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View Full Version : Can this business be saved?? Advise needed?


doiing
30th March 2009, 19:36
:|I would really appreciate your opinions and advice on a ridiculous situation!
4 months ago i was approached by a businessman investor from London who had purchased a derelict pub close to where I live in a re-generation area. He and his 2 business partners had renovated the building and intended to turn it into a pizza restaurant downstairs and rent out the two bedroomed flat upstairs. Failing to find anyone to lease the new building in the present climate they approached me, initially asking if I would be interested in running the restaurant for them as they felt it would be easier to sell as a going concern, I was offered a reasonable salary to do this & was asked to put together a business plan for the restaurant that I would have totally autonomy over. I came up with an excellent concept for the business, that should see a turnover in our first year,- and so it was suggested by the businessmen that this should become a partnership. They would invest money in the business to ensure its success, and I (having no cash to invest) should work fulltime, and the profits would be shared 4 ways. Once I was in the building I realised a lot of the building work was incomplete - no electricity upstairs, plumbing incomplete, no guttering & no fire or smoke alarms - therefore part of my business plan could not work - I couldnt rent out the upstairs and no bar licence was possible because there was no bar! I was told not to worry as these things would be completed. When I asked for the agreement of the partnership that I had been promised I was furious to be handed a lease agreement - £1000.00 per month for rent, an initial deposit of £2000.00 in cash, and the profits split 4 ways, bearing in mind - the salary I was initially offered was to come out of the new small business I had setup! I refused to sign the agreement as this was nothing like what was agreed, I would never have taken on such a business in a regeneration area, in the middle of recession having no capital of my own should things not work out, especially given the state of the building! I was told not to worry, just to see how things went with the business and then, if I felt it was working out, we could renegotiate! For the last 3 months I have ran the small business downstairs - I havent heard from my business partners, the work to the building remains unfinished and I have no agreement of any description. Since I told them the business was only just ticking over because the work needed to put my plan in place hasnt been finished, these guys have avoided contact with me. They promise to come and see me or call me back but never do! Without some sort of agreement in place I am vunerable but there was no way i was signing the first agreement - what do I do? Without an agreement they can close me down at anytime! help!!

studentgems
30th March 2009, 20:03
So have you actually signed any sort of agreement with these 'partners'? And have you had to lay out any money? What's to stop you just walking away as you don't think you have a viable proposition? You say you are vulnerable, why is that?

Pemdebtcollection
30th March 2009, 20:11
Looks simple to me
Your investors appear to have no cash to do up the building and you dont have any cash to put in to buy a share. You saw an op but was not shrewd enough to cover yourself before doing three months graft.

looks like a lot of great ideas with er no cash, I would learn from this one and get out. FYI never be afraid to get an agreement drawn up and fully checked out by a solicitor, signed and witnessed at the START of any venture.

www.pembrokecommercial.com

doiing
30th March 2009, 20:29
So have you actually signed any sort of agreement with these 'partners'? And have you had to lay out any money? What's to stop you just walking away as you don't think you have a viable proposition? You say you are vulnerable, why is that?

Thanks for your reply! - No, there is no agreement - I am vulnerable because I have worked to build up a business that I now have no claim on if they choose to sell the building, or even worse have repossessed!

ginantonic
30th March 2009, 20:53
So I take it you are not paying any rent, council tax or utility bills? Or if you're not, who is?

Stephen Berry
30th March 2009, 21:29
This looks to me as a classic 'walk away' moment.
No trust or commitment between 'partners' - it sounds doomed - walk away now.

stevon
31st March 2009, 07:25
Your priorities are admirable, but I feel perhaps misguided...

I take it you enjoy running this shop and want to make it a success? That's the impression I got and first and foremost I'm glad to see that - congratulations.

However, your problems with the other partners, right? From what I can see, you hold all the cards. You're the man in charge. They own the building but you're running the business and most importantly, taking the cash off the customers.

