Top 20 Route FAQ

1. What is a route?

A delivery route is a collection of stops stores and other business or home customers, where a specific product is picked up and delivered. These customers may include supermarkets, delis, grocery stores, diners, restaurants, schools, nursing homes and even factories and office buildings. Payment is usually made to the owner of the route for the product that has been delivered, either by C.O.D. or on a weekly basis.

2. What types of routes are there?

There are many different types of routes that can be purchased. Some categories include Bread, Meat and Provisions, Beverage, Cookie, Cake, Snacks, Coffee Catering, Dairy, Vending, Newspaper, Ice Cream, Fed Ex and even Office Cleaning. Some of these are name brand routes and others are not. The ones, which are not, are called Independent routes.

3. What does the term “protected” mean?

Protection on a route refers to how a particular company secures their routes. A route protected by area means other route owners from that company can’t deliver in your geographic area, which is spelled out with specific boundaries. Other routes can be protected by stops, which simply means the accounts you have when you buy the route or add while you own a route are protected, but you don’t have a specific area. Either way this is in writing with the company in what is called “Distributor’s Agreement”. 

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 best prices and diversified product lines. Types of independent routes may 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, Pepperidge Farm, Boar’s Head, and Fed Ex are usually household names and have geographic territorial boundaries.

5. Which type of route is the better buy?

If the route is well established with good solid accounts, an independent route has a lot to offer a buyer looking for a high net, and at the same time, requiring less money than a name brand route. A protected route offers a secure base, a known distributor and the benefit of carrying a recognizable name brand. You may want to investigate both types of routes to decide which best suits your needs.

6. What is net?

The industry standard of net is the money left at the end of the week after paying for product, gas, maintenance and insurance at the minimum. Other expenses may include a helper, truck payment, parking, tolls, a warehouse fee, or cell phone, if needed. Expenses never include taxes, a note to the seller, medical benefits or your own salary.

7. How much does a route cost?

The prices of routes vary according to how much the route is netting, the route type, the 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 now go for 2 ½x - 3x the net, with some even going for as high as 4x net. {Ex: Pepsi, Boars Head, Snapple and Pepperidge Farm Cookie routes}. Most route owners who are willing to hold a note want at least 50-70 percent down payment.

8. How is financing done?

a) Financing of the down payment on a route can usually be obtained through either a personal loan, second mortgage or a home equity loan. Personal loans are usually limited to $10,000 - $20,000, and that’s with good credit. The Small Business Administration (SBA) and banks do not usually give business loans on routes, because in the case of a default, they are not in a position to take back a route. 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 and get a lower interest rate than what sellers  are typically able to offer. 

b) The balance remaining after the down payment is usually held by the seller of route.  The note the seller holds is personally guaranteed by buyer. The length of time and the amount of interest on notes varies according to market conditions. Most sellers currently require 6-8% interest rates . Payments are typically made monthly. The amount of the monthly note is usually equivalent to about one week’s net.

9. What is the advantage of using MR. Route to purchase your route?

For many buyers, this will be your first venture into routes. 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, which our years of experience indicate is a good investment for our buyers. We offer more routes at one place than anywhere else.  Browsing a sampling of our routes for sale is easy on the web.  Just click on a state you are interested in to check them out.

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 other 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 for the delivery of the product and the servicing of your customers.

b) Many of your expenses can be written off over the course of the year including vehicle expenses, depreciation of vehicle and, in some instances, a portion of your home, if you use that as a base of operation. Also, if you are paying off notes to the seller of a route, the interest you’re paying can be written off as a business expense. In most cases, your taxes will be reduced significantly from what they would be if you were working as an employee for someone.

c) As the route is built up and customers and/or sales increase, so also does the value of your route. If you are aggressive, there is almost always additional business to be added. Most routes have positive cash flow from day one! The majority of MR. Route buyers have made a profit in the sale of their routes. Routes Are Money Makers!

11. Do most routes include a vehicle and do I need a special license to drive?

Yes, most of the time a truck is included. You can expect to pay more for a route with a new truck, just as you will pay less for a route, which has no truck or a truck in need of repairs. You should elect to have the truck checked out by your mechanic before closing. For the average bread, chip or cookie route a regular license is all that’s needed. As a general rule, if a vehicle weighs in excess of 18,000 lbs, a CDL license is needed. In order to secure such a license, a written test followed by a road test is necessary. If you are looking at Fed Ex Ground, you do need a non-CDL Class “C” License. For high volume routes, beverage routes or routes that require refrigeration, you usually need a CDL Class “B” License. Neither license is that difficult to obtain but can cost as much as $800 if you choose to go through a driving school.

