Most calls about vending get the equipment question right and the payment question wrong. People come in asking about machine size, snack variety, whether to add a healthy lineup. The bigger decision — how employees actually pay for what comes out of the machine — gets answered by default, usually whichever way the previous vendor set it up, sometimes whichever way somebody overheard at a conference.

I've been on the route long enough to see all of them. Paid, subsidized, free, and a couple of variations that don't always fit cleanly into one bucket. The decision matters because it changes what the account is on the hook for, what employees see when they walk up to the machine, and how the operator gets paid. Pick wrong and the line item on the budget either grows faster than expected or the staff complaints don't stop. Pick right and nobody thinks about it again.

This post is for an office manager, an HR lead, or whoever got asked to figure out which vending model fits their company. I'll walk through what each model actually looks like in practice, who it tends to fit, and the question that matters most.

1. The three models in plain language

The textbook version is clean: free, subsidized, paid. The route version is messier, because the labels mean different things depending on who's saying them. Here's how each one shows up in real offices.

Paid (full-price). The standard. Items are priced in the machine, employees pay per purchase — cash, coin, bill, card, or tap — and the account doesn't see an invoice for any of it. The operator sets prices at a reasonable level and the volume justifies the route.

Subsidized. The account covers part of the cost of each item; the employee pays the difference. So if the operator's regular price would normally cover the snack and the route, the account takes a portion of that off the employee's price tag and absorbs it themselves. The operator invoices the company for the difference.

Free. The account pays for 100% of every item that comes out of the machine. Employees use the machine for free; the operator invoices the company for the full retail price of everything dispensed.

There's also a fourth pattern worth mentioning, because you see it in certain settings and it gets confused with the others: a commission model, where the operator pays the location a percentage of gross sales. The economics of that show up in higher prices on every item in the machine — somebody has to fund the commission, and that somebody is the end user. More on that in section 5.

2. Paid (full-price) — the default and the floor

In practice, paid full-price looks like exactly what most people picture when they hear the word "vending." Employee walks up, picks an item, taps a card or feeds in cash or coin or bill, the machine releases it. Done. No invoice to the company. No special arrangement to track. The operator is responsible for stocking, servicing, and pricing, and the prices are set at a level that gets the operator paid and keeps the customer coming back.

What "reasonable" means in practice: a little under what the same item would cost in a convenience store. Less than retail, more than wholesale, and enough margin for the route to actually run. The account benefits because their team gets onsite snacks at a discount compared to walking down the street, plus the convenience of not having to leave the building. The operator benefits because there's no invoicing, no reconciliation, no monthly chase for payment — the machine pays the route directly.

This is the model every one of my own locations runs on. Across the GTA — the factories along the 407 corridor, the warehouses, the trades shops, the smaller professional offices — they're all paid full-price. It's the simplest setup, the cleanest accounting, and the one that's hardest to mess up.

3. Subsidized — the middle ground, done well or done sloppy

Subsidized vending is where the account decides they want to offer their staff a perk that isn't quite "everything's free" but isn't quite "everybody pays full retail" either. The account agrees to absorb part of the cost on each item, and the operator drops the in-machine price by that amount.

The mechanics of how the subsidy actually gets paid back to the operator come in a few flavours, and the one a vendor picks depends on what their machines and back-office can support.

Vend count. Modern vending machines have audit systems built in that track the number of items dispensed. The operator pulls the report, multiplies the vend count by the agreed subsidy per item, and invoices the account for that amount.

Inventory tracking. The operator records what gets loaded into the machine on each service visit, reconciles it against what's left at the next visit, and invoices the account for the agreed subsidy on the items that were taken.

Dollar-amount tracking. Some machines can report total dollars run through them in a given period. The operator and the account agree on what portion of that gross the account covers, and the invoice goes out on that basis.

There's no single "right" way to do it, but there's a wrong way: nobody being on top of the numbers. Subsidized only works when both sides — the operator and whoever in the office is approving the invoice — are organized about tracking, reconciling, and paying on a regular cadence. The mechanic itself is straightforward. The discipline is what trips offices up.

4. Free vending — perk model, and where it actually fits

In a fully free setup, the account agrees to cover the full price of every item that comes out of the machine, and the operator invoices the company on whatever cycle is agreed. Employees use the machine like an open pantry — they tap or push a button and the item comes out. No payment from them at all.