If they refuse to talk to you - don't pay the rent. I bet you get a call then. I had this problem with a landlord once - he wouldn't return my calls about fixing something in the flat... I called him three times and left messages. When rent day rolled around, I didn't pay. I got a call the next day asking where my rent was and he was told he'd get it as soon as my heating was fixed. The heating was fixed the day after. He got his rent a week later - he couldn't get ahold of me on the phone, funnily enough.

You hold the cards because you're the one taking in the money - just don't give them a penny until they talk to you and you work out your differences... Otherwise this business is most certainly doomed. Get a written agreement that you're happy with before doing anything else, I'd even shut down the shop until they've spoken to you (I assume you don't want to do that though). Mind and keep the money though, don't spend it or anything!

Good luck, I hope that everything works out for you. Keep us updated.

doiing
1st April 2009, 10:49
Your priorities are admirable, but I feel perhaps misguided...

I take it you enjoy running this shop and want to make it a success? That's the impression I got and first and foremost I'm glad to see that - congratulations.

However, your problems with the other partners, right? From what I can see, you hold all the cards. You're the man in charge. They own the building but you're running the business and most importantly, taking the cash off the customers.

If they refuse to talk to you - don't pay the rent. I bet you get a call then. I had this problem with a landlord once - he wouldn't return my calls about fixing something in the flat... I called him three times and left messages. When rent day rolled around, I didn't pay. I got a call the next day asking where my rent was and he was told he'd get it as soon as my heating was fixed. The heating was fixed the day after. He got his rent a week later - he couldn't get ahold of me on the phone, funnily enough.

You hold the cards because you're the one taking in the money - just don't give them a penny until they talk to you and you work out your differences... Otherwise this business is most certainly doomed. Get a written agreement that you're happy with before doing anything else, I'd even shut down the shop until they've spoken to you (I assume you don't want to do that though). Mind and keep the money though, don't spend it or anything!

Good luck, I hope that everything works out for you. Keep us updated.

Thank you so much for that, Im working so hard and things are going very well - I feel that my only option is to walk away! I am so angry with myself for not insisting all the T's were crossed to start with - but then I see so little of them that I just got in with the job in hand! I'm happy to re-negotiate if only they would get in touch - its the uncertainy that worries me and is beginning to get me down!

Pemdebtcollection
1st April 2009, 11:06
I would ignore the keep the cash advise, misappropreation comes to mind, you do not own the building you take cash and pocket it you could be dragged in for theft.

Go See a solicitor and cover yourself you are NOT a shrewd experianced business minded person, whats to say the people who own the building are not reading this thread.

Get a solicitor its the best advise you will get on here I kid you not

stevon
2nd April 2009, 10:57
I have to agree with the solicitor comment - that's the booksmart thing to do.

What I'm suggesting is risky/immoral/whatever, but I reckon it'd work. I wouldn't "steal" the money, I'd just keep it all in the safe in the shop or whatever and "forget" to pay my rent... That way if they went down the law route at least you could play the whole "oops I forgot" card and produce the cash instantly, but I'd imagine that they'd at least call you before calling the cops over something like that. It'd probably be a civil matter anyway...

Where are you based out of interest? I've been wanting to invest in a takeaway for some time but would probably want someone to run it; you seem to know what you're doing - drop me a PM if you're interested, could maybe work something out...

JustOneUK
2nd April 2009, 11:26
I would walk away. I see NO long term plan as these seem hardly the kind of people you'd WANT to be a partner with. At most you might aswell just be a standard employee otherwise I can picture you get stung with a major financial responsibility out of the blue.

Out of interest..
Who's buying the stock, are you taking a wage?

James.

new2bus
2nd April 2009, 13:43
£1000.00 per month for rent, an initial deposit of £2000.00 in cash, and the profits split 4 ways.


Either this is a very small business or you are being asked to pay only a quarter of the rent.

Can you clarify what your 3 partners are inputting into the venture?

MH1
2nd April 2009, 16:29
Don't walk away.......RUN.

tom111
2nd April 2009, 16:56
I would go to a solicitor, get an agreement you are happy with drafted, and offer it to them. If they refuse it, then walk away.