Vending placement agreement terms, explained
A placement agreement should be short and readable. If it is not, that is itself informative. Here is what each clause typically does and where to push back.
Term and renewal
Look for an initial term of one to three years. What matters far more than the length is the renewal language. Automatic renewal with a narrow cancellation window is the clause that traps people, so ask for month-to-month renewal or a 60-day notice window instead of a 30-day window buried at the anniversary date.
Exclusivity
Many agreements grant the operator exclusive rights to vend food and beverage on the property. That is often reasonable, but define the scope. Exclusivity over vending machines is normal. Exclusivity that also blocks a future cafe, micro market, or catered service is not, and you should narrow it.
Removal and termination
You want a clear right to require removal with written notice, and a defined window for the operator to actually remove the equipment. Also look for a service-failure clause: if a machine sits empty or broken beyond a set number of days, you should be able to terminate without penalty.
Liability, insurance, and damage
The machine is the operator's property and their insurance should cover it. Confirm the operator carries general liability and ask to be named as an additional insured, which is a normal and inexpensive request. Push back on any clause that makes you responsible for theft or vandalism of their equipment.
Commission and reporting
If commission applies, the agreement should state the percentage, whether it is on gross or net, the payment frequency, and your right to a sales report. Without the reporting right, the percentage is unverifiable.
Related questions
- How long is a typical placement agreement?
- One to three years initially, with renewal terms that matter more than the initial length.
- Should I accept exclusivity?
- For vending machines specifically, usually yes. For all food and beverage service on the property, narrow it.
- Can I be named as additional insured?
- Yes, and it is a standard request that a professional operator will accommodate.
Keep reading
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