One of the most common questions in the negotiation of coffee supplies for commercial outlets is the issue of who pays for & owns the coffee equipment.
Coffee Roaster: *Is always asked to supply $5,6, 7,000 of equipment and POS for each new outlet that wants to use their coffee. *Makes a large impost on capital requirements.
Coffee Shop/Outlet: Is asked by roaster to make a volume commitment to justify the equipment. *If they dont make it they get charged anyway.
This equipment is often described as "free-on-loan" but the cost is often just buried in the price.
There are of course advantages:
Coffee Roaster: Has a greater interest in the end business and more say in the quality of the finished product.
Coffee Shop/Outlet: *Has more access to training and promotional resources with the extra commitment. *Maintenance costs of equipment covered by Roaster. *Less capital costs for starting up.
My limited understanding of how these deals work needs to be expanded as often neither party end up being completely happy. *So far we have always resisted providing free-on-loan to coffee shops/cafes but I see that it is quite a part of the business.
Has anyone got any feedback on systems which have worked really well for each party?