Help not sure what to do

[littlelaura]

Hi, I've worked for someone for 9yrs as a dog groomer then I went self employed & rented a table off her the last year. She's always said when she wants to give it up the job she would transfer the lease to me. Now she's wanting to give it up in October when the lease runs out & mentioned this to the landlord & also asked would it be OK for me to take on the lease, which he said that's fine for me to take it on but she has to sell me the business, can't jst transfer lease.

Now my question is does she have to sell me the business for her to pass the lease to me when it's expired & she's leaving?

Thanks

 

[MBE2017]

The simple answer is no.

If the lease is expiring, then the landlord can easily give you a lease. It just might be your former employer hopes to get some money off you, did she tell you this or the landlord?

Bear in mind once you take the lease on you will have extra costs, you will be paying for the whole premises, rates, utilities. The last one is worth considering, the discounted utility rate for businesses end this April, the Gov might come up with some help but there is no definite plan as of yet.

 

[japancool]

Is the business a limited company?

 

[kulture]

This is slightly confusing. If the lease is expiring, why would the landlord have a problem issuing a new lease to a new person? How do you take over an expiring lease? One suggestion, as said above, is that the business owner now wants some money. Alternatively the lease is in the name of a limited company and the landlord just wants this lease to carry on.

Get a solicitor involved. This could be a simple transaction or a complete nightmare.

 

[littlelaura]

The simple answer is no.

If the lease is expiring, then the landlord can easily give you a lease. It just might be your former employer hopes to get some money off you, did she tell you this or the landlord?

Bear in mind once you take the lease on you will have extra costs, you will be paying for the whole premises, rates, utilities. The last one is worth considering, the discounted utility rate for businesses end this April, the Gov might come up with some help but there is no definite plan as of yet.

Yeah I know once I take on the lease all the utilities & anything to do with shop/business is my responsibility.

She originally said she would just put lease in my name once the lease had run out but is now saying that the landlord said she can't just do that, she would have to sell me the business before putting lease in my name, so is wanting £10,000 off me for business.

I always thought if the lease had ran out then someone else can take over & have new name on lease but there saying I have to buy the business first.

Thanks

 

[BubbaWY]

She originally said she would just put lease in my name once the lease had run out but is now saying that the landlord said she can't just do that, she would have to sell me the business before putting lease in my name, so is wanting £10,000 off me for business.

Sounds like she is trying it on.

If I was you, I would try speak to the landlord direct and express your interest in taking on the property when the existing lease expires.

 

[littlelaura]

Is the business a limited company?

No sole trader

 

[WaveJumper]

The simplest advice is as mentioned above ......... please please get some legal advice NOW before you do anything else, do not rush into this, or be pressured.

And dare I suggest you might think transferring the business to another premises a better option, like your own garden as one suggestion.

 

[Mark T Jones]

Sounds very much like she's having a bubble at your expense.

What would you actually be buying for £10K?

What is this particular location worth to you?

 

[MBE2017]

She is trying to scam you IMO, ask for the landlords details if you don’t know them, talk to him and check this out, and don’t forget there are thousands of empty rental shops/units around. £10k would pay for a lot of rent. Obviously she might be offering valuable equipment, and thousands of existing bookings, but I doubt it.

Make a list of what you would really need and price it up, it doesn’t have to be new, just reliable and presentable. A brand new adjustable dog table is selling from £260 -£750 atm, but what would your old boss do with hers? You could make an offer, like £50.

Another option if you can drive is to offer a mobile service, your biggest problem going forward is high costs and a potential deep recession, do not expect things to continue as before, take nothing for granted, so saving £10k at the start would be a huge help to yourself.

 

[Lisa Thomas]

There are usually two options when it comes to leases.

1. An existing lease can be assigned to a new party, with the landlord's consent. That tends to happen when there has been a sale of the business.

2. The landlord can issue a new lease once the old one has been 'dealt with'.

Here, the old lease is coming to an end in October. Unless you want to buy the business off her, before then and have the lease assigned, I cannot see any reason why you wouldn't just wait it out and negotiate a new lease to start with the landlord from November.

