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🍫 Running a Vending Machine Business? Make Sure Your Contract Has This!

🍫 Running a Vending Machine Business? Make Sure Your Contract Has This!

3 must-have location contract terms 📑

March 01, 2025

Hey there, Vendpreneur!

Welcome to Becoming a Vendpreneur—where every week I help you navigate the challenges of running a vending machine business, whether you’re just starting out or looking to expand your operation.

This week, we’re talking about location contracts. Here are 3 things every vending operator needs to include:

Location Agreement and Exclusivity
Payment and Commission Terms
Contract Length and Termination Conditions

But before we jump into more details, I want to share a few quick updates on my two vending businesses, Pod Plug and Vending Machine LaunchPad (VMLP):

🚀 Business Updates

📑 Had a great convo with our franchise attorney. Just need to finalize the Ops Manual table of contents to move forward!
📸 Met with Brand Juice, a Fort Worth-based digital marketing agency, about handling our brand shoot.
🤝 Attended the TRIBE founder meetup in downtown LA—networked with some incredibly talented entrepreneurs.
🚀 Officially onboarded two new interns to the team! Also welcomed my first-ever long-form video editor for YouTube.
📈 Spent the day at the office deep-diving into all things digital marketing with Pod Plug’s senior marketer, Pat—covered newsletters, lead magnets, SEO, UGC, and more. Tons of valuable takeaways!
🎥 Recorded my first-ever video sales letter (VSL). These convert really well, and we’re definitely adding one to the franchise site.
💼 Connected with a strong inbound lead from LinkedIn with solid sales & biz dev experience. I’m meeting him up for coffee in San Diego this weekend.
📝 Huge insight from a B2B cold email legend, Jack. I’m seriously considering leveraging cold email for booking franchisee calls!
🏆 Wrapped up our Barstool franchise presentation. Big shoutout to my team for crushing it! Really think Barstool liked what they saw.

Feeling pumped about all the momentum. More updates coming soon!

Now, let’s dive into this week’s newsletter. 👇

🔗 Best Links

Curated picks for Vendpreneurs

📱 Top Reads

🍕 College students LOVE pizza. Pizzaforno is already cashing in by placing their machines on college campuses. (Castanet)
This bakery found a genius way to sell cakes 🎂 through vending machines. If you bake, you NEED to read this. (Retail Customer Experience)

😱 Trending Now

💧 $0.01 for ice-cold water? A vending machine dispenses cold water in plastic bags for a single cent. Would this work in your city? (Facebook)
This interactive vending machine stops people in their tracks. Could this be the future? (TikTok)

If your vending machine is sitting in a location without a proper contract, guess what?

That machine doesn’t belong to you anymore… at least, not in the eyes of the location. They can remove it, replace it, or even take your profits.

And there’s nothing you can do.

If you want to avoid this nightmare, lock in these three contract terms👇

1. Location Agreement & Exclusivity 📍

The reason my vending business makes money is simple: exclusivity. Without it, my machines wouldn’t be nearly as profitable.

Here’s why every location contract needs it:

• Clear Machine Placement – A contract that defines exactly where your machine will be placed prevents unexpected relocations.

• Exclusivity Clause – This stops the location from allowing another vending machine that competes with yours. If a new vending operator moves in, your sales could drop fast.

• Stronger Business Value – A vending route with exclusive rights is more attractive to buyers. If you ever decide to sell, a contract with exclusivity means they won’t have to worry about sudden competition.

Do you have an exclusivity clause in your contracts?

2. Payment & Commission Terms 💵

Money talks, so your contract needs to be crystal clear about payments.

Here’s what to include:

• Commission Breakdown – Spell out exactly how much the location will receive and when they’ll get paid.

• Define “Net Receipts” – Make sure it’s clear what’s deducted before commission is calculated (like taxes and card processing fees). This avoids any misunderstandings later.

• Payment Details – List how payments will be sent (cash, check, direct deposit) and where they should go.

PS. Some vending operators swear by commissions… I don’t offer them at all. Here’s why 👀👇 (Let me know if you agree or think I’m wrong!)

The #1 question I get about the vending business:
"How much in commissions do you pay the location?"
Since vending machines are considered a free amenity, I never offer commission.
The whole point is to offer a convenient service for the location’s staff & customers without… x.com/i/web/status/1…
— Ethan Kohan 🍫 (@ethan_kohan)
3:26 PM • Jan 8, 2025

3. Contract Length & Termination Conditions 📆

A vending contract isn’t just about getting in, it's about staying secure.

Here’s what your contract should cover:

• Clear Contract Term – Set a specific length (e.g., 5 years). This keeps your location locked in for the long run.

• Termination Conditions – Define how and when the contract can end. A 30-day notice period is common, so you have time to plan.

• Exit Terms – If the contract is canceled, who removes the machine? Who covers damages? Spell it out so there are no last-minute headaches.

PS. Want a contract template that covers everything we talked about? Click the button below to grab a copy!

And That’s a Wrap!

Remember to always get everything in writing to avoid future disputes.

Thanks for reading this week’s newsletter.

Hit reply and let me know what you found most helpful this week—I read every single reply and I’d love to hear from you!

See you next Saturday!

-Ethan

Season 1 Window Closing GIF by Law & Order

Gif by nbclawandorder on Giphy

Before you go, here are 3 ways I can help you get started in vending:

1.) Pod Plug Franchise - With a super low-cost entry franchise, you’ll get three smart machines, starting inventory, and hands-on training. Join the waitlist!

2.) Vending Machine LaunchPad - Learn exactly how to start and grow your vending business step-by-step and get direct access to me with 3 live calls per week, downloadable resources, templates, and a lot more.

3.) Nayax - Add cashless payments to your machines with Nayax card readers. Use my promo code “ETHANPROMO” for a nice little discount.