Beginner’s Guide on Starting a Vending Machine Franchise Business in the United Kingdom

Starting a Vending Machine Franchise Business in the United KingdomIn today’s fast and modern world, vending machines have become a part of people’s lives very much. So if you want to invest in a flexible, easy-to-scale, and highly profitable venture, starting a vending machine franchise business is a favorable option. It’s not a very costly business to start and takes little effort to manage, too. If you’re planning to start a vending machine business, then this guide is perfect for you.

This article explains the industry practices, business registration, licenses, and permits for starting a vending machine franchise business in the United Kingdom. With these pieces of information, you’ll learn what to expect and how to properly set up vending machines in areas near you. And with this guide to company registration in United Kingdom, you’ll be better equipped on how to correctly and legally start the business with complete compliance.


What is a Vending Machine Business?

Vending machines are the convenient go-to of consumers for snacks and energy-boosting refreshments. These machines are typically coin-operated, but new models already allow for cash and even card payments. Vending machines now also offer a large variety of goods and even services, from crisps to jewelry, and even car wash vending. Starting entrepreneurs would invest in these machines and place them in private businesses or public areas where people who need them most can access them.

The most common vending machines people commonly see in public places are food and beverage vending. But you may also choose to invest in vending machines that dispense goods in bulk and specialty items like laundry products, hot beverages, tobacco, and travel essentials. Another option venturers can take is to acquire a vending machine franchise that allows for a more convenient startup. Buying a franchise is more secure and comes with support and training but has franchise fees as its downside.

Starting a vending machine franchise business is an attractive investment for both starting and experienced entrepreneurs. It can be a principal source of income or a side hustle. One can already start this business with low capital, which is rewarding because it’s an attractive and profitable venture. It has very minimal overhead costs, too, since you won’t be renting an office or employing many people to run the operations.

Business owners place different types of machines in one location. And others place one kind in different locations, based on the demographics and demand. You have lots of options as to where to put these machines, from schools to bus stations, commercial areas, offices, hospitals, and the like. It’s also a very flexible business, as you can check up on it every two days or weekly to stock up and collect the money.


How to Start a Vending Machine Franchise Business

Find a Location

Location is crucial in vending machine franchise businesses. Some location ideas you can choose are medical centers, hospitals, airports, shopping malls, laundromats, apartment complexes, and manufacturing plants. In choosing locations, be sure that it has enough customer traffic and good publicity. Once you already have an ideal location, get in touch with property owners or proprietors. You have to secure the space and negotiate with them to allow your vending machine in their spaces.

Acquire Vending Machines

If you acquired a franchise, you wouldn’t have a problem with where to purchase your vending machines. However, if you plan on starting from scratch or starting your own franchise, you can source from companies that develop and supply vending machines to businesses. When choosing a vendor, make sure that they are creditable, have good satisfaction ratings, and are appropriately accredited. You can look for vending machines on online platforms like Craigslist and eBay or directly contact a manufacturer.

Find a Supplier

Keeping your vending machines well-stocked is critical in keeping revenues flowing and ensuring that customers can depend on your machines when they need them. Looking for vending machine suppliers is similar to that of a retailer. Look for wholesalers or contact companies themselves to work a supply contract with them. Study your market, too, to see if they have particular preferences. Don’t overstock at the beginning, but slowly build it up depending on the demand.

Customer Service

Even if there’s minimal interaction between the owner and the customers, you still have to provide customer service when needed. The most common circumstance you may face is customer complaints. You need to have the plan to address them as soon as possible. Some vending equipment comes with pre-programmed management software that streamlines inventory keeping, revenue tracking, and other features. Investing in this system may also help improve your customer satisfaction and leads generation.


Registering a Vending Machine Business

Like any other business, Vending machine operators must report their taxable sales and remit sales tax on their collections. As it is, vending machine franchise businesses must register their business so that the state and local authorities will recognize the entity. To do this, you may either register as a sole proprietor, partnership, or limited company.

To register as a sole proprietorship and partnership, you just have to complete the HMRC form for self-assessment. What this means is that you will report your income in a Self-Assessment tax return. For partnerships, the partners have to agree on who should be the nominated partner who will be responsible for the business’s accounts and tax compliance. The nominated partner will then register the business in HMRC.

To register as a limited company, you have to register with both the Companies House and HMRC. Moreover, the process is now more convenient as you can already simultaneously register for both one platform and transaction. What you’ll need is your company name, address, company director details, shareholder details, and articles of association. Your shareholders also have to sign the memorandum of association where they prove their consent in setting up the company.

Company registration is practically straightforward, especially if your documents and details are ready. It takes less than an hour to furnish the forms, pay £12, and the system will then process your registration within 24 hours. However, if you think you need assistance in completing the process, you can also avail yourself of the company formation services of a corporate service provider in the United Kingdom.


Licenses, Permits, and Other Legalities

Starting a vending machine franchise business in the United Kingdom generally does not require a license. Depending on what type of vending machines you plan to put up, you can inquire with your nearest local authority regarding the permits you may need to acquire to operate. Some localities may require a street vending license or other permits to open a vending machine in public areas.

What you also have to ensure, as a business owner, is to adhere to the various legislations covering this type of business. For example, if you are vending consumable goods like snacks, you have to follow the Food Safety Act and General Food Law. These legislations provide guidelines ensuring proper labeling, storage, and hygiene of the products. Especially in food and beverage products, you want to make sure that they are always safe for consumption or face liabilities for food poisoning or other health risks.

Moreover, if you decide to place your vending machines in private establishments or commercial spaces, you’ll be paying a commission to the property owner. Typically, vending machine owners would pay for 10-25% percentage of the machine earnings for the location and electricity. To secure the fair terms of this deal, draw up a contract with the property owner. The contract should state the agreed compensation rate, length of the agreement, and other particular terms.

To be sure of the acceptable terms to include in the negotiations and contract, look up consumer contracts regulations. Some provisions that may apply to this type of business are your cancellation rights and information requirements. Other regulations you may need to include consumer rights and the Supply of Goods and Services Act.


Start a Vending Machine Business with United Kingdom Corporate Services

Experience a no-stress company startup with the United Kingdom company incorporation services you can trust. 3E Accounting United Kingdom has been assisting small and medium businesses in starting right to achieve their business goals. With fast and reliable company formation packages, you can focus more on planning and managing your startup activities.

Starting a Vending Machine Franchise Business in the United Kingdom

What’s more, you also get to ask your questions and concerns to the experts themselves. So, what are you waiting for? Grab your phone and contact 3E Accounting to get in touch with our expert agents today!