Auckland-based Vending Technologies has signed its first unconditional master franchise agreement in California, worth more than US$1 million ($1.7 million).
That followed its first Californian franchise sale last week worth US$200,000, the firm said yesterday.
VTL said in May that it had taken longer than expected to get the final tick from California's Board of Corporations that allowed it to start operating.
The company, which sells and licenses vending machine technology, has 30 franchise holders in New Zealand and about 25 in Australia.
VTL executive director John Hotchin said that while the US master franchise deals were covered by confidentiality agreements, each was worth "much more than US$1 million".
"It's quite a milestone for us. What we've seen is that the model has been accepted up there."
VTL machines sell soft drinks, snacks and hot and cold food, with customers including multinational giants Nestle and Schweppes.
"It's really the franchising system, through our technology, that's been accepted at a much faster rate than we thought," Hotchin said.
"Our goal is to be established in every state of the US within three years.
"That would be worth a substantial amount of money to us.
"But we aren't particularly well valued in New Zealand, so as the Americans take note of what we're doing - and we've got a long way to expand in the US - we might end up in different ownership.
"It's unfortunate. New Zealand seems to be the incubator of really good businesses and they don't get the financial support here, and the big companies come along and say, 'We can see the potential, we've got the financial muscle'," he said.
In hindsight, VTL might have bypassed the tough Australian market and gone straight to the US.
"Australia's a pretty sophisticated retail market.
"They don't have the population base ...
"It's very competitive and it's hard to get yourself established.
"In New Zealand if you've got a good idea you can go to someone and they'll say, 'Okay, we'll give you a shot'. In Australia they don't."
The US market was tough but it was also huge: US$35 billion.
VTL posted a 52 per cent drop in annual profit to $2.59 million after a profit warning issued this year, but expected strong growth next year.
The company is changing its financial year from the end of March to the end of June, and by August 25 it will release figures for the 15-month period to June 30.
VTL shares closed yesterday up 3c at $1.10, compared with a year high of $2 and a low of 45c.
- NZPA
Vending firm nibbles into US
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