Pizza vending machines

I've seen pizza vending machines pop up in local news over the past couple years. Is this a good passive income stream? Huge margins on pizzas as is, overheads - rent, COGS Β and maintenance. I've e-mailed a company about franchising their model already (they have four units). Thoughts, feelings?

Comments (31)

6mo
Isaiah_53_5 πŸ’ŽπŸ™ŒπŸ’ŽπŸ™ŒπŸ’Ž, what's your opinion? Comment below:

Okay I like it, Picasso!

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

6mo
Isaiah_53_5 πŸ’ŽπŸ™ŒπŸ’ŽπŸ™ŒπŸ’Ž, what's your opinion? Comment below:

"leading machines could make up to $90,000 a year selling 40+ pizzas per day.

According to the Daily Mail, the Let's Pizza vending machineΒ retails for $32,000."

https://www.howmuchisit.org/pizza-vending-machine-cost/

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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6mo
Isaiah_53_5 πŸ’ŽπŸ™ŒπŸ’ŽπŸ™ŒπŸ’Ž, what's your opinion? Comment below:

https://www.apitech-solution.com/us/en/news/pizza/how-profitable-operating-1-or-more-smart-pizza-machines

Smart Pizza Sales Projections

Let's take the hypothesis that the average production cost of a regular 12 inches pizza is $2 and the average sales price is $11.50. Taking into account fixed and variable costs, such as:

> cost of financing
> production costs & packaging (pizza boxes and aluminum trays)
> bankcard fees & commissions
> insurance
> Internet connection & management software
> labor to refill Smart Pizza
> rent*
> waste of unsold pizzas

*If you don't rent a location, or choose other options, the profit can be bigger.Β 

Here is a quick look at the potential income when you own a Smart Pizza:

You sell20 pizzas / day30 pizzas / day50 pizzas / day100 pizzas / day
You earn (monthly profit margin)$2 591$5 157$10 289$22 962

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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6mo
Isaiah_53_5 πŸ’ŽπŸ™ŒπŸ’ŽπŸ™ŒπŸ’Ž, what's your opinion? Comment below:

I think a key location would be a bar that doesn't serve food with an outdoor section where you could put the machine. Possibly could tell bar owners to split profits. Win/win.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

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6mo
2rigged2fail, what's your opinion? Comment below:

definitely. beach/boardwalk etc too. generally anywhere with drunk young people.

  • 2
6mo
Isaiah_53_5 πŸ’ŽπŸ™ŒπŸ’ŽπŸ™ŒπŸ’Ž, what's your opinion? Comment below:
PSDH1

ngl the pizza looks quite nasty

Yeah I have to be honest, quality control is an important aspect of selecting the right pizza machine. It better taste good.Β 

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

6mo
Isaiah_53_5 πŸ’ŽπŸ™ŒπŸ’ŽπŸ™ŒπŸ’Ž, what's your opinion? Comment below:
absolutenobody

Why would anyone buy this shit over a pizza at a shop?

I think the key is to place it in an area without many takeout options. Or in areas where the restaurants and food close at midnight or 2am and the bar is open till 4am etc.Β 

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

6mo
GoingToBeAnMD, what's your opinion? Comment below:

Isn't the old VC joke about how everyone in Silicon Valley is just putting out the next great pizza delivery app?Β 

I've got like 10 apps on my phone that can get me a fresh pizza here in under 45 minutes. What the fuck am I going to buy it from a vending machine for?

*
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6mo
BobTheBaker, what's your opinion? Comment below:
GoingToBeAnMD

Isn't the old VC joke about how everyone in Silicon Valley is just putting out the next great pizza delivery app?Β 

I've got like 10 apps on my phone that can get me a fresh pizza here in under 45 minutes. What the fuck am I going to buy it from a vending machine for?

- Price

- Convenience

- 24/7 availability (another form of convenience)

Array

6mo
2rigged2fail, what's your opinion? Comment below:

Cos it takes 4 minutes to warm up, efficient market hypothesis states a rational individual would save the 41 minutes of anticipation by utilising a vending machine, and not bear the transportation costs. Secondly, can you get a delivery 24/7? i.e. when you're already out, after a night of drinking?

