Don’t Get Stuck in a Rollover Vending Contract

There’s a lot to be said about the vending business, especially when it comes to the sheer amount of equipment required to get people the food and beverages that they’re looking for. Dealing with single serve coffee and different food items, as well as vending machines in Tucson used in conjunction with the sale of coffee and other consumables, can be a troublesome area for many vendees because the equipment is actually in use through a type of lease, rather than being purchased for use outright and the food is being provided through a narrow distribution channel.

This is the case for many items within a vending contract, including vending machines themselves, which comprise much of a vendor’s assets in terms of doing business. What this means is that all of a vendee’s business revolves around their standing contract with an equipment and product provider.

So how does this lease/contract work? Well, it’s actually quite simple overall, however there’s a devil in the details… but we’ll get to that in a minute. The lease works as so:

1. A vendee approaches a vending company and requests the use of certain equipment—a vending machine in Tucson, for example. Rather than pay thousands of dollars to buy a machine outright, vendees lease machines freely through vending companies in order to save the cost of this expense.
2. Use of the equipment is granted by the vendor and a partnership is formed through a legally binding contract. Contracts are usually one to two years in length and will outline the services provided by the vendor, such as servicing and filling of the leased machines.
3. A vendee sells products to consumers via the leased vending machines and is paid commission from the gross sales of the products sold.

So what’s so bad about that? How could there possibly be a devil in the details? Well, it may seem like a great idea, but there are actually things called “rollover clauses” buried deep within these contracts. Essentially, these portions of the contract entail that if a vendee breaks his or her contract early, they owe a sum of money to the vendor. But, on the same token, the rollover portion of the contract automatically renews a contract well before it’s due, ensnaring a vendee over and over again so that they’re continually tied to vending machines in Tucson.

Never fear, however—there is an answer to breaking free from the vicious cycle of rollover contracts! Before the rollover takes place, a vendee can send a certified letter to his or her partnered vendor, stating that they would like to cancel their service agreement before a rollover takes place. Once this is done, it eliminates the need to wait for the usual 30-day renewal period that comes and goes, trapping vendees once again in a rollover contract.

If you’re a vendee who’s using products or equipment from a vendor and you’re under contract, be sure to read your agreement thoroughly to ensure that you’re not in some sort of rollover program. If you find fine print that does indeed lump you in with a rollover contract, be sure to remember when your renewal date is and prepare to send your certified letter well before that date if you plan on leaving your contract to pursue other vending opportunities.

Categorised in: Vending Services