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View Full Version : young person trying to gauge co owners intentions, please help!



JearGunkie
09-24-2015, 10:12 PM
hey all!

i was recently approached by my store manager asking if i would be interested in opening a franchise chain with her and another partner...i have worked my butt off and earned recognition from the higher ups at this franchise. she happened to know that i do have access to some serious funds for a 19 year old.

we get along great at work, and outside of work. and she has never tried anything fishy with me every before. i know my worth and i know i would be ready to co-own a business. solo i would not be doing too well, i can admit that. i simply dont have enough experience to feel comfy on a solo risk like this. but the very first thing that came to mind was "most people dont mess with 19 year olds with this kind of stuff. what if im being played for some funding, and what would the profit cuts look like?"

so i asked a few brief questions, i was told profits would be split up evenly, 1/3 1/3 1/3. i was happy with that.

but i dont feel comfortable asking someone who could be giving me a real shot, if they just need me for money. that seems distasteful to me, especially someone i have a good current relationship with.

1: in all likely hood, from what i have mentioned, am i being used?
2: is this a chance i should jump on ether way?
3: what are some KEY things i should keep my eyes out for during the finalization of the paper work, and any other details?
4: best course of action if i feel like something is sketchy?

thank you guys for reading, being asked to put down this much money on starting a sure fire franchise opportunity is exciting, its stressful, and i need some guidance!

-JG

Debk2
09-24-2015, 11:46 PM
In my opinion the main thing I would suggest is to get everything in writing and have an attorney you trust review it and go over things with you.

Good luck!

Debbie

MyITGuy
09-25-2015, 09:48 AM
so i asked a few brief questions, i was told profits would be split up evenly, 1/3 1/3 1/3. i was happy with that.

Two questions that come to mind are:
-What is the total investment amount (Direct this to your store manager and partner)
-What is the average investment the franchise states is required to open a new store (This should be available on the franchisee website)

If the total investment amount is significantly different then what the franchise states, I would question why
When discussing % splits, make sure that you are getting your fair share of profit (I.E. 33% of profit would be fair if your investing 60K on a 180K total investment), I wouldn't advise accepting a lower % with the claim that they are doing the work...as this gets reimbursed in their salary.

Before signing anything (or giving money), consult/utilize an attorney to formalize the documentation/agreement.

Harold Mansfield
09-25-2015, 12:15 PM
so i asked a few brief questions, i was told profits would be split up evenly, 1/3 1/3 1/3. i was happy with that.


So you're only investing 1/3 ? I agree with the others that you need to consult an attorney and a trusted, educated family member. I know 19 is legally an adult, but most still live at home or depend on a relative. Talk to them.

JearGunkie
09-25-2015, 12:42 PM
So you're only investing 1/3 ? I agree with the others that you need to consult an attorney and a trusted, educated family member. I know 19 is legally an adult, but most still live at home or depend on a relative. Talk to them.

we are talking much more than a 60k contribution.
the FIRST store location would be the #2 location in the state (as of last year '14)
i have two extremely successful family members that said i should go for it with my eyes open.
she knows im smart, and i would be running the store along side her, as the asst manager, and then the SM as she went to the next store. as well as an active co owner, so passives here.

her husband is being...difficult, but that is a different conversation entirely. if she toughens up and finalizes this with me still in mind, ill get my uncle to review it all for me.

the hubby raised a red flag last night, for me, and her, but we will see.

MyITGuy
09-25-2015, 02:18 PM
we are talking much more than a 60k contribution.
...
ill get my uncle to review it all for me.


Please, do more than just having your uncle review it for you. Begin looking for qualified attorneys to assist you with this process as your money/return are in the details and one slip will cost you.

Note: $60K was just used as a reference, however I would be concerned with an amount significantly higher than this as most new franchise locations average between 80K to 300K. Mind sharing the franchise name, or industry/location?

JearGunkie
09-25-2015, 09:36 PM
Please, do more than just having your uncle review it for you. Begin looking for qualified attorneys to assist you with this process as your money/return are in the details and one slip will cost you.

Note: $60K was just used as a reference, however I would be concerned with an amount significantly higher than this as most new franchise locations average between 80K to 300K. Mind sharing the franchise name, or industry/location?

uncle makes in excess of 1m annually, masters in business, had worked his was up many IT companies until he started his own, and he is now doing the more money than he knows what to do with routine. heavily into investing, and markets. this is a man i would pay any amount to look out for me, bu he is doing it for free. cant turn that down. i will certainly take this to an att' too as most of you have stated i should. he told me the same as well.

franchise is a "higher end" fast food of sorts, well known throughout the country, if not a household name.
as to what im ok with saying on location, i have been told and seen the company reports, it is the #2 active store location in the state. we plan on starting with that store and moving to multiples down the line.

edit* current owner is retiring, thus the sale attempts.

Anoura929
12-12-2015, 06:22 AM
I'm young, too. I would just get an attorney and wing it! hahahaha.. you're well spoken I'm sure they know you're too smart to pull anything over you.

Multimediatech
03-14-2016, 03:17 AM
Make sure the articles of incorporation are revised by an attorney.