Top 20 Route FAQLooking for answers? Explore our top frequently asked questions and feel free to contact us with any additional questions. We’re happy to guarantee speedy results and, as always, a free consultation!
1. What is a route?
A route is a collection of stops to pick up and deliver a specific product - including supermarkets, delis, grocery stores, diners, restaurants, schools, nursing homes and even factories and office buildings. Route owners usually receive payment for the delivered product, either by C.O.D. or on a weekly basis.
2. What are the different types of routes?
You can purchase many different types of routes - including bread, meat and provisions, beverage, cookie, cake, snack, coffee catering, dairy, vending, newspaper, ice cream, FedEx and even office cleaning supply routes. You can choose between name brand routes (Boar’s Head, for example) or “independent” (non-name brand) routes.
3. What is a “protected” route?
There are different ways to secure a “protected” route. You can protect a route “by area” (with specific boundaries), to prevent other route owners from delivering in your geographic area. You can also protect a route “by stops”, to protect your accounts when you buy the route or add while you own a route, but with no specific boundaries. The “Distributor’s Agreement” in the contract covers all the details of a protected route.
4. What is the difference between a protected route and an independent route?
Independent routes can pick up from more than one supplier, and sometimes as many as four or five. This guarantees the best prices and a diversified product line. The different types of independent routes include bread, cake, meat, provisions, dairy, vending and service routes. Independent routes generally offer a higher net for a lower price. Protected routes such as Snapple, Wise, Pepsi and FedEx, are usually household names with geographic territorial boundaries.
5. Which type of route is the better buy?
A well established independent route with good solid accounts has a lot to offer buyers looking for a high net. Independent routes also require less money than name brand routes. A protected route, on the other hand, offers a secure base, a known distributor and the benefit of carrying a recognizable name brand. You may want to further investigate both types of routes to choose the best one for your needs.
6. What is net?
The industry standard of net is the money remaining at the end of the week, after the buyer pays for the product, gas, maintenance and insurance at the minimum. Other expenses may include helpers, truck payments, parking fees, tolls, warehouse fees, cell phone bills, computers and invoices if needed. Expenses never include taxes, notes to the seller, medical benefits or your own salary.
7. How much does a route cost?
Route prices vary based on net, type, vehicle, area and days/hours per week. The general rule of 2x the yearly net (double net) still holds true for many routes, including some independent routes. Name brand routes start at 2x and can go for 2 ½ - 3x the net, or even as high as 4x net (Pepsi, Boar’s Head, Snapple and Pepperidge Farm Cookie, for example). Most route owners who are willing to hold a note want at least 50-70% down.
8. How can I finance a route?
a) You can finance the down payment on a route with either a personal loan, second mortgage or home equity loan. Personal loans are usually limited to $10,000 - $20,000 (with good credit). The Small Business Administration (SBA) and banks are not in a position to take back a route in the case of a default, and therefore do not usually give business loans on routes.
If you do opt to get money from your home, we recommend buying the route outright, as opposed to paying off that loan, plus a loan to the seller. This way, you can get financing over 10-20 years with a lower interest rate than the average among sellers.
b) The seller of the route usually holds the balance remaining after the down payment, which is personally guaranteed by the buyer. The length of time and the amount of interest on the note varies according to market conditions, although most sellers currently require 6-8% interest. You can make monthly payments, and the amount of the monthly note is usually equivalent to about one week’s net.
9. What is the advantage of purchasing a route from Mr. Route?
It’s likely this is your first venture into the route business. By working with Mr. Route's brokers, you can expect to be well informed and benefit from our wealth of experience and knowledge. We will show you how to price a route, verify its weekly net, and give you an overall understanding of a specific route or routes in general.
Mr. Route will only handle a route we feel is a good investment to our buyers. We offer more routes in one place than anyone in the business. Our website will help you browse our routes with ease. We are the best brokers in the business!
10. Is a route a good investment?
What are the advantages of owning a route? A route can be a very profitable investment. In addition to earning a good living, there are many advantages:
a) You are your own boss and this is your business. You are usually responsible only to yourself. With a few exceptions, you can generally set up your own schedule to deliver the product and service your customers.
b) You can write off many of your expenses over the course of the year - including vehicle expenses, vehicle depreciation and, in some instances, a portion of your home (if you use it as a base of operation). Also, if you are paying off notes to the seller of a route, you can write off the interest as a business expense. In most cases, you can pay significantly lower taxes than if you worked as a regular employee.
c) As you build up the route and increase customers and/or sales, the value of your route will also increase. If you are aggressive, you can almost always add additional business. The majority of Mr. Route’s buyers earn a profit in the sale of their routes. Our routes are great money makers!
11. Do most routes include a vehicle?
Do I need a special license? Yes, most routes include a truck. You can expect to pay more for a route with a new truck, just as you will pay less for a route with no truck or with a truck in need of repairs. You should always have a mechanic inspect the truck before closing on a route.
