How to Franchise a Vending Machine Business: The Ultimate Guide 2022
Have you seen ads on Facebook, Google, and YouTube, for vending machine opportunities? I don’t know if I looked at just one, but I keep getting ads. And I want to go through today’s video to see if a vending machine business for sale, franchise opportunity, the business opportunity is worth it, and what you can expect to earn if you do decide to pursue a vending machine franchise.
Vending machines are a pretty popular way to earn passive income. They require low maintenance, and you can earn money simply by having a vending machine in the right location. I say location, location, location. It’s very important where the vending machine is, and we’re going to through that and other key aspects of owning vending machine business routes in today’s video. We’ll go through the costs, as well as how to start a vending machine from scratch, or even buy an existing vending machine operation. You can expect a vending machine to cost anywhere from a few hundred dollars up to $10,000 plus. If it’s going to be an ice vending machine that you see at gas stations outdoors, those are very expensive equipment.
Vending Machine Business in Numbers
The overall industry, in terms of vending machine operators, 67% of operators are pretty small, making less than $1 million from their operations. However, we have some pretty big corporations that own multiple vending machines and have a mini empire, where 10% of vending machine operators are making more than $10 million in revenue a year from the business.
You need to structure a budget to ensure that the revenue outweighs your costs because there are associated costs. And if the vending machine is making, say, $1,000 a month for the products, and the maintenance, and for your time, if you want to budget that in, the cost might be 40%, 50%, 30%. It’s gonna depend on the product. But it’s generally a pretty high-margin sale. It can be hard to get a lot of money going as many vending machines are just making $100, $200 a month.
Forty-five percent of vending machines are in factories or offices, followed by hotels and schools.
The best vending machine opportunities are gonna be in top locations. And that might be a benefit of going with a franchise or a business opportunity, as generally, they have a corporate office that’s really gonna analyze the location on your behalf.
Vending Machine Business Opportunities
Some of the start-up costs, if you want to get into the vending machine game, and then you're looking to start from scratch and not go for that vending machine business for sale, is the license, insurance, leasing, inventory, and transportation.
HealthyYOU Vending
They sell 2,500 different products at wholesale prices. You as the owner have a ton of different options to go through. There’s only a one-time initial cost without any ongoing fees like a franchise. The software informs you about everything, how to optimize price, and really how to maximize your revenue. They make the process easy in terms of finding the perfect location wherever you are in the United States. And then Naturals2Go is similar to HealthyYOU. It seems like they have a pretty strong rivalry, as it provides healthy vending alternatives. And they have 10,000 items to choose from, which honestly, for me, I would be overwhelmed. I think I could choose from, like, 100 items, let alone 10,000.
Clothes Bins
Clothes Bins it’s basically textile, and clothes recycling that allows entrepreneurs to collect throw-away materials and be able to earn a profit from this free resource. Bins are strategically located in high-traffic areas such as schools, shopping centers, gas stations, and even business parking lots. And when initially starting up, you’re required to open up at least 20 locations in a territory, and you have to be able to handle up to 60 bins. Also, there are some franchise options, like Ice House America, where these machines are expensive, where it can range anywhere from $60,000 for their smallish merchant machine, all the way up to $135,000 plus for the Ice House.
Vending Machines: New or Used?
Those are a couple of business opportunities, a franchise. You can also visit business-for-sale websites, like BizBuySell or even our Business For Sale section of Vetted Biz, that primarily has Florida businesses for sale, to find your ideal vending machine business for sale. There are many vending machines for sale across the country. Valuations are really across the board, where generally, you have to pay three to six times the cash flow for a vending machine business. And again, I mentioned revenue varies quite a lot.
Now, if you’re looking to buy the actually used machinery, it could be as little as $300 online, whereas a new machine might be closer to $3,000, $4,000 to buy a new vending machine. If you go with a franchise or business opportunity, though, they will be stricter than if you operate your own independent vending machine business. But going your own way, you’re gonna have no support from a franchise or a corporate office, as well as no collective negotiating power when you’re dealing with the vendors of the products.
Conclusion
The vending machine industry is highly competitive, and there isn’t that much transparency in terms of pricing. We spent hours digging through the information that there was on vending machine businesses for sale, business opportunities, and franchises. There’s not so much information in this space, where the companies don’t disclose much in terms of revenue, and profits. And there’s not much performance data that you have in other industries that we’ve explored on Vetted Biz.
Many vending machine operators say it’s purely a numbers game, as some perform well and others are major failures. That’s part of it, where if you’re just gonna own three vending machines, probably not worth it. You’ve gotta have a little mini empire, 30, 40, 50, 100-plus. But be sure to talk to existing vending machine operators to see how they’re doing, and perhaps someone that doesn’t live in your immediate area, as you could potentially be their competitor.
