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Are vending franchises profitable?

If you’re interested in getting into franchising you might be wondering where to start.

If you’ve never been self-employed before or worked within a franchise model, one of the best places to start is, well, “small”.

One of the many beauties of franchising as a system is that you can begin modestly and grow rapidly, learning a lot about running a business and working with a franchisor as you develop your enterprise.

Low cost, easy to maintain and simple to get started with, vending machines offer a very good first franchising opportunity, which many choose to continue as they expand their operations.

But are these seemingly simple machines a good investment?

Will they generate returns?

Will they help you learn the franchising ropes?

We’ve got all of your most important questions covered in this article. Let’s start with the biggest one…

Are vending machines a good investment?

Franchising is all about what you do with what you’ve got. While some franchisees sink, others swim – and indeed flourish.

This principle is the same across all franchises, vending machine businesses included. Put time, graft and energy into growing your vending machine franchise and there’s every chance that it will prove profitable and ultimately repay your initial investment many times over.

We asked “Franchise King” Joel Libava whether he thinks vending machines are a good investment. Here’s his expert view on this particular type of franchise:

“Franchise King” – Joel Libava

One of the great things about owning and operating a vending machine business is the simplicity of the business model. Place your machines. Stock your machines. Collect your money. Re-stock your machines. The most powerful word I used: “Your.”

“It’s your business and your money. How great is that? And, once your locations are up and running, your income tends to be pretty steady.

“As an added bonus, when you team up with a franchisor like TUBZ, you even get locations to place your machines!

In short, the answer to the question of whether vending machines represent a good investment is: yes.

A fantastic first step into the world of franchising, vending machines offer beginners the simplicity and the tools they need to become profitable more quickly, with much less margin for error than a more substantial or complex franchising opportunity.

By the same token, the reason why vending machines can be found at every office, station and lobby is that people use them. Convenient and well-used, vending machines are not going to be in less demand any time soon. Right now the Tubz team operate over 2000 machines directly and 30,000 through franchisees.

How much does a vending machine franchise cost?

A key part of assessing whether or not vending machines will represent a good investment for you personally will depend on your own financial circumstances, plus the terms and rates offered by your franchiser.

This varies from franchise to franchise, but our own rates here at Tubz are a good general guide: our Basic Business Bundle costs £2,499+VAT and includes ten machines, with no ongoing costs.

But in other cases the “up front” price is not the only financial investment you’ll need to consider. You should also factor in:

  • Restocking costs

Once your machines have been plundered by hungry customers, it’s time to restock – which requires a small investment each time. How much this cost will depend on the contents of your machines and how regularly restocking is required. Our Basic Business Bundle includes restocking costs, which means that, with Tubz, this expense is covered.

  • The cost of repairs

You’ll need to keep your machines in great working order to run a successful vending machine franchise. The “tower style” machines that comprise our Basic Business Bundle include a 2 year guarantee and are designed to be very simple and an cost-effective to fix, with interchangeable parts which cost as little as 60p to replace and not more than £25.

But this isn’t the case with every vending franchise. Many machines are large, electrical and more difficult to repair. Remembering to budget for fixes is therefore very important.

When can I expect to see a return on my investment?

How soon you can be earning a return on your investment depends on a number of factors, from the location of your machines, to how proactive you are as a franchisee. Our machines allow franchisees to make money from day one, and see a return on their investment within an average of six months

How many machines = how much profit?

It’s a fairly straightforward equation – the more machines you operate, the more money you can potentially make.

Of course, factors like location come into play, affecting how much profit each tower generates, but with more machines you stand to see a return on your investment more quickly. Here are a few predicted average turnovers from our Basic Business Bundle:

Towers10 Sales Per Tower Per Week20 Sales Per Tower Per Week30 Sales Per Tower Per Week
10£5,200£10,400£15,600
25£13,000£26,000£39,000
50£26,000£52,000£78,000
100£52,000£104,000£156,000

Nothing can be guaranteed of course but you can find out more about average turnovers on the business bundles page.

So are vending machines a good investment?

Let’s get back to our first and most important question to round off our guide…

If you are proactive, ready to learn and keen to make the effort with a small franchise, vending machines are absolutely a good investment, presenting very little risk and plenty of opportunity to see profit quickly.

Of course, not every franchise is a huge success, but with a bit of drive and persistence, most people should find vending to be a rewarding venture.

If you want to find out what our existing franchisees have to say take a look at our testimonials section.

To ask any questions on franchise investment just get in touch on 01795 414 480 or info@tubzbrands.co.uk.

Author: Tubz