Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: sunshine windows on January 18, 2017, 01:22:44 pm
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Well, I've finally got a new franchisee lined up to take over my sister in laws francise, no thanks to the bank.
2 candidates both got refused a loan because of bad credit, so it went to the underwriters. The initial application was way back in October .
My brother and I have ended up financing it for one of them, as he's an old friend who I trust to make good on the repayments. Will obviously draw up an agreement just in case.
Was hoping to start 2 at the same time so I could come off the tools completely and focus on round building, but will have to wait until I can find another option of getting the other guy started.
Would have been able to do this straight away off the back of selling a buy to let, but been let down twice by different people who said they were buying it.
Just wanted to get this all of my chest and vent a little. Grrrrrrr, that's better
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Oh the joys of running a franchise business. lol
Think you're taking on a big risk myself if both have been refused finance regardless.
Lance have you rented an office/shop now as seen on tinternet your company name was listed other than your home address?
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Think you're taking on a big risk myself if both have been refused finance regardless.
Massive IMO. Are you going to turn a profit off the finance as well as the franchise?
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So thinking about it a bit more you basically had to buy back your sister in-laws (franchisee) van including kit.
Now going to sell it to your old mate which is unable to get finance himself? Talk about a lot of messing about but fair play to you for giving the chap a chance. I suppose the worst case is if he defaults on your loan agreement and/or franchise agreement then you just take the van, kit and work back of him. Am I right?
Best to just make sure he is properly insured for the van & contents or you could end up right in the crapper should something happen to it. Needless to decent cover when he is working too.
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So thinking about it a bit more you basically had to buy back your sister in-laws (franchisee) van including kit.
Now going to sell it to your old mate which is unable to get finance himself? Talk about a lot of messing about but fair play to you for giving the chap a chance. I suppose the worst case is if he defaults on your loan agreement and/or franchise agreement then you just take the van, kit and work back of him. Am I right?
Yeah but finance isn't and shouldn't be free. If you are financing the deal you why would you not charge for the privilege. The bank certainly would have.
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You can't make profit from financing lol. ;D
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You can't make profit from financing lol. ;D
Eh?
Why not?
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They call it intrest ask any loan shark lol
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This guy gets turned down credit from the bank (probably at 7-8% apr) then given free credit from Lance, don't sound right to me.
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Who mentioned it was going to be an intrest free loan.
The way I would probably do it is take a weekly payment each week agreed for the loan plus % for the franchise fee. At anytime he defaults on payment take the van & kit back straight away no messing.
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This guy gets turned down credit from the bank (probably at 7-8% apr) then given free credit from Lance, don't sound right to me.
I believe you have to be licensed / vetted to be able to make money from lending ?
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Not if it's a private loan between friends you don't.
For how long they remain friends that's another thing as loans between friends can go bad very quickly.
Anyhow I'm sure Lance has thought it through very carefully being the shrewd business man he is.
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Lance if your gonna charge "interest"
Put it down as an "admin fee"
Unless you have had the appropriate checks and license lol.
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Lance if your gonna charge "interest"
Put it down as an "admin fee"
Unless you have had the appropriate checks and license lol.
Why not just leave lending to the banks and concentrate on window cleaning?
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Ok, so without financing my friend, I'm basically back to square one with the amount of work I'm carrying out myself, so the business isn't moving forward. I want to come away from working a regular round and start building the business by growing the franchise side of things.
Bit if a risk, but his situation is complicated. The company he paid an IVA to went bust so he wasn't given the appropriate paperwork to say he's in the clear. He's been fighting this for 2 years to get it cleared and his credit rating isn't that bad at the minute, just he's still not been signed off from having paid an IVA.
I realise I can't legally charge him interest, but there are ways around it to make sure we get 4% on the loan which I think is beneficial to both parties. (He would have paid 8% on a business loan).
He's only currently earning £18k per annum, I'll start him on £30k so he'll easily be able to afford the repayments, even after my 20% he'll be earning £24k, so £6k leeway to pay a loan of around £4K each year for 5 years.
This hasn't factored in growth, that I would expect to have him on at least £40k turnover by the end of this year, and that's being conservative.
He's starting on 1st march and really looking forward to it. He works at a gym as a personal trainer at the minute, so is fit for his age 42
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All sounds good money wise on paper. However as you are funding the loan it might be wise that your new franchisee to work at least a week as a trial beforehand to see if the work suits him or not. Being a fitness trainer don't me jack really as he still might not be able to get on with slapping water about, work in all weathers etc, etc
For your sake I do hope he lasts longer than your last franchisee.
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He's coming out with me on a few of his days off very soon. Hoping all goes well, but I can't see any reason for it not too.
As for duration, I bloody hope so 😩
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Onward and upwards they say. ;)
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Lance many thanks for your help today as I'm sorted now. ;)
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Good to hear! did you go to Preston hydraulics in the end?
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Yes Lance and they stayed open for me too. Tomorrow is not going to be a right off after all as I got all the extra bits I needed.
Many thanks again for you help :)
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You're welcome any time mate.
They're a great bunch of guys in that place. I always use them for fittings, even if sometimes it works out a little more expensive than online. They can get whatever you want in store next day if they haven't already got it in stock.