RELATIONS WITH THE MANAGEMENT FIRM HAD BEEN FINE
Joe and Becky Palazzola described their relationship with Best Vendors as “wonderful” prior to the Compass Group’s acquisition. Even after the acquisition, there was never a problem.
“Best Vendors never had to call us to say this store is not happy, or you need to do this,” Becky Palazzola said.
“It was fine.”
Joe Palazzola said they had even complied with Best Vendors’ request to equip all machines with DEX reporting capability. “We did all of that,” he said.
“It’s not about quality,” Joe Palazzola said. “What a sad thing for our industry when you get punished for setting the standards too high.”
Another operator who did not want to be identified told a similar story. This operator said he actually paid the 2 percent fee to Best Vendors, only to be almost immediately asked to give his Best Vendors accounts to a local Canteen branch. This vendor said his Best Vendors rep actually told him that his service had been good, but Canteen needed the business.
“As soon as they got that check deposited, they threw me out of their locations,” he said. “It was not a service issue at all, but Canteen here had lost some business.”
Tony McDonald, president and CEO of Best Vendors Inc., said there has been no move to totally replace independent operator partners with Canteen. “We’re not going to do that; we haven’t done that,” he said.
BEST ACQUISITION INFLUENCED ONE DECISION TO JOIN CANTEEN
One operator said he was persuaded to join Canteen’s franchise program as a result of the Best Vendors acquisition. The operator had a lot of Best Vendors managed accounts, and he felt that becoming a Canteen franchisee would help secure this business. He said he was considering becoming a Canteen franchise before the acquisition, but when the acquisition occurred, that sealed his decision.
This operator did not wish to be named for fear of jeopardizing his relations with other management companies.
Vending operators noted that some management companies are better to work with than others.
Some feel that many of the management companies are beginning to burden them with installing new technology. Competition among management companies is fueling this, many operators claim.
“There is a lot of competition among them,” said Todd Elliott, vice president of Tomdra Vending Inc. in Tucson, Ariz. As a result, Elliott said there are more demands being placed on vending operators to deliver on the promises management companies make to customers. “It just pushes the commission up or the cost of the investment in the account,” he said. “It’s a tough scenario.”
MANAGEMENT COMPANIES PROMOTE NEW TECHNOLOGY
Elliott said some management companies are requiring an investment in remote machine monitoring. In those cases, the management company provides the remote monitoring devices, but they deduct the cost of it from his rebate. “It wasn’t (immediately) out of pocket,” Elliott said. “They bought the equipment, but we ended up paying for it.”
In the last two years, VendingMarketWatch.com reported on several vending management companies investing in remote monitoring equipment. The companies were uncertain as to who would eventually foot the bill for this.
“The competition between the management companies is costing the operator,” said a technology provider who did not want to be identified. “They just keep slamming it to the operator.”
Several operators interviewed noted that certain management companies have announced new technology requirements for certain customers, but for the most part, they have not enforced these directives. One reason is that management companies do not have the clout to enforce such mandates in all their locations since their operator partners are oftentimes limited, especially in rural markets.
“They are promising these big clients stuff that they can’t deliver,” said the owner of a large regional company who did not want to be named. “The vendor certainly doesn’t win.”