For the average bread, chip or cookie route, all you need is a regular license. As a general rule, routes with vehicles weighing in excess of 25,999 lbs require a CDL licence, which you can obtain by passing a written test followed by a necessary road test.
Route owners interested in FedEx Ground require a non-CDL Class “C” licence. High-volume routes, beverage routes, or routes that require refrigeration, usually require a CDL Class “B” license. Neither license is difficult to obtain but can cost as much as $800 if you choose to go through a driving school.
12. Do any routes offer medical benefits or a vacation plan?
How do these routes work? Most routes do not offer medical benefits. However, some group associations (Long Island Health Alliance and Long Island Business Owners Association, for example) offer packages. State programs such as Child Health Plus, Family Health Plus and Healthy New York also offer deals, so long as you qualify.
Some large distributors offer vacation plans, but it’s typically the owner’s responsibility to get someone to take over the route. Surrounding distributors may take over some stops to cover your route, so long as you reciprocate during their vacation time.
In the case of illness or injury, some companies hire house drivers to take over the route. Each distributor works differently and specific distributors can provide further details.
13. How can I increase my weekly sales and/or number of stops?
Although most route owners are satisfied with their current earnings, many would like the opportunity to potentially increase sales. Additional stops are almost always available on any type route you purchase - including delis, diners, restaurants, bars, supermarkets, pizzerias, office cafeterias and even country clubs.
You can also increase weekly sales at existing stops by introducing new product lines and offerings. New stops and higher volume can translate to a significant increase in the value of your route.
14. Can my route lose value?
The value of a route may decrease if the sales and net decrease. This can occur if your route fails to properly service its customers. As in any business, courtesy to your clients and good customer service are essential to success. Occasionally, other factors can decrease the value of a route - such as a particular stop going out of business.
15. Can I buy a route as an investment and hire a driver to run it?
Although there are exceptions, as a rule, companies do not like absentee ownership. Most companies will not approve you under these circumstances, as it defeats the purpose of finding owner operators in the first place.
Independent routes - such as Italian bread, office cleaning, floor waxing and food and beverage routes, which are not company routes, are all examples of routes you can run absentee. Again, for the most part, these routes are not protected and thus require your driver to be very responsible.
16. How much knowledge of the route business do I need to be successful?
Only one of five buyers who purchase from Mr. Route have previous route experience. The majority of our customers have little or no knowledge of what it takes to succeed in the route business. Our friendly, knowledgeable and experienced brokers will teach you all about the route business, as will the current owner.
Most routes are surprisingly easy to learn. There are some types of routes, such as meat routes (because of the different cuts of meat), and a few other specialty routes, which may require some experience or more in-depth training. Many companies offer complete training before you close, or will send a supervisor with you after you close on the route, to make sure you know the route inside and out.
17. How can I verify the figures given on a route?
Most distributors supply the buyer (with the seller’s approval) a computer-run of the purchases and charge sales, which include supermarkets and chain accounts. Independent routes, in most cases, work the same as cash routes, in that the seller provides all the necessary purchase sales receipts. You can typically check the figures for the last year to get an average weekly net.
The best method to determine the sales and profits on a cash route is to go out on the route with the owner. Sellers should also have all the receipts for these accounts. At this point, it should be relatively easy for you to verify gross profit. Simply deduct the expenses (as mentioned in question 6) to get to your net profit.
18. If I like a particular route, what is the next step?
After you obtain information on a particular route, the next step is to actually go out on the route with the owner. Our brokers are happy to schedule you a time, a meeting place and a date to meet with the owner, so that you can learn more about the particular route.
We recommend you spend the first day or two to determine if you like what the seller is doing and if you could see yourself doing that type of work. As you spend more time, you will also explore the seller’s relationships with customers, operation at the depot, sales figures, stocking of the products, condition of the vehicle and various ways to build up the route.
19. How long do I go on the route with the owner?
After a few days, you should be able to decide whether or not to pursue the route. If you’re interested in the route, you can bring a refundable binder into Mr. Route’s office. Binders are usually refundable for one week to ten days, so you have time to verify the figures. Binders are also refundable if the company does not approve you.
Over the next few weeks, you should go out as often as possible, and continue checking out the route and the numbers. This will be the most important time you spend and should determine whether you purchase the route or not. Closing is usually two to four weeks after the binder or after a company’s approval, which can take an additional couple of weeks.
These are the most basic questions buyers ask about the route business. However, we welcome any additional questions. Call Mr. Route for the answers to anything else you need to know about routes. We are happy to assist you in purchasing a route.
A family owned business that treats you like family, Mr.Route is your route to success. We're proud to set the industry standard with the lowest commissions and no six-month listings with automatic six-month renewals. For friendly service, excellent advice and guaranteed available routes as early as next day, call any time to talk to the best brokers in the business for a free consultation.
If you are thinking about the purchase or sale of a route business, and need your questions answered, please call. We guarantee speedy results and, of course, a free consultation!
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