Running a route is four jobs: keeping machines stocked, watching what each one earns after fees, filing sales tax, and renewing permits on time. On our gym smart cooler, $500 of monthly sales leaves $347 after product and card fees, before the location’s commission and our time.
The tax and permit details here are California’s. The stocking and money sections apply anywhere.
Stocking
A smart cooler and any machine with a card reader report sales remotely, so you can see what has sold before you drive. Stock to what the machine tells you.
If a machine holds food that needs refrigeration, California’s food code sets the rules for how you handle it (CalCode6):
- Source. Food has to come from an approved source: a licensed processor or a permitted commissary. Home-made food is not allowed.
- Packaging. It is sold in the package the commissary or processor put it in. No repacking, and no bulk refrigerated food.
- Temperature. 45°F or below inside a vending machine. The limit for other food facilities is 41°F, and an inspector may hold you to that.
- Thermometer. One in each refrigerated unit, reading the warmest part.
- Cleaning record. A record of cleaning and sanitizing kept inside each machine, current for the past 30 days.
- No wet storage. Packaged products cannot sit in water or ice.
Card fees
In Cantaloupe’s 2026 report, 78% of food and drink vending sales on its machines were cashless in 2025, and the average cashless purchase was $2.45 against $1.57 for cash (Cantaloupe7). Card fees are the cost of that.
| Processor | Rate | Monthly fee |
|---|---|---|
| Our smart cooler | 4% | $8 |
| Cantaloupe8 (Engage, G11) | 5.95% | $9.95 |
| PayRange10 | 3.95% + $0.02 | $0.99–$1.50 per week; 10-machine minimum |
| Nayax12 | Not published by Nayax | $9.99 |
A flat percentage costs the same share of every sale. A rate with a per-transaction cent fee costs more on small tickets: 3.95% plus 2 cents is 4.8% of a $2.45 sale.
Cantaloupe describes a two-tier option that adds ten cents for card payers to offset the fee (Cantaloupe9). Smart cooler platforms charge more than a bare card reader; the fee comparison runs from $65 to $178 a month on $500 of sales.
The monthly numbers for each machine
Work out one of these for every machine, every month.
| Gross sales | $500 |
|---|---|
| Product, 25% | −$125 |
| Card fees, 4% + $8 | −$28 |
| Left before commission and our time | $347 |
The two lines missing from that receipt are the ones that differ most between locations. Commission is whatever you agreed, as a percentage of gross sales. Your time is the hours spent driving and stocking. A machine that looks fine on the first four lines can lose money once those two are in.
Shrink. Product that leaves without being paid for. No survey publishes smart cooler shrink. In Automatic Merchandiser’s 2026 State of the Industry survey, nearly two-thirds of operators reported micro market shrink below 5% (Automatic Merchandiser11). In a smart cooler it shows up as the difference between what you loaded and what the system charged for.
Sales tax
California presumes vending prices include sales tax (CDTFA Regulation 15741). You do not add tax at the machine; you back it out of what the machine took in. If you skip that step and report gross receipts as taxable sales, you overpay (CDTFA Publication 1183).
What is taxable depends on the product (CDTFA Regulation 15741):
| Product | Taxable share of receipts |
|---|---|
| Cold food: chips, candy, juice, still bottled water | 33% |
| Hot coffee, tea, hot chocolate | 33% |
| Carbonated drinks | 100% |
| Hot prepared food | 100% |
| Non-food items | 100% |
The CDTFA publishes factors that do the arithmetic for each tax rate (CDTFA4), applied to the rates in effect from October 1, 2026 (CDTFA rates5). Multiply receipts by the factor to get taxable sales, then multiply by the rate.
| City | Rate from Oct 1, 2026 | Factor, 100% taxable | Factor, cold food |
|---|---|---|---|
| San Diego | 7.750% | 92.8074% | 32.1771% |
| San Francisco | 8.625% | 92.0598% | 32.0868% |
A worked example for a machine in San Diego that took in $400 of snacks and $100 of soda in a month:
| Snacks: $400 × 32.1771% | $128.71 |
|---|---|
| Soda: $100 × 92.8074% | $92.81 |
| Taxable sales | $221.52 |
| Tax at 7.75% | $17.17 |
Keep cold food and fully taxable sales as separate lines in your records, because they use different factors. Regulation 1574 also requires a record of each machine’s location and serial number, purchases, prices, and receipts per location. If you operate in more than one county, the return needs a schedule splitting the tax by county (CDTFA Regulation 15741).
Paying the location
Commission is a percentage of gross sales unless your agreement says otherwise. Card-reader and smart cooler dashboards export sales by machine and date range, which is the report to send with the payment.
What changes as the route grows
At 20 machines the FDA’s calorie labeling rule applies (FDA15). You have to show calories for each item, and your name and contact details on or near the machine. Items whose Nutrition Facts label the buyer can see before purchase are exempt, which can apply in a smart cooler, where the customer handles the product before paying.
Accessibility. Under the ADA standards, at least one of each type of vending machine at a site must have its controls between 15 and 48 inches above the floor, with a clear floor space of 30 by 48 inches in front (US Access Board16).
More than one county. Each county health department permits its own machines, and each city has its own business registration.
Renewal calendar
| What | When | Cost |
|---|---|---|
| San Francisco business registration17 | Renew by the last day of February; runs April 1 to March 31 | $55 if SF receipts are $100,000 or less, plus $4 |
| San Francisco DPH vending license18 | Runs April 1 to March 31 | $273 per machine through March 2027, then $300 |
| San Diego business tax certificate19 | Annually | $34 plus $4 for 12 or fewer employees |
| San Diego County vending permit14 | Annually; schedule revised each July | $98.50 per 10 machines |
| California LLC franchise tax20 | 15th day of the 4th month of the tax year | $800 |
| California LLC Statement of Information21 | Every two years | $20 |
| Sales tax return | On the schedule the CDTFA assigns | — |
| General liability insurance | Annually | $442 median, per Insureon13 |
