(Topic ID: 225258)

Operators! Please - A question about operating agreements.


By Dbaum88

1 year ago



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  • Latest reply 1 year ago by YeOldPinPlayer
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    #1 1 year ago

    I am looking to place a pin or two in some nearby beer halls. I was wondering if anyone could tell me the standard agreement with the establishment for operating a pin? Do I take ALL the money and just give the establishment the convenience of having a pin? Or, do I split the profits in some way and if so, who gets how much? I want it to be profitable but still a draw for the establishment which may be reluctant to do it.

    THANKS!!

    #2 1 year ago
    Quoted from Dbaum88:

    I am looking to place a pin or two in some nearby beer halls. I was wondering if anyone could tell me the standard agreement with the establishment for operating a pin? Do I take ALL the money and just give the establishment the convenience of having a pin? Or, do I split the profits in some way and if so, who gets how much? I want it to be profitable but still a draw for the establishment which may be reluctant to do it.
    THANKS!!

    I know a lot of deals are 50/50 on coin drop

    #3 1 year ago
    Quoted from xbmanx:

    I know a lot of deals are 50/50 on coin drop

    Which deals are those? I've heard many unconfirmed numbers.

    #4 1 year ago
    Quoted from YeOldPinPlayer:

    Which deals are those? I've heard many unconfirmed numbers.

    What have you heard?

    #5 1 year ago

    It's typically 50/50, but I've heard of some 60/40. It's all what you negotiate with the establishment.

    I'd be more concerned with insurance. Making sure you and the property owner are covered by patrons hurting themselves on a machine, machine getting damaged (vandalism), destroyed in a fire or the pin catching on fire and destroying the establishment.

    #6 1 year ago
    Quoted from Dbaum88:

    What have you heard?

    0/100, 25/75, 40/60, 50/50. Without evidence to show any of them are true or accurate in your area they aren't useful.
    Coinbox Pinball podcast had some good info for hobby operators. They are in MN. No longer making new podcasts but the old stuff should be available.

    11
    #7 1 year ago

    50/50 is garbage. Don’t do it. 60/40 or higher. The machine costs more to maintain than it does for the establishment to simply plug it in. Make sure you get more for the money you’re gonna put in to fix it

    #8 1 year ago

    A few operators I know do 75/25 on pins and 50/50 on arcade games. You will definitely have maintenance issues with pinball and at 50/50 you won’t make a lot of money. I’m looking to route some pins as well, gotta find that percentage that makes everyone happy

    #9 1 year ago
    Quoted from Isochronic_Frost:

    50/50 is garbage. Don’t do it. 60/40 or higher. The machine costs more to maintain than it does for the establishment to simply plug it in. Make sure you get more for the money you’re gonna put in to fix it

    This is precisely why the industry doesn’t really exist anymore. The only reason to have a machine is to get people in there to buy alcohol. I agree, 60/40 Bare min

    #10 1 year ago

    As an arcade owner back in the late '70s, my deal with the machine owner was 50/50 on everything, but I was doing the routine maintenance myself. (It didn't take that much time, and nothing irked me more than a machine going triple-O the day after the weekly collection visit.)

    #11 1 year ago

    I’m doing 60/40 for pins one and two. For three pins or more I will do 50/50. It saves me time and money to have multiple pins at one location.

    #12 1 year ago

    All depends on anticipated drop. If its a bar and it will get good action i could see 6/4. If its a hotel where it sits 5/7 days then 9/1. Ya need to take a min rake, could do an adj percentage where its 9/1 for first 50 then 6/4 therrafter. Or do first 50 at 100% then 5/5. Pins are expensive up front and require constant adjustment. Dont shoot urself in the foot.

    11
    #13 1 year ago

    I wouldn’t move forward unless they are willing to do 75/25 at least. Unless you just want to do it for the love of pinball.

    #14 1 year ago
    Quoted from xbmanx:

    I know a lot of deals are 50/50 on coin drop

    Almost NO ONE is doing 50/50 on pins anymore. At least not if they're keeping their pins current. Maybe with some old, beat piece-of-crap machines.

    #15 1 year ago
    Quoted from schudel5:

    Making sure you and the property owner are covered by patrons hurting themselves on a machine, machine getting damaged (vandalism), destroyed in a fire or the pin catching on fire and destroying the establishment.

    The insurance is ALL on you.