This is the least common of the three, in my experience. Where I see it most often isn't whole-machine free vending — it's a hybrid setup, almost always on coffee. A company will put in a coffee vending machine and tell the operator to set the coffee selection to free, while the rest of the selections — hot chocolate, French vanilla, the more sugary powdered drinks — stay priced at a normal rate. The audit system on the machine tracks the count of free coffee dispensed, and the account gets invoiced for that.

That's the pattern that shows up most: free coffee for the team as a productivity perk, and the rest is paid. It works because coffee is the daily-driver drink, the company gets to say they cover it, and the budget stays predictable because the more expensive specialty drinks are still on the employee.

Fully free vending — all snacks, all pop, all selections, the account pays for everything — is rare on my route. When I do see it, it's in white-collar settings: professional services offices, some corporate environments, places where vending is being positioned as part of the perk stack alongside coffee and snacks at the kitchen. You almost never see fully free vending in factory or trades settings. The volume is too high, the cost adds up too fast, and the per-employee value of the perk dilutes once you cross a certain headcount.

5. How team size and site type push you toward one model

The default for almost every site I run is paid full-price. Factories along the 407 corridor, warehouses, trades shops in Kleinburg, smaller professional offices in Maple and Woodbridge — they're paid. Prices set a little under convenience-store retail, no invoicing to the account, no monthly reconciliation. The employees get a real discount versus leaving the building for a snack, the company doesn't have a line item to manage, and the operator runs the route without a back-and-forth on every invoice.

Where the model shifts: white-collar office settings, especially the bigger ones in Concord and around the VMC subway corridor, will sometimes push toward a hybrid where the coffee is covered by the company and the snacks stay paid. That's the most common variation I see when an account wants to do something more than the default. Larger professional environments along Highway 7 fit the same pattern.

The commission model — where the operator pays the location a percentage of gross — shows up in a different category of accounts entirely. Municipal buildings, public-sector sites, sometimes large institutional settings where the location expects a percentage as a condition of letting the machines in. The way the math works: if the operator owes the location, say, 5% of gross sales, every item in the machine gets priced higher to cover that. The end user is the one funding the commission through the higher per-item price, even though the line on the agreement is between the operator and the location.

So the practical map looks like this. Factory or trades or warehouse: paid full-price, almost always. Smaller professional office: paid full-price, occasionally subsidized if the company wants to offer a perk. Larger white-collar office: paid, with hybrid free coffee as the most common variation, and occasional fully subsidized snack programs. Municipal or institutional: paid, often with the commission model layered underneath.

6. Healthy options — a separate decision from the payment model

One thing I see HR teams conflate is "free vending" and "healthier vending." They get bundled together in the conversation, sometimes because of how the perk gets pitched internally, but they're independent decisions.

The healthy-options question is about the product mix in the machine, not about who pays for it. A paid full-price vending machine can be loaded with protein bars, veggie straw-style chips, lower-sugar options, baked alternatives to fried snacks. A free vending program can be all chocolate bars and pop. The payment model and the product mix are two separate levers.

Where healthy-option demand comes up most: white-collar settings, professional offices, some larger corporate environments. Protein bars are the single most requested item in that category. They cost more at the wholesale level and they cost more in the machine, but in those settings the team is generally comfortable paying a higher price point for the healthier choice. The decision isn't free-versus-paid. It's whether the mix in the machine matches what the team actually wants to buy.

If your team is asking for healthier options, the answer is to change the lineup, not to change who pays.

7. What to ask before you commit

For most offices, the answer is paid full-price. It's the simplest setup, it's how most vending works, the accounting is clean, and the operator's incentive is aligned with the customer's experience because the route lives or dies by how often the machine actually gets used.

If you're considering anything else, these are the questions to answer first.

Why do you want to move off the default? A productivity perk is a different reason than a budget exercise, and the model that fits is different in each case.
Who's going to own the reconciliation? Subsidized and free both require somebody in the office approving and paying invoices on a regular schedule. If there's nobody, default to paid.
What's the team actually asking for? If they want healthier options, that's a product-mix conversation, not a payment-model one.
Is the cashless infrastructure in place? Card and tap readers are standard in office settings now. Coin-only machines limit your options on every model.
What does the volume look like? A small office can absorb free-coffee invoices without much pain. A 200-person factory cannot.

Pick the model that matches the budget, the appetite for invoicing, and the message the company actually wants to send. The default is paid for a reason. Anything else, go in knowing what you're signing up for.