Investment Payback time Posted by Bigbee

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Investment Payback time

Posted by Bigbee in Ask The Experts on 26.08.2008 5:25:17 pm | 965 views

 

Comments

Matthew on 27.08.2008 11:39:03 am | Reply

Hi Rob

I think I know the company you are talking about and it does look a very interesting opportunity, refreshing to see a vending franchise in this area.

As you will be aware, return on investment can change a lot from industry to industry, with many franchises promising returns in the first year.  However I would never expect a return in the first year, at least not for most franchises anyway.  In the vending machine sector the profits are generally quite low, depending on placement and the type of vending machine on offer, but with the low hours it can be a great earner for little work.  Generally, due to the high cost of the machines, low franchise fee and generating market interest, crossed with the low returns that all these franchises have as their basic package (remembering you can always purchase more machines!) I would say a ROI of 1.5 years sounds about right and is pretty normal for this sector.

An example of another vending franchise I know in the food industry.

Initial franchise fee for 6 stocked units + extra stock: £8,995
Projected weekly turnover £145
ROI in 1.5 years - £1445

I would however like to point out that in the food vending machine franchise sector these profits can swing wildly and it is all about placement.

So, in answer to your question, 1.5 years sounds about right to me and is consistent for this sector.  

Hope that helps :)

 

Kind regards,


Matthew Anderson

The Franchise Shop

 

Bigbee on 27.08.2008 12:55:05 pm | Reply

Thanks Matthew,

It is assuring to know that my calculations are within the "ball park", for this business. I still have one or two loose ends to discuss with the company, although they do offer a buy-back plan should the machine not generate enough turnover by the end of the first year, which does provides a bit of a safety net.

As you point out, it does not involve a great amount of hours, and should give a measure of interest during my retirement years, and still leave plenty of spare time for other pursuits.

 

Thanks again for the information.

 

Best Regards,

 

Big Bee

 

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