12. Can I find a route that offers medical benefits or a vacation plan and how do they work?

As far as medical benefits are concerned, most routes do not offer them. There are group associations to call, for example check out our link to Bush Truck Leasing and the special health insurance program route owners have available to them. 

Vacation plans are offered by some large distributors such as Wise and Fed Ex but for the most part, it is usually the owner’s responsibility to get someone to service the route for them. Sometimes surrounding distributors can take some stops so your route is covered, as long as you reciprocate when they want to go away. In the case of illness or injury, some companies have house drivers to service the routes. Each distributor works differently and further details are available through specific distributors.

13. How can I increase my weekly sales and/or number of stops? Will this increase the value of my route?

Although most route owners are satisfied with their current earnings level many would like the opportunity to have the potential to increase sales. There are almost always additional stops available on any type route you purchase such as delis, diners, restaurants, bars, supermarkets, pizzerias, office cafeterias and even country clubs. Weekly sales may be increased at existing stops by introducing new product lines your distributor offers. New stops and higher volume can mean a significant increase in the value of your route.

14. Can the value of a route go down?

The value of a route may decrease if the sales and net decrease. This can occur if your customers are not being properly serviced. As in any business, courtesy to your clients and good service is essential. Occasionally, other factors can cause route values to decrease such as a particular stop going out of business.

15. Can I buy a route as an investment and have a driver run the route?

Although there are exceptions, as a rule, companies do not like absentee ownership and will not approve you if they know your intentions. This defeats the purpose of why they went to owner operators in the first place. Independent routes such as Italian bread routes, office cleaning, floor waxing, as well as food routes and beverage routes, which are not company routes, are all examples of routes, which can be run by absentee owners. Again for the most part, these are not protected routes and your driver needs to be very responsible.

16. How much knowledge of the route business do I need to be successful? 

Since only 1 out of 5 buyers who purchase a route from us has had previous route experience, little or no knowledge of routes is usually necessary to be successful. MR. Route's brokers will teach you about routes, as will the current owner. Most of the routes are easy to learn. However, there are some types of routes, such as meat routes, which because of the different cuts of meat, and a few other specialty routes, may require some experience or more in-depth training. Many companies offer training before you close or will send a supervisor with you after you close on the route to make sure you know your route.

17. How can I verify the figures given on a route?

Most distributors will supply a buyer (with seller’s approval) a computer-run of the purchases and the charge sales, which include supermarkets or chain accounts. Independent routes, in most cases, would work the same as a cash route in that the seller will provide all the necessary purchase sales receipts. Checking the figures for the last year is usually sufficient to get an average weekly net. The best method of determining sales and profits on a cash route is to actually go out on the route with the owner. Sellers should have all the receipts for these accounts. At this point, it should be relatively simple to verify gross profit. Deduct the expenses as mentioned in Question #6, to get to your net profit.

18. If I like a particular route, what is my next step?

Once you’ve obtained information on a particular route, the next step is to actually go out with the owner. After one of our brokers has scheduled you with a time, a meeting place and a date to meet with the owner, you can learn more about the particular route of interest. The first day or two should be spent to see 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 be looking at the seller’s relationships with his customers, the operation at the depot, the sales figures, how product is stocked, 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 going on the route a few days, a buyer should be able to decide whether or not to pursue it. If there is interest in the route, a refundable binder can be deposited with MR. Route. A binder is usually refundable for 1 week – 10 days, so you have time to verify figures. The binder is also refundable if the company does not approve you. For the next few weeks, the buyer should check out the route and the numbers and continue to go out as often as possible. This will be the most important time of looking at the route and should determine whether you purchase it or not. Closing is usually 2-4 weeks after the binder or after a company’s approval, which can take an additional couple of weeks. Now you're in business!

20. What other questions do you have?

Call MR. ROUTE's brokers for the answers to anything else you need to know about routes. We have found these to be the basic questions asked by most buyers, but will welcome any additional questions. We will be pleased to be of any assistance to you in your purchase of a route.

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Contact Us

MR. Route representatives in your area are available for you from 8:00-7:00 CST/EST daily.

Contact either:

Chuck Marcus
Executive Sales Associate
561-702-8998
chuck@routeinfonow.com

Barry Prather
Executive Sales Associate
904-868-6809
barry@routeinfonow.com

Mr. Route SunStates, Inc. and the term executive sales associate are marketing conventions. Chuck Marcus and Barry Prather are licensed Florida real estate sales associates of Mr. Route SunStates, Inc. – Bryan Kiefer, Broker; license location address is 495 Grand Blvd., Suite 206, Miramar Beach, FL 32550.