    Even if the owner tells you that you are covered under his policy, you are not.

    When someone is in a fight and hits their head on your machine, the bar is sued, the landlord is sued, and the owner of the machine is sued.

    Because it's not Small Claims Court, the cost of the attorney's retainer will start at $15,000

    #16 1 year ago

    The most "common" split for operators is 60/40 for "regular" games, if you want a premium or LE it can go as high as 80/20.

    Most locations won't go for a 100/0 split because they are paying the electric bill, and want to see a tiny bit of "profit" from having it on location.

    #17 1 year ago

    You are going to have to do some research and see what your time is worth and how many plays you really expect to get each week, then factor in your expenses and bench stock of parts. Once you have those numbers figured out, then factor in your fuel bill running back and forth messing around with those machines and how much your insurance is going to cost at which point you’ll most likely need a LLC at a min to get coverage in addition to business agreements/contracts.

    Short answer is every area seem to be different. Personally I’d place some pins in to gather some real data on earnings, plays, and troubles. Id talk with the businesses and see if they’d go with a temporary set split or lease for a period of time then come to a final agreement after data has been gathered. It’s not all about the coin drop. Pins can bring in a lot of extra business a location wouldn’t normally get, especially if there aren’t any other pinballs in town.

    #18 1 year ago

    2/3 split in your favor minimum.
    Even then if there is a significant cost of a repair (I route pins from the 70's to latest) i'll ask location for a little help.

    #19 1 year ago
    Quoted from vid1900:

    The insurance is ALL on you.

    Even if the owner tells you that you are covered under his policy, you are not.

    When someone is in a fight and hits their head on your machine, the bar is sued, the landlord is sued, and the owner of the machine is sued.

    Because it's not Small Claims Court, the cost of the attorney's retainer will start at $15,000

    Don't forget licensing. Go to the city hall in the city where you want to do this and find out : Zoning issues, where you can or can't put coin operated equipment. And what licenses are required. Could be on your business, you, each game, and location. Don't try and get by without. Many cities have hefty fines or confiscate equipment when they catch you.

    LTG : )

    #20 1 year ago

    75/25 is as low as I will go right now. I have two like that and one at 100%. From a numbers standpoint, the coin drop is still barely worth the effort. But this is not all about money. It's about trying to build a culture and player base to grow the hobby.

    Get an LLC and insurance. You can claim all of your expenses, and record your miles driven as that's a huge deduction for me. When you get insurance, you might not even reach the floor of their minimum policy cost with two machines. Also, it might just be my area, but my top 2 games would hardly pay for insurance over the year, just something to consider. Granted I don't have any $1 games. They are all .50 and two .75 games. None of the locations I have are crazy high foot traffic either, so there are a lot of factors that go into earnings.

    #21 1 year ago

    I started with an 80/20 deal and I will not go any lower ever. my first location loves me so much that I now take 100% of the coin it is at a brewery and they know The Games Keep people there drinking beer, do yourself a favor and pair any and all pins with a multicade, and for god sakes start an LLC and pay for the licenses so you don't get sued for some stupid shit

    #22 1 year ago
    Quoted from wisefwumyogwave:

    I started with an 80/20 deal and I will not go any lower ever. my first location loves me so much that I now take 100% of the coin it is at a brewery and they know The Games Keep people there drinking beer, do yourself a favor and pair any and all pins with a multicade, and for god sakes start an LLC and pay for the licenses so you don't get sued for some stupid shit

    Exactly. It boils down to alcohol sales. I used to get paid to run an open mic at a bar. No cover, but I still got paid. Anything to keep people in there drinking. The machines are a similar principle. Other than power cost to run them, the bar shouldn’t be seeing any proceeds off the coin

    #23 1 year ago

    As much as they will let you have. 100% if possible. Hope you enjoy doing a lot of work for no money .

    #24 1 year ago

    I’d offer to place the machines for ‘free’. No cost to them. They get all the beer sales and you collect the coin drop. Win win.

    This is done with other types of entertainment that I’ve done before. In the end they just want more bodies.

    Tell them about how you will list them in pinball databases, websites, local guides. And if you feel like it, tournaments you can run.

    That’s a lot of value to be pitching a bar.

    -1
    #25 1 year ago

    yeah I do 50/50 on everything except the pinballs and vending machines.
    for the pinball machines it's not worth it if you not getting at least 75% or more.

    even at that, you really have to like what your doing.

