How to start a vending machine franchise
Could this surprisingly varied opportunity be for you?
A vending franchise is the means to this end and it often proves to be a surprisingly varied career opportunity.
What is it?
The world of vending machine franchises is not large but considering the products on offer, it is significant. Unusually among franchises there are a number that can be run on a part time basis as well as full time so you can largely choose your hours. Although be aware this is not the case with all.
Drinkmaster largely does what it says on the franchise. It provides machine dispensed coffee, tea, chocolate and soft drinks as well as soft drinks like orange, blackcurrant and so on.
The franchisee's job is to promote the brand to potential customers throughout a designated territory, deliver products and provide customer care. And although it is their job to grow the territory, they have an existing client base from day one.
SSL International is the parent company of Durex vending, which services mainly pubs with condom vending machines. Unlike the others this is only a fulltime franchise but you make your own appointments so is therefore still flexible in terms of hours.
Some technical aptitude is required for the work as you are required to service machines as well as re-stock and collect money. But to really grow the business, you will also need to find new business so a good way with people is also a helpful attribute.
A Vendor supplies bottled Evian and Volvic flavoured water to any public space that might provide a marketplace: schools, leisure centres and so on. This is really a part time franchise – at least to start with – 10 machines can be serviced in one day. It is ideally suited to people who want an extra income.
To operate a successful franchise you really need to know your local area well. If you are required to go out and convince people their space would benefit from a vending machine of some kind, then you need to know where to approach to get the best return.
This is particularly the case when you are doing your own marketing and finding your own clients but it is also important if the franchisor has a telesales department and places the machines for you – as Vend'or does – so you can point them in the right direction.
None of the franchisees we spoke to had to place adverts, preferring to meet with people to discuss whether they would benefit from a machine. Although there is an element of cold calling this is not a hard sell business. Again, being aware of public spaces and businesses in the area will help with this.
For beverages it is likely you will have to visit at least once a week to stock up the machine. And unless you are called out more regularly this is the time to make any repairs needed. All franchisors provide backup or send out a third party do more complicated repairs.
“In spring and summer routine visits take longer because more stocking up is needed,” says Mandy Robinson of Vend'or in Norfolk. “But I'm still choosing my hours which works really well being a mum.”
With SSL you won't have to visit as often – between four and 12 weeks will be sufficient. Although you are likely to have many more machines to service with it being fulltime – 15 a day is recommended although you can choose to do more and only go out three or four days a week instead of five.
None of the franchises are particularly physical although most of the work is outside the home. And while there is some administration with all of them you aren't really tied to a desk at any point because they are cash businesses – which means no chasing up payments.
“The thing I like best is getting out and about, meeting clients and doing demonstrations,” says Derek Thomson of Drinkmaster in Somerset, “Keeping up with all your customer base is important.”
Initial costs vary enormously from franchise to franchise. With Vend'or you are actually buying the machines and the initial £20,000 gives you 10 placed machines to get started with.
But as franchise manager John Mellor explains, “With SSL, you only buy from an existing franchisee as all territories are covered. This means the amount you pay depends on the stock and the size of territory. It could be £20,000 and £40,000 respectively.”
However all the franchises have very low overheads. You just need somewhere to deal with any admin that comes up and somewhere to store the products. Obviously bottled water takes up more room than condoms but neither has a short shelf life or is particularly perishable so a garage or outhouse is sufficient if you don't have room in the house.
And you don't have to have a flash expensive van either. In the case of SSL some kind of van is needed but with Vend'or and Drinkmaster providing you have a car at your disposal there's no extra cost here either. Just petrol is the main cost – and paying out for the stock – but you will learn the best ways to cut these by planning your routes and ordering at the right time.
Part time franchises like Vend'or are designed to offer a residual income – although it estimates that for eight hours work a week you could take home £8000 to £10,000. With SSL and Drinkmaster, longer hours equal a greater income but all the franchises require you work hard to make the money.
“Bringing on new customers is key,” says Margaret Bunton of Drinkmaster. “You need to get out as much as possible and meet people. This will generate new and repeat business.” It's worth reiterating that knowing your local area in this way will get you known in the area and increase your chances of expanding and improving the business.
And to make money you really need to enjoy the work. With SSL you'll be seeing the inside of a lot of pub toilets so it's important to relish the challenge and like meeting the people you come into contact with. With Drinkmaster you'll be going into other people's offices rather than working in one yourself so you need to decide if this is for you. And with Vend'or:
“You need to build a relationship with your clients,” says Mandy Robinson. “I sometimes even stop for a cup of tea and a chat if I have time – they're friends.”
Vending isn't a complicated business but it won't suit everyone. You won't necessarily make big money and you will largely be working on your own with remote backup. But if you like a challenge and definitely don't want to be stuck behind a desk all day, vending machines could push your buttons.
What are the steps to vending success? Here are our top five:
- Make friends at all your jobs. Building a relationship with people you only see at intervals is hard but it will reap rewards in terms of repeat business, referrals and general good will.
- Don't just stick to obvious places like leisure centres. For beverage franchises, you can place machines anywhere there are people: schools and even places like magistrates' courts are good revenue sources.
- These are all cash businesses and you will have a lot of pound coins to pay into the bank. Banks charge for counting change but post offices don't. Pay into a post office and pay from there into the bank.
- Keep researching your area especially once you have the franchise. You know your local area best and in order to find the best vending sites you need to continue to increase that knowledge.
- Motivation is key, a successful franchisee will get out and find new locations and meet people constantly to find out what's needed. You can't be afraid of being a salesman – especially as these aren't hard sell products.