How to sell a vending machine business in Canada

An owner who has decided to sell a vending route is selling more than machines. A buyer is taking on the rules that attach to them: food-safety permits or notices, limits on what certain machines may dispense, and sales-tax treatment of coin and cash receipts. Getting those documents together before you list means you can answer a buyer’s questions about them. The rules differ by province, and this guide uses Ontario, Alberta and Quebec as examples; other provinces run their own regimes. For the overall sequence of a sale, see how to sell a business in Canada.

Work out what a permit can and cannot hand over

In Alberta, the Food Regulation says that, subject to section 7(3), a permit is not transferable. It also says the regulation does not apply to food handling for the purpose of operating a vending machine that dispenses pre-packaged food, or food supplied by a commissary or depot that warehouses food for vending machines and which is identified on a food handling permit, unless the regional health authority is of the opinion that the exemption would or is likely to create a nuisance. If your route depends on a commissary or depot permit, find out before you list how a buyer’s machines would be covered. Ask the health authority, and write down the answer to give the buyer.

In Ontario, a new operator may need to give notice

Ontario’s Health Protection and Promotion Act says every person who intends to commence to operate a food premise must give notice of that intention to the medical officer of health of the health unit in which the premise will be located. A food premise includes a premises where food is sold or offered for sale. Whether your machines count is for the local health unit to say, but a buyer who becomes the operator may need to give that notice. Keep a copy of your own notice and tell the buyer which health unit you dealt with.

Check the machines themselves

Ontario’s food premises regulation says the name and telephone number of the operator must be prominently displayed on or near a vending machine if an employee of the operator is not in full-time attendance. After a sale, that information will be out of date, so plan who changes the labels and when. The regulation also requires a potable water supply piped in under pressure for a vending machine in a food premise that automatically mixes water to create a product. Check both on every machine and fix any gaps before you list.

Deal with tobacco and vapour machines

Ontario’s Smoke-Free Ontario Act, 2017 says no owner or occupier of a place shall have a vending machine for selling or dispensing tobacco products, vapour products or a prescribed product or substance in any part of the place, with exceptions that include a machine only operable by a retailer or an employee of a retailer. Alberta’s Tobacco, Smoking and Vaping Reduction Act (s. 7.3(f)) says no person shall sell tobacco products or vaping products, or offer them for sale, from a vending machine. If any machine on your route dispenses these, remove it or document why it complies before you list.

Gather what you can show for each location

List what arrangement, if any, you have with the owner of each site where a machine sits. If you have placement agreements with site owners, collect them for each site and read them for any clause that requires the site owner’s consent to an assignment or a change of operator. If a consent is needed, ask the buyer whether they want it in hand before closing, and plan when to request it. Also list which machines you own outright and which are financed or leased, and what the supplier or financing documents say about a sale. Put together a schedule of machines, locations and agreements that a buyer can check against the route.

Organize the GST/HST and cash records

The Canada Revenue Agency says you are considered to have collected the GST/HST when you remove the money from the vending or coin-operated machine, and that goods sold through such machines are generally subject to GST/HST. It also says the GST/HST is equal to zero on a supply made through a coin-operated machine designed to accept only a single coin of a stated amount or less as the total payable. Pull your returns, your collection logs and a note of which machines fall under which treatment. If your route sells meat products in Quebec, add the supplier paperwork showing where they were prepared and packed, because section 3.4.10 of Quebec’s Regulation respecting food requires them to have been prepared and packed in a plant operated in conformity with that regulation and serving only for that purpose. Interested buyers can find your type of business among the vending businesses for sale.

• Ask the health authority which permit or notice covers your machines and whether it can pass to a buyer.
• Keep your own notice or permit paperwork ready to show.
• Remove or document any tobacco or vapour machine before listing.
• Assemble GST/HST returns and cash-collection logs by machine.
• Plan who updates operator name and telephone labels after closing.