September 23, 2014

Franchise Machines: DVD Kiosks, ATMs, Photo Booths, Vending

It’s 7:00 PM on a Friday night. You’ve been flicking from channel to channel on your 46-inch 3D LED HDTV for the better part of 20 minutes, and as usual, nothing is on.  You aren’t asking for much; after a long week at work, you just want to kick back, relax, and maybe watch a movie….

Red Box Movie Rental Kiosk

Then it hits you; you remember seeing a movie kiosk in front of the grocery store that you frequent.  So you jump in your car, and a mere 10 minutes later, you’re stretched out on the couch, enjoying a newly released movie.

You’ve just purchased 2 hours of chill time for $3.50 … from a machine.

Be The Machine

On the way back from that DVD movie kiosk, did it occur to you that it may be kind of cool to own one or two of these kiosks yourself? After all, you’re probably not the only person in your area who is looking for a fast, convenient way to watch recent movies, right? Plus, it can’t be too difficult to run an automated little business.

Let’s look at the pros and cons of being the owner of an automated business:

The Pros

Low start-up costs:  The major player in the DVD kiosk industry is DVDNow, an outfit out of Canada. From their website: “You can be in your own business in less than 45 days for under $25K.” That puts the business on the lower end of the investment range for a franchise business.

It’s not a franchise:  DVDNow is a business opportunity, not a franchise opportunity. Business opportunities offer a degree of flexibility that won’t usually be found in the mostly-rigid franchise business model. In addition, the laws are different for business opportunities.  That translates into a much simpler contract than you would have to sign to become an owner (2-3 pages vs. 25+ pages for a franchise business contract). Finally, there are no ongoing royalties; you won’t have to pay a percentage of your gross sales to corporate every month, since it’s not a franchise business.

Flexibility:  You can keep your job. That’s right; you can keep a full-time job while you launch this part-time business. Once the kiosk is installed, all you really have to keep it stocked, and collect the money.

The Cons

Name brand competition:  Have you ever heard of Netflix? While they’ve had their share of problems, and pundits feel that the Netflix mail-order system will soon become passé, not having to leave the house to pick up a movie is really convenient.

It’s not a franchise:  One advantage of the franchise business model is what I call “tightness.” Franchisees buy into a very tight and proven business operating system that includes things like detailed operations manuals, specific marketing plans, grand opening assistance, and dedicated corporate support. It’s a cookie-cutter model, and it’s been proven to work.

The location:  While companies like DVDNow offer location assistance, (for a fee) in the kiosk business, it really does come down to location. A great location = great revenue.  A poor choice equals disaster.

Other Machines:  DVD rental kiosks aren’t the only automatic money machines currently being offered to franchise and business opportunity seekers. Low-cost businesses are always popular, especially in an unsure economy like the one we’re in now.

Mike Handelsman, the Group General Manager for BizBuySell.com told me that a lot of the unemployed have a lot less capital to invest in entrepreneurial ventures these days;

“Their savings accounts have been depleted and they have less equity in their homes. Also, capital loans continue to be difficult to get, so low-cost ventures are definitely attractive.”

Here are some examples of other low-cost franchise and business opportunities:

ACFN:  franchisees of this electronic financial services company have placed over 1600 ATM’s in hotels, hospitals, museums, sports venues, and restaurants. ATM’s really are money machines, and this is another opportunity to keep your job while you start your own business.

Fresh Healthy Vending:  healthy drinks, snacks, and organic coffee are the products featured in attractive and cashless vending machines that franchisees place in health clubs, corporate offices, hospitals and even schools. Today’s consumers are looking for non-junk-food types of snacks and beverages; this young franchisor provides 500 different products for its franchisees to offer.

Mojo Photo Booths:  the company website states they offer: “The only commercial-grade photo booth on the market that offers a true turn-key business with one-person portability and operation.” The booths fit up to 10 people, and owners bring them to corporate events, parties, and weddings. The photos are printed instantly, and can be customized on the spot.

There are lots of low-investment franchise and even non-franchise opportunities available these days. Savvy entrepreneurs are marrying their ideas to the latest technologies to provide what some of the “be your own boss” crowd seems to want these days; low-cost, part-time automatic businesses.

Did I miss any of them?


Red Box Photo via Shutterstock

11 Comments ▼

Joel Libava - Franchise Expert


Joel Libava Joel Libava is the Franchise Expert for Small Business Trends. Joel, The Franchise King®, equips today’s prospective franchise owners with time-tested, proven techniques designed to increase odds of success. He does this through one-on-one coaching, and gobs of useful content that can be found on places like Small Business Trends, SBA.Gov, and his award-winning franchise blog, The Franchise King Blog . He’s been featured in Entrepreneur® magazine, and is frequently called upon by national media outlets and publications for his no-spin insights into the world of franchising.

11 Reactions

  1. Great lead paragraph, Joel! It hooked me and I was eager to read the whole post. And i learned a lot in the process. Didn’t realize there were others besides RedBox doing the automated video rental. Wow.

    • Thanks. TJ!

      And, I’m so happy that you didn’t stop at the lead paragraph.

      Pretty cool, huh? The marriage of convenience and technology.

      And, possibly a low-cost business to start while one is still working.

      Possibly.

      The Franchise King®

  2. Pretty cool vending machine.

    Thanks for providing info on the pros and cons. :)

  3. I’d just like to point out that your local library has first-run movies available for check-out at no charge, and often you can keep them longer than you can keep rented DVDs. True, it requires a little bit of planning, but that could be offset by the no-cost and longer check-out time.

    This was a great post, and in fact it caught my eye because my library has been considering a vending-machine format for both DVDs and books.

    • Thanks for reading my post beth, and also for sharing the fact that public libraries are still great places with great resources.

      I wonder of any of the DVDNow dealers, (remember, they’re not franchisees) have approached the libraries in their local areas.

      Could be an opportunity!

      The Franchise King®

  4. Thanks for the heads up. I didn’t know these things existed before I checked out this post. :)

  5. I cannot find the link that leads to registering or enquiring about this business opportunity. How does one proceed to the next step?

  6. Hi Omar,

    I found a link for DVD machine business opportunities.

    I’m not endorsing it; I’m just providing it for you because you requested it.

    This- http://www.dvdnowkiosks.com/

    The Franchise King®

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