    Added 14 months ago:

    Mainly because it's a lot more work based on ROI, compared to most other amusement machines.

    #26 1 year ago

    50/50 on any game honestly isnt fair these days unless so much money is coming in with little maintain it makes it viable or other variables making it worthy. what if you have a shooting game at 50/50 and someone physically breaks a $400 gun and only the game owner has to foot the bill? repairs like that constantly coming out of solely the ops pocket makes it hard to profit.
    most ops who do lower intake for themselves their equipment is not high end or well kept from my experience and their pins arent set up correct, basically "blown out".

    #27 1 year ago

    Aim for 100 percent to make it worth your while. The bar will make money as it gives people something to do and they will stay, and drink, longer. It is doable and both parties can be happy. Not everyone will go for it but that's OK.

    #28 1 year ago

    I had two machines in at a brewery's taproom and took 100%. They had good titles that were maintained and kept in good shape.

    After insurance, maintenance, I just broke even, assuming my time is worth $0.

    The machines are a draw that help them sell drinks. The establishment doesn't have to pay the $10k for two machines, and they will treat them like furniture. I've come in to see them being used as tables to display band merch for sale, being surrounded by band gear (even with an amp on top of the glass once), turned off because someone didn't like the sound, and inaccessible because someone set up dining tables too close to them.

    The investment, work, and risk are all on you.

    100% or nothing.

    #29 1 year ago

    70/30 here. Older machines only.

    #30 1 year ago
    Quoted from EvanDickson:I had two machines in at a brewery's taproom and took 100%. They had good titles that were maintained and kept in good shape.
    After insurance, maintenance, I just broke even, assuming my time is worth $0.

    Hey Evan, who did you use for insurance? What was the cost?

    #31 1 year ago

    This is where real brick & mortar distributors shine. They have experience in the route biz and helped new operators with things like this including agreements & contracts.

    #32 1 year ago

    I'd love to have some pins OTP and in the Roswell-Alpharetta-Cumming area. MAKE IT HAPPEN!

    #33 1 year ago
    Quoted from ypurchn:

    I'd love to have some pins OTP and in the Roswell-Alpharetta-Cumming area. MAKE IT HAPPEN!

    Looks like you already have some places with recent pins there:
    Mazzy's sports bar
    Taco Mac at Crabapple
    North River Tavern
    Hudson Grill
    Bobby G's
    Movies 400

    #34 1 year ago
    Quoted from vireland:

    Looks like you already have some places with recent pins there:
    Mazzy's sports bar
    Taco Mac at Crabapple
    North River Tavern
    Hudson Grill
    Bobby G's
    Movies 400

    Hudson grill has closed - I updated the pinside map.
    Bobby Gs and Movies 400 are close enough I’ll stop in and update pinside maps with what I find.
    The others I’ll let others comment on.

    Thanks. I usually just check pinballmap cause the pinside map was so bad before.

    #35 1 year ago
    Quoted from EvanDickson:

    The establishment doesn't have to pay the $10k for two machines, and they will treat them like furniture. I've come in to see them being used as tables to display band merch for sale, being surrounded by band gear (even with an amp on top of the glass once), turned off because someone didn't like the sound, and inaccessible because someone set up dining tables too close to them.

    This is the reason I finally pulled games from one bar, every time I came in there were boxes stacked in front of the cab.
    The floor was always insanely sticky, (I used to sweep and mop (with a fiber towel) the area around the games). The machines were unplugged for one whole week, nobody knew why. Issues were never reported, which sucked because I only came in weekly.
    The management of the place, is just as important as foot traffic.
    The funny thing was this was a well known franchise. The place looked really nice, and it was in an expensive center, so I didn't think twice when they asked for games.

    When I told the GM this was my last month, he wasn't to happy. I told him where to buy his own stuff or where to find another operator if he wanted to mess with it and appreciated the opportunity, but it was more trouble then it was worth.

    #36 1 year ago
    Quoted from hocuslocus:

    This is the reason I finally pulled games from one bar, every time I came in there were boxes stacked in front of the cab.
    The floor was always insanely sticky, (I used to sweep and mop (with a fiber towel) the area around the games). The machines were unplugged for one whole week, nobody knew why. Issues were never reported, which sucked because I only came in weekly.
    The management of the place, is just as important as foot traffic.

