The venue makes most of a coffee robot's sales. Yet it is the location agreement signed with the owner or manager of that venue that decides how much of it you keep. Fee, term, exclusivity, electricity, exit conditions: every clause weighs on profitability, sometimes as much as the number of people walking by. Here are the points to read and negotiate before signing.
Why the agreement matters as much as the venue
A coffee robot sells on its own, with no staff behind a counter. Its costs are therefore few and easy to identify: ingredients and cups, upkeep, electricity, and the sum paid to the venue that hosts it.
Of all these items, the fee is often the only one that is really negotiable, and it is negotiated at signing. Once the agreement is signed, it comes back every month for its whole term.
An excellent location with too heavy a fee can therefore earn less than a more modest venue with balanced terms. Before comparing two venues, compare two agreements. To judge the venue itself (footfall, visibility, audience habits), our article on choosing the location details the criteria to look at.
Fixed fee or share of sales
There are two main formulas, which can also be combined.
- The fixed fee: a monthly amount, whatever the sales. You know in advance what you will pay, and everything you sell on top is yours. On the other hand, you pay the same amount during a slow month, holidays, works or partial closure.
- The commission on sales: a percentage of what the machine sells. The venue shares the risk with you: a quiet month costs you less. But the more you sell, the more you pay over, and the margin on each drink drops accordingly.
- The mixed formula: a small fixed amount plus a commission, or a commission with a minimum guaranteed to the venue.
The choice depends mostly on what you know about the footfall. In a new venue or one whose attendance is uncertain, a commission limits your risk. In a venue with known, steady footfall, a reasonable fixed fee leaves you more margin when sales follow.
With a commission, have it specified what it is calculated on: revenue excluding or including VAT, before or after refunds for failed drinks. Over several years, the difference counts.
To measure the effect of each formula on your result, use the method in our article on calculating the margin and the return on investment. Do the calculation once per assumption, changing only the fee line. Up-to-date prices and margin scenarios are on the investment page.
Term and renewal
Buying a coffee robot means committing a sum that is recovered over time. An agreement that is too short, or that the venue can terminate at any moment, exposes you to having to move the machine before you have recovered your outlay.
The points to check:
- an initial term consistent with your estimate of the return on investment;
- renewal: automatic or to be renegotiated, and under what conditions the fee can change at that point;
- the notice period for termination, on both sides, long enough to let you find another venue;
- the cases in which the venue can end the agreement early: works, refurbishment, change of owner or manager.
Exclusivity, a clause that protects the margin
Imagine that a few months after you, the venue installs another coffee machine a few metres from yours. Your sales are split, but your fee does not go down.
An exclusivity clause reserves the sale of self-service hot drinks in the venue, or in a well-defined area, to the coffee robot. It is not always granted, especially in a shopping centre where cafés are already established, but it is worth asking for. Without exclusivity, ask at least for a lower fee or the right to leave if a competing offer arrives.
Electricity, access and space: who pays for what
These practical details seem trivial at signing. Yet they are what create disagreements later.
- Electricity: a sub-meter invoiced separately, a monthly flat rate, or electricity included in the fee. Also check that a suitable socket exists at the planned spot, or who will pay for installing it. The machine's requirements are given on the coffee robot page.
- Access: the hours when you can come to restock and clean the machine, badge or key, space for unloading.
- The exact spot: a plan attached to the agreement prevents the machine from being moved one day to a less busy corner.
- Opening hours: the machine only sells when the venue is open. Reduced hours on Sundays or in summer show up directly in sales.
Insurance, liability and condition report
The agreement must say who insures what: the machine against theft, vandalism or water damage, and liability in the event of an incident with a customer. Make a dated condition report, with photos, at installation, then another one when you leave.
Our article on the steps to check before investing recalls the other obligations that apply to running the machine in France (hygiene, price display, insurance).
The exit conditions
They are rarely considered at signing, but they are what protects your investment if things go wrong.
- The time you have to remove the machine, and who pays for dismantling and making good.
- What happens if the venue closes for good or changes activity.
- The possibility of transferring the agreement if you resell the machine on site. A machine sold together with its location and an agreement that follows it finds a buyer more easily.
Preparing the negotiation
An owner or manager negotiates better with someone who is prepared. Before the meeting:
- Make a cautious estimate of the venue's sales, and calculate how high the fee can go before the machine stops being profitable.
- Highlight what the machine brings to the venue: an extra service for its customers or employees, with no staff to manage and no work on its part.
- Arrive with a clear proposal (formula, term, exclusivity) rather than waiting for theirs.
- Have the agreement reviewed by a lawyer or your accountant before signing, especially the term and the termination cases.
A coffee robot's profitability depends on the location and the choice of products, but also on these few pages signed with the venue. Well negotiated, they leave the machine all the margin it can make. If you have a venue in mind and would like to discuss it, feel free to contact us.
