How to Run a Bread Route Business

Bread route businesses are very popular in the independent route/distribution industry.  Independent bread route opportunities are typically maintained by one individual who sells and delivers bread products for a particular bakery or manufacturer.  The owner of the route purchases an exclusive distribution territory for products distributed by that company.  For example, if you own a Bimbo bread route you may deliver products that fall under another brand but are being distributed by Bimbo.  Bimbo agrees that they will not allow any other distributor to deliver products inside of your territory.

Requirements and Expectations

Running a bread route business does require you to manage a small business.  You are considered an independent operator and are essentially reselling the bread products to your stores.  The bread company will handle collections and issue payments to you based on the commission, but you will cover all of your own expenses.  Prior route experience is typically not required if you can show the following traits and skills:

• Professional attitude and motivation to increase sales
• Willingness to work with your accounts, especially during sales and holiday seasons
• Understanding that the route should be treated like a business
• Ability to work as a team with your district, regional manager and your store managers

Day to Day Operation

Bread routes do require early morning hours and are somewhat seasonal in nature.  As with most distribution routes, deliveries need to be made during grocery store receiving hours.  Receiving hours fluctuate from location to location but are typically between 3am and 2pm.  A common bread route schedule might be 5am to 1pm with Wednesday and Sunday off.  The route owner starts their day by visiting a local warehouse facility and loading their order onto the truck.  Orders are usually placed one week ahead of time and are relatively consistent besides sale items or seasonal increases.  The owner then drives to each account, checks in their delivery, pulls out stale product, fills the shelf while rotating older bread to the front, and checks/fills displays as necessary.  Some accounts may need service 5+ days per week while others need service less often.  The schedule may change based on the time of year and what promotions are in effect that week.  For example, bread route owners are very busy with hamburger and hot dog buns during the summer months and holidays like Memorial Day or Independence Day.  Many route owners such as Pepperidge Farm and Arnold/Brownberry are extremely busy around Thanksgiving due to their stuffing product sales.  If a route has very busy accounts or during holiday/seasonal surges, it may be necessary to hire a merchandiser or pull up/back stock worker that will go to your accounts and refill the shelves.

Account and Territory Growth

Major grocery store accounts (Wal-Mart, Target, Kroeger, Albertons, etc) are protected accounts that require service.  These stores typically make up the largest portion of sales on the route.  They have agreements in place with the bread companies and will be guaranteed on your route.  Bread routes typically have anywhere from 3 to 15 stores in each territory.  Smaller independent grocery stores, convenience stores, restaurants, schools and other accounts are typically serviced at the discretion of the route owner.  These are the types of accounts that a bread route owner could add to increase the sales volume of their route.  It is important to remember that the resale value of a route is calculated by using the average weekly sales number.  By increasing weekly sales you are increasing both your upcoming paycheck plus the resale value and equity in the route.

Buying or Selling a Bread Route

Bread routes are offered by a wide variety of companies including Pepperidge Farm, Arnold/Bimbo/Brownberry, Sara Lee, Martin’s, Thomas’, etc.  Most of these companies have similar setups and the route sales process is no different.  Bread companies typically offer route financing.  As a buyer you will need to have anywhere from 10-20% for a down payment on the route.  The remainder can be financed through the companies banking partners.

Route values are calculated by using a simple multiplier system.  Each company and market utilize a different multiplier and the weekly sales average of a route to determine it’s value.  For example, a Pepperidge Farm bread route in the Chicago area may use a multiplier of 18.  If the route is averaging $7,500 per week in sales then the asking price would be $135,000 ($7,500 x 18).  Pepperidge Farm bread routes require a 15% down payment so the buyer would need to have $20,250 at the closing.  Of course the buyer is also subject to credit review and an interview process which can effect their approval.  It is important to remember that the multipliers vary from company to company and city to city…the same route in New York City might be using a 25x multiplier.  It is based entirely on market trends and historical sales numbers in that area.

The Route Exchange

If you are interested in buying or selling a bread route business and have any questions please feel free to contact us at any time.  We have no upfront fess and are truly experts in the route sales industry.  We have operated bread routes in the past so we are familiar with the day to day requirements as well.  Our service was established to make the route buying and selling process easier.  We qualify all of our leads from both a business and financial stand point.  We will save you the headaches and wasted time associated with both buying/selling routes and make sure the process gets done quickly and efficiently.