  • 2
6mo
GoingToBeAnMD, what's your opinion? Comment below:

Are you new here? Uber Eats will delivery anywhere anytime now. Heck, they even incentivize you to do it by giving you more points when you order to a hotel on a trip. The time argument doesn't hold because no one would rank the quality of a pizza from a vending machine as being equal to something made - the wait is easily justified. Plus who is going to be able to handle customizations better, a vending machine or a restaurant?Β 

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5mo
ironman32, what's your opinion? Comment below:

Seems like a Peloton idea, something that would be hot off the start because people try it once, then never come back.Β 

Pros: kind of what everyone mentioned above. I don't know the details of pizza delivery in the UK, might work there. Might be great at say a truck stop.

Cons: Most places this would seem to be a success probably has access to pizza late night already, i.e., most boardwalks have a late night pizza shop. I get someone will probably buy it at 4am if food places close at 2am, but I don't think thats a great business model (how many times will someone buy a pizza at that point)?

5mo
kodi, what's your opinion? Comment below:

Ideas to improve solution in the future:

Immediate
- co-brand with an existing quick-service brand to increase uptake, guarantee quality of product/processes and find synergies in sourcing/supply chain/advertising
(consumers more willing to take up new channels if brand/product is known or quality is assumed higher)
- combine loyalty solutions
beta test
- Initially, work with existing delivery aggregators to pick up the product from the vending machine to doorstep for last mile use cases
- add chilled section of drinks and smaller desserts which the driver can add to the order with a QR code or something

Horizon 1
- automated delivery from machine to doorstep with 3rd party provider (robots); requires technical solution/dock so robot can pick it up
- combine digital travel disruption management solutions with these automated vending machines
(flight delayed/canceled and you are stuck in a middle of nowhere at night, but airline sends voucher for a warm pizza)
- great for disaster management ie hurricane, power outage, flooding, etc if machine can be converted for battery packs or downsized a bit (Waffle House have a "jump team" with lots of automation going on - so licensing the tech is another stream)
- Pizza is a great start for a product that can be made in a machine - it would be great if the machine (or another part of the machine) had more than just pizza though

Overall challenges/negotiations

- Malls, larger travel hubs (rail, bus, airports,etc) already have existing, long-term concessions for most food sectors
- This could be a great solution if above mentioned pizza brand would add this to their portfolio when their regular franchise are closed at these hubs. (happens a lot in Asia)
- Also great for small/boutique vending scenarios like drive-in movies during the summer, movies at the park, high footfall locations at night, etc
- Some outdoor events would take this up, but would require additional thoughts, like events on a boat that doesn't have a kitchen

They also need good sales teams to place as many machines as possible in dormitories, gyms, etc

I was approached by a sales team that distributes pizza vending solutions. They also work with a financial services firm that provides financing for prospective franchisees - that is an interesting business area as well.

5mo
Isaiah_53_5 πŸ’ŽπŸ™ŒπŸ’ŽπŸ™ŒπŸ’Ž, what's your opinion? Comment below:

This also made me think of airports. Not sure if anyone has been bumped from a late flight to the 6am flight, but from midnight to 6am not many places are open. Usually McDonalds and Starbucks open at 6am. This could be prime time to sell pizzas. Only downside would be high rent, but could pass on price to customer and have slightly more expensive pizzas.Β 

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee

  • 1
5mo
kodi, what's your opinion? Comment below:

Airports have exclusivity agreements with quick serve restaurants groups and the franchisees are only owners of these location. Due to the different legal requirements for hiring, managing and securing airport locations, the operators are often another group like HMS Host.
A McDonald's burger flipper may have a previous conviction in the Bronx, but he can't work for McDonalds at JFK. So the airline and terminal operators need to work with an equally large pizza chain to come up with a working trial. Airports and other travel hubs are also fairly complex when it comes to installing machines for fire/health/safety risks, etc (imagine if someone breaks into a machine and steals a sharp pizza cutting wheel airside).

Vending machines are a location play, so the franchise/operator groups that come up around it need locations and place as many machines as possible.

Good places would be also hospitals, exhibition/meeting centers, electric car charging hubs, busy highway stations, and so many more.

5mo
Costin8, what's your opinion? Comment below:

Maybe a UK thing but feels like the trend is going the other way.

I.e. seems to be a new "artisan" / "craft" pizza place popping up every month, so think the days of low quality pizza largely dying.Β 

5mo
EBITDAdjokes, what's your opinion? Comment below:

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21d
2rigged2fail, what's your opinion? Comment below:

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