    A small internet-connected security camera and some wemos are great for checking in remotely. If you see a machine locked up (Iron maiden had lockup issues) on the live feed (viewable on your phone) or with some other issue, you can reboot remotely by turning the Wemo off for that machine then back on. Wemos can be had for $10 or $15. A decent camera is about $50. Well worth it, especially for locations you don't get to often.

    #37 1 year ago
    Quoted from buffaloatx:

    Most locations won't go for a 100/0 split because they are paying the electric bill, and want to see a tiny bit of "profit" from having it on location.

    I was able to get 100% of the revenues. I found a guy who is completely into art and considers pinball machines as art, or at least an attraction for the rest of the extensive art in his shop.

    At this point he realizes that if the machines were removed it would suck a lot of the air out of his store. He is willing to pay the electric bill, but did decide to turn them off at night. For a long time I don't think he did.

    #38 1 year ago
    Quoted from vireland:

    Wemos can be had for $10 or $15.

    Wemos have a security vulnerability that is probably never going to be fixed. They are unsuitable for use on any network with critical data such as credit card transactions. https://www.kb.cert.org/vuls/id/656302

    #39 1 year ago
    Quoted from vireland:

    Looks like you already have some places with recent pins there

    Those pinmap entries are all 3 years old or older. Half the places aren’t there anymore.

    Ypurchin- stop sells mg off your machines and route them if you want locations!

    #40 1 year ago

    Good luck. Hope to stop at some GA locations when we are coming home from Disney.

    #41 1 year ago
    Quoted from Dbaum88:

    I am looking to place a pin or two in some nearby beer halls. I was wondering if anyone could tell me the standard agreement with the establishment for operating a pin? Do I take ALL the money and just give the establishment the convenience of having a pin? Or, do I split the profits in some way and if so, who gets how much? I want it to be profitable but still a draw for the establishment which may be reluctant to do it.
    THANKS!!

    I mean no disrespect but my thoughts are, if you need to ask questions like this, you need to stay away (far far away) from operating pinball machines.

    #42 1 year ago
    Quoted from Bryan_Kelly:

    I mean no disrespect but my thoughts are, if you need to ask questions like this, you need to stay away (far far away) from operating pinball machines.

    I would go to the local office of Brady Distributing (Now part of Player One Amusement Group). They are a true, Route Operator's distributing company. Talk to one of their sales people. They are the best source of information. Alternately, you can call them and they will take a message and have one of their business consultants get back to you.

    #43 1 year ago
    Quoted from ypurchn:

    Hudson grill has closed

    That's another fun risk of routing games.

    Usually the place gets padlocked and you NEVER get your games back.

    The Feds will lock a place down for taxes, the landlord will lock for rent, or some other government entity will close it down for some infraction.

    Even if you are "best friends" with the owner or manager, they will never call and alert you. They have bigger worries than your pins when the lockout happens. They will never answer your calls, because they are embarrassed, and they don't know what happened to your games.

    You call the police, they say it's a civil mater and they have no jurisdiction.

    You call the corporate headquarters and after weeks of runaround you get someone that knows about the closed location. "Yes, we were forced to abandon that property due to unforeseen circumstances. We no longer have any legal right to enter the premises. You might talk to the owners of that property, let me see here, Al Binyiah LLC in Dubai, but, oh, it looks like the property was changing hands and that's why our lease was broken.... "

    You call a local landlord and actually tell him you have two $8,000 pinball machines locked up in the building. He says "I think they cleaned that place out before it got locked." or "I don't know who you are, and honestly, I don't remember any pinball games". Maybe the landlord will agree to meet you next Thursday at 10am. This gives him time to take the games out, now that you've told him they are worth $8,000. You take the day off work, you take you son out of school to help you carry the games. You aim the flashlights around and the games are gone.

    You call the State trying to find someone who will listen that they've locked up your games. After a week of runaround you get a totally disinterested employee who reads you the boilerplate paragraph about unsecured property claims at said location. He tells you that there are always 4 Soda Dispensers owned by Pepsi, 8 Upright coolers owned by Heineken or Bud, Pool tables and coin op darts in every location - that are normally considered abandoned when a property is seized. You press the matter further saying you are not a giant corporation. He tells you you can request a claims hearing in the state capital, three hours away. When you show up that day, it gets postponed a month because some party did not file something somewhere someplace. Your games are auctioned off at some point without you being informed.

