have meters. The overall mix includes soda and snacks, with one coffee unit. Some of the units would cost $7k if purchased new, while others may be $2.5k - $3k new. Fortunately for a buyer, the owner is not pricing the business based on equipment value, despite that value amounting to a substantial portion of the purchase price. An estimated $150/unit in inventory (approx. $8k total) in inventory will be sold at cost at close; while $30 in change per machine will be reimbursed (approx. $2.4k total).
The owner will train for 2 weeks at 30 hours per week.
Due to the nature of the locations limited direct competition exists. There are the only vendors that operate in the locations.
New operators can find locations for the 30 – 40 dormant units themselves or engage a locator for placement – as they no longer have a vending unit locator they work with. As management sources product from discount vendors, new management evaluate using specialty wholesalers such as Jetro/Restaurant Depot or a number of wholesale vending product suppliers. Bulk purchases can also further improve margins. They may also consider adding units or optimizing product selections in existing locations. The company does not place units in schools due to past vandalism issues, despite these being lucrative locations, they do service school staff in one non-LAUSD district. New management may return to schools. Finally, in October 2021, soda prices were increased from $0.75 to $1.00 without issue, and 2 located (4 units) were added. The impact of the additional locations and price increase are not indicated in the financials.
The business was founded in 1996, making the business 26 years old.
The sale doesn't include inventory valued at $8,000*, which ins't included in the listing price.
Why is the Current Owner Selling The Business?
There are all kinds of reasons why people decide to sell businesses. However, the true reason and the one they tell you may be 2 completely different things. For instance, they might say "I have way too many various obligations" or "I am retiring". For many sellers, these reasons stand. But, for some, these might just be excuses to attempt to conceal the reality of changing demographics, increased competitors, recent reduction in incomes, or an array of other reasons. This is why it is very crucial that you not rely totally on a seller's word, however rather, make use of the seller's solution along with your total due diligence. This will paint a much more reasonable image of the business's present circumstance.
Existing Debts and Future Obligations
If the current company is in debt, which lots of businesses are, then you will need to consider this when valuating/preparing your deal. Many operating businesses take out loans in order to cover things like stock, payroll, accounts payable, so on and so forth. Bear in mind that in some cases this can imply that earnings margins are too small. Numerous organisations come under a revolving door of taking on debt as a way to pay back various other loans. In addition to debts, there may likewise be future commitments to take into consideration. There might be an outstanding lease on equipment or the structure where the business resides. The business may have existing contracts with vendors that must be satisfied or may result in charges if terminated early.
Understanding the Customer Base, Competition and Area Demographics
How do companies in the location attract brand-new customers? Most times, companies have repeat customers, which create the core of their everyday profits. Specific factors such as brand-new competition growing up around the area, roadway construction, and also employee turnover can influence repeat customers and negatively influence future profits. One vital thing to consider is the placement of the business. Is it in an extremely trafficked shopping center, or is it concealed from the main road? Undoubtedly, the more people that see the business on a regular basis, the higher the chance to construct a returning customer base. A final thought is the basic location demographics. Is the business situated in a largely inhabited city, or is it situated on the outskirts of town? Just how might the regional typical home income impact future earnings prospects?