Be Successful in the Vending Business

Many individuals find themselves interested in starting or purchasing a vending route business.  Vending routes do provide extremely flexible schedules and are relatively autonomous which offers great opportunities to the route owners.  Some people get into the business just to have a secondary stream of income…running their routes and servicing their machines primarily on weekends or after normal work hours.  At the same time there are many owners that have made vending their full-time occupation.  I have spoken with owners who work traditional Monday-Friday schedules and net over $100,000 per year running their vending route.

Starting a Vending Route Business

When starting out there are really two options…buy an existing route or start one from scratch.  If you are going to build your own route you would need to start out by finding locations that need vending service.  Examples of great vending locations are below…

• Any business with heavy foot traffic or services that require the customer to wait.  For example, vehicle maintenance businesses are great for vending sales
• Hotels
• Schools
• Community centers or other recreational buildings
• Apartment buildings
• Large office buildings

Finding these locations can take some effort but is also relatively low or no cost.  I would recommend getting some business cards printed (you can get really cheap business cards or flyers at VistaPrint) and just stopping by locations that you are interested in.  Of course you will want to dress and act professionally.  Ask to speak with a manager or supervisor and simply explain that you provide vending services in the area and wondered if they have any vending needs.  You can offer drink machines, snack machines, coffee service, etc.  With enough effort you will find some accounts that either don’t have vending service at all or possibly some that are frustrated with their current provider.  You could do some of the location search by phone or email, but you won’t have nearly as much success.  It is much more difficult to say “No” to someone’s face than it is over the phone or email.

Build your route as big as you want it.  If you are just trying to generate some extra money and only want to spend a few hours a week on the business then you may only want 3-5 locations.  If you want to generate enough income to do vending as a full-time job then you will probably need to add machines continuously.  Most full time routes are going to have 25+ locations.  It might be easiest to buy an existing route and add on to it if you are truly interested in making significant money in the vending business.  If you are in the bulk candy vending business then you may need more locations than that…remember you are only selling $0.25 or $0.50 of candy at a time instead of $1-2 per item for drink and snack routes.

Managing the Vending Route

There’s really nothing complicated about maintaining a vending route.  The two primary responsibilities are to keep the machines stocked with product and to keep the machines clean.

Each location is going to sell certain products better than others.  The route owner would benefit from keeping track of which products sell fastest and how often they need to be refilled.  New machines often have inventory tracking software but the older ones and bulk machines do not.  Some machines may need to be refilled multiple times per week while others may only need to be serviced twice per month.  Simply keeping track of your sales and service history will make the management of the route much easier.  It will also be a huge benefit if you ever attempt to sell the business.  Financial records and machine information are key to the resale value of a vending route.

As far as cleaning and maintaining the machines, a good owner will have Windex or other cleaning supplies to wipe down the glass on their machine each time they service it.  No one wants to buy food from a machine that has finger prints, dirt and other unappealing stains on it.  You can also carry Lysol wipes to clean off the buttons and any other area that buyers will touch.  The people who work at the location may notice your attention to detail and be more motivated to support your business as well.  In terms of actual machine/equipment maintenance…a lot of the common vending machine repairs have tutorial videos on YouTube.  There can be some more complicated issues, for example issues with electrical components, and in those situations you can usually find a local vending machine repair service.  If a machine needs service you can either replace it with another one or make it clear that the machine is awaiting repair…don’t just leave the machine turned off and inoperable.  At the very least put a sign on the machine to apologize for the inconvenience and let people know that someone is scheduled to fix it as soon as possible.

Selling a Vending Route

As described above, vending routes can vary in a number of ways and selling a vending route can be difficult.  Typically banks and other lenders are not going to approve a loan to someone interested in buying a vending business.  There are a number of reasons for this but the lack of collateral and high cash sales volume are the most obvious.  The easiest way to market and sell your vending route is by keeping detailed sales reports, account lists, equipment information, etc.  We have sold a large number of vending routes and these items are the most crucial for a successful sale.  If you can show a legitimate history for the business you will have a much better shot at finding a qualified buyer.

If you are a current vending route owner that is interested in an appraisal or interested in listing your route for sale, please feel free to contact us.  We work with both route sellers and route buyers every day so we have a good idea of what routes are worth.  There are no costs to list with us and we are only compensated if one of our leads purchases your route.  You can find more information on the service we provide at our Route Seller page.