    =

    James "King of Cranes" lost a few Crane games when a movie theater chain went out of business and got padlocked.

    8 years latter, a new owner bought the theater, and called James to "Get these things out of my building!".

    The new owner made him take his two cranes but also forced him to take a few pins and a photo booth that were locked out too.

    We joked that the extra machines were interest on the cranes that were not earning.

    #44 1 year ago

    Some very interesting takes here. Great thread.

    #45 1 year ago
    Quoted from YeOldPinPlayer:

    Wemos have a security vulnerability that is probably never going to be fixed. They are unsuitable for use on any network with critical data such as credit card transactions. https://www.kb.cert.org/vuls/id/656302

    That hasn't been updated since 2014, and Belkin has done 3 security updates this year alone.

    But even if some of those still exist, I doubt pinball machines are a problem, and these are hooked to a public network (only) at the locations, so no problems with critical devices.

    #46 1 year ago
    Quoted from Black_Knight:

    Those pinmap entries are all 3 years old or older. Half the places aren’t there anymore.
    Ypurchin- stop sells mg off your machines and route them if you want locations!

    Seems like a good time to update them, then.

    deputy-badge-pinside (resized).jpg
    #48 1 year ago
    Quoted from vid1900:

    That's another fun risk of routing games.
    Usually the place gets padlocked and you NEVER get your games back.
    The Feds will lock a place down for taxes, the landlord will lock for rent, or some other government entity will close it down for some infraction.
    Even if you are "best friends" with the owner or manager, they will never call and alert you. They have bigger worries than your pins when the lockout happens. They will never answer your calls, because they are embarrassed, and they don't know what happened to your games.
    You call the police, they say it's a civil mater and they have no jurisdiction.
    You call the corporate headquarters and after weeks of runaround you get someone that knows about the closed location. "Yes, we were forced to abandon that property due to unforeseen circumstances. We no longer have any legal right to enter the premises. You might talk to the owners of that property, let me see here, Al Binyiah LLC in Dubai, but, oh, it looks like the property was changing hands and that's why our lease was broken.... "
    You call a local landlord and actually tell him you have two $8,000 pinball machines locked up in the building. He says "I think they cleaned that place out before it got locked." or "I don't know who you are, and honestly, I don't remember any pinball games". Maybe the landlord will agree to meet you next Thursday at 10am. This gives him time to take the games out, now that you've told him they are worth $8,000. You take the day off work, you take you son out of school to help you carry the games. You aim the flashlights around and the games are gone.
    You call the State trying to find someone who will listen that they've locked up your games. After a week of runaround you get a totally disinterested employee who reads you the boilerplate paragraph about unsecured property claims at said location. He tells you that there are always 4 Soda Dispensers owned by Pepsi, 8 Upright coolers owned by Heineken or Bud, Pool tables and coin op darts in every location - that are normally considered abandoned when a property is seized. You press the matter further saying you are not a giant corporation. He tells you you can request a claims hearing in the state capital, three hours away. When you show up that day, it gets postponed a month because some party did not file something somewhere someplace. Your games are auctioned off at some point without you being informed.
    =
    James "King of Cranes" lost a few Crane games when a movie theater chain went out of business and got padlocked.
    8 years latter, a new owner bought the theater, and called James to "Get these things out of my building!".
    The new owner made him take his two cranes but also forced him to take a few pins and a photo booth that were locked out too.
    We joked that the extra machines were interest on the cranes that were not earning.

    Let's not forget the $10K loan you, as an operator had to give to the location. It was being paid back from 50% of the cashbox take but still had an unpaid balance when the location got padlocked.

    You'll never get it back.

    Since I've been out of the route racket for so long, the loans are probably $25K these days.

    #49 1 year ago
    Quoted from mcbPalisade:

    I was able to get 100% of the revenues. I found a guy who is completely into art and considers pinball machines as art, or at least an attraction for the rest of the extensive art in his shop.

    As I said, "most" locations won't go for 100%. OP was asking about "standard" location agreements, since there no more real "standard" agreements, go ahead and ask for the moon, if you get shot down, lower your sights and make a deal that you are comfortable with.

    #50 1 year ago
    Quoted from Black_Knight:

    Ypurchin- stop sells mg off your machines and route them if you want locations!

    I’m not at a spot career or family wise where I could take care of route pins. I just wanna get to a spot where I can join a league...

    Looking forward to more pins on route in metro ATL.

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