Before you can start making money with a vending machine business, you’ll have to get a business license. That’s right—vending machine owners can’t just place their machines down wherever they please. Operating a vending machine is a regulated business, even though it’s pretty hands-off.
Vending machine owners need to be a registered business - just like someone who sells food in a retail - which comes from registering as an LLC in your state. You’ll also need to get an employer identification number (EIN) from tax and fee administration, so you can pay sales tax properly.
What’s more, you'll need a seller's permit. Plus, vending machines also need to comply with the ADA (American Disability Act) and label laws.
If all of this has you feeling flustered already, don’t worry. We’re here to make the process simple and straightforward. By the end of this guide, you’ll know exactly what you need to start your vending machine business.
How to get a vending machine license?
We can break down the licensing process for small businesses into 3 steps:
- Register for an Employer Identification Number (EIN) with your local government
- Set up an LLC for your vending machine business
- Make sure you meet local laws, label laws and the ADA requirements
1. Get an EIN for a Vending Machine License
Good news: it’s 100% free to get an EIN from the Internal Revenue Service (IRS). Head over to the official site and fill out the application.
You’ll also need an EIN for an LLC and to file your taxes as a vending machine owner or a business owner. If you ever hire employees in the future (like an accountant or someone to manage your machines), then you would also need an EIN.
2. Register for an LLC in Your State
The next step of getting a vending machine license is registering as an LLC, or limited liability corporation. LLCs separate your personal and professional finances, which protects assets in the event of legal trouble for vending machine companies.
Your LLC will be the legal entity that represents your machines and allows you to file taxes. If someone was ever injured by one of your vending machines, an LLC prevents you from being personally held liable for their damages.
In order to register for an LLC, you’ll need to come up with a name, complete the appropriate paperwork, and file it with your state. The easiest way to do this is by searching “how to get an LLC in [your state]”. You’ll see a .gov website that will walk you through the process.
For example, let’s say you’re in New York. By entering the search query above, you’d be directed to https://dos.ny.gov/forming-limited-liability-company-new-york. Here, you would complete all the steps, file your documents, and pay the necessary fees.
It costs between $150 to $350 to register as an LLC in the U.S.
3. Meet Vending Machine Label Laws and ADA Requirements
The Food and Drug Administration (FDA) lays out vending machine label laws that help consumers make more educated food choices.
If you own more than 20 vending machines, you are legally obligated to follow the label rules. Someone who has fewer than 20 vending machines isn’t required to follow the FDA laws, but they can elect to do so.
We suggest following them anyway because it helps protect your vending machine business against any lawsuits.
The vending machine label rule requires you to display calorie information for products that you sell. The Center for Science in the Public Interest breaks down exactly how you should go about this:
- You should display calories for food items that don’t have visible nutritional information until after the point of purchase.
- Calories can be listed on a sign attached to the vending machine or next to it.
- You must display the caloric information in a font that isn’t smaller than the name of the foods on the machine, the selection number, or the food price.
If the nutritional labels are visible in the machine, then you don’t have to display the calorie count in products. But since most vending machines don’t make it feasible to read nutrition labels, labeling products is the best way to help people make informed choices about their diet.
As for Americans with disabilities act ADA requirements, you should ensure the design of your machine is accessible to people in wheelchairs or with limited mobility. The Americans with Disabilities Act Standards for Accessible Design (ADA) requires vending machines to have their interactive components of the machine to bet between 15-inches and 48-inches up from the ground.
The ADA vending machine regulations were updated in 2020 thanks to the “upside down rule.” Under this rule, owners have to ask themselves, “What would happen to my machine if the building it's in was turned upside down?”
If it would fall onto the ceiling, then your machine is exempt from the ADA rules. This means that only vending machines bolted into place are actually required to comply with ADA standards.
You should also ensure that your vending machines are accessible to people with disabilities. You can read more about that here.
How do I comply with state requirements?
The first move when getting a seller's permit is to visit the IRS business directory and select your state from the list. If you prefer paper application, you can visit your local city hall (local government) to to request it. Then, click “Business Licenses and Permits” under the header, “Doing Business in the State.”
Then, you’ll be able to research the vending machine permit and requirements where you live. After researching vending machine permit, you can research vending machine requirements. If you aren’t able to find it, try searching, “vending machine requirements in [your state].”
In addition, you need to consider what you plan on selling. Not only because you need to calculate profitability but because of the permits as well. If you plan on selling beverages, you might need to apply for a beverage license as well.
Expect to pay a business license fee, which is usually around $100 for your first machine and less for any future machines.
Registering for a state business licenses can be done online. You may have to also register with a local health department or health agency like the Environmental Health Services Department. In addition to vending machine business details, you’ll also have to provide technical information about your machine. Once you begin to operate vending machine, the inspection may pay you occasional visits so make sure food items and drinks are under proper temperature and within the expiration date.
If you’re ever truly uncertain about what you need to do to get a vending machine license, you can contact a small business lawyer in your state. Many offer free consultations, which can help you get answers to your questions without paying hundreds of dollars.
If you do decide to pay a lawyer, they can actually handle the registration process for you.
How do I get permission to set up a vending machine?
Once you’re fully registered as a business, you can start scouting the best locations for a vending machine.
Check out our complete guide: How to Find Vending Machine Locations
The first thing you’ll want to do for your vending business is research your local market. What neighborhoods have the greatest opportunity for vending business? The right location can easily make you hundreds of dollars a month. In a bad spot, you might not even break even on the cost to stock your machine.
Ouch.
We suggest visiting locations in person to see whether they’d be a good fit for a vending machine. You want to make sure that your machine would be in a highly visible space with a lot of foot traffic each day.
Aim for spots that have at least 50 people passing by daily. Other locations for vending machines include office spaces, schools, college campuses, and malls.
Once you’ve settled on a few locations, you’ll have to be ready to pitch your vending machine to the property owner. It's good for vending machine companies to know you’re selling a business, not the machine. You should have a good tried-and-true vending machine proposal put together with a professional touch, value proposition, logo and design. You should also have a vending machine contract ready.
You want to make it clear that leasing their space out to you would be a benefit to their business. In other words, you have to incentivize the owners of the property by illustrating the value of placing a vending machine in their establishment.
How to Get in Contact With a Business Owner to Get Permission
One way to do this is by simply cold calling a location. Pick up the phone, introduce yourself, and ask to speak with the appropriate person. Usually, this is a manager. You can also find their information online (like a vending business email). Attach a short vending machine proposal, or just break down the most essential details of your offer in the message. If you're a school staff member, we've also made a template that illustrates how to get a grant for a book vending machine at your quarters.
While cold calling isn’t the most exciting way to land clients, it can be highly effective. Just be prepared to send a lot of messages that go unanswered. It’s part of the business - specially the vending business.
If you’re an outgoing person, door-to-door marketing can also be effective. You physically visit an establishment, ask for the manager, and pitch your vending machine placement. You should have some details to leave with them, like a handout with details about your offer and a business card with contact information.
Remember that the goal is to reach out to whoever is in charge. You want to speak with the business’s decision-makers, so you can get definitive responses as quickly as possible. The sooner you start to operate a vending machine and put it to business, the sooner you start earning!
We cover this process in more details in our piece How to Start a Vending Machine Business.
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