Before you do this you need to be absolutlely certain the business can be successful and can wash its face.

The landlord may want a personal guarantee from you, assuming you're a Limited Company. This means if things don't work out you will be expected to continue paying the rent personally until the lease has been dealt with, which could be a big liability, along with all the other liabilities and expenses that come with running your own business.

 

[Lisa Thomas]

She is trying to scam you IMO, ask for the landlords details if you don’t know them, talk to him and check this out, and don’t forget there are thousands of empty rental shops/units around. £10k would pay for a lot of rent. Obviously she might be offering valuable equipment, and thousands of existing bookings, but I doubt it.

Make a list of what you would really need and price it up, it doesn’t have to be new, just reliable and presentable. A brand new adjustable dog table is selling from £260 -£750 atm, but what would your old boss do with hers? You could make an offer, like £50.

Another option if you can drive is to offer a mobile service, your biggest problem going forward is high costs and a potential deep recession, do not expect things to continue as before, take nothing for granted, so saving £10k at the start would be a huge help to yourself.

Good point - I would think a mobile vehicle could be a better investment.

 

[IanSuth]

And when talking leases beware of personal guarantees - they work to shift the liability from your company to you (assuming you actually set up a ltd and don't run as a sole trader like the current person)

 

[littlelaura]

Is the business a limited company?

No sole trader

 

[cjd]

It's not unreasonable for the owner of the business to ask for something in return for handing over the entire business to you, in fact, it would be strange for a going concern to be just given away wouldn't it?

You'd be paying for the brand and goodwill - including phone numbers and location, customer base, equipment, and a high degree of certainty about running a successful business at the same property.

Or you could tough it out until the lease expires a hope for what you can get for nothing.

Either way, you need a commercial solicitor to advise.

 

[Ozzy]

I've collated all, in my opinion, are the best soundbites from the advice above @littlelaura

The simple answer is no.

If the lease is expiring, then the landlord can easily give you a lease. It just might be your former employer hopes to get some money off you, did she tell you this or the landlord?

If I was you, I would try speak to the landlord direct and express your interest in taking on the property when the existing lease expires.

The simplest advice is as mentioned above ......... please please get some legal advice NOW before you do anything else, do not rush into this, or be pressured.

Another option if you can drive is to offer a mobile service, your biggest problem going forward is high costs and a potential deep recession, do not expect things to continue as before, take nothing for granted, so saving £10k at the start would be a huge help to yourself.

Here, the old lease is coming to an end in October. Unless you want to buy the business off her, before then and have the lease assigned, I cannot see any reason why you wouldn't just wait it out and negotiate a new lease to start with the landlord from November.

Before you do this you need to be absolutlely certain the business can be successful and can wash its face.

Personally, I would recommend not taking on a lease and go mobile or work from home if you can. It's the safest option to build you own brand and clientbase when we have a very uncertain next months or year or so coming up, starting with a chain around your neck (lease) could be more than your new fledging business could handle.

My other string personal advice is don't buy the business, perhaps even calling their bluff may go in our favour.

 

[MBE2017]

It's not unreasonable for the owner of the business to ask for something in return for handing over the entire business to you, in fact, it would be strange for a going concern to be just given away wouldn't it?

You'd be paying for the brand and goodwill - including phone numbers and location, customer base, equipment, and a high degree of certainty about running a successful business at the same property.

Or you could tough it out until the lease expires a hope for what you can get for nothing.

Either way, you need a commercial solicitor to advise.

I agree it is not unreasonable to ask for something when selling a business, but the OP was told the owner would transfer the lease, which is very different to buying the business.

 

[Newchodge]

I agree it is not unreasonable to ask for something when selling a business, but the OP was told the owner would transfer the lease, which is very different to buying the business.

That rather depends if there is anything to sell. Physical equipment, perhaps. In this case the 'buyer' already works on the premises, presumably with their own customer list. Would it be necessary then to buy goodwill and a customer list?

 

[littlelaura]

Hi thank you so much for all your advice so far. Here's more info incase this helps.

The agreement between us for 9yrs is that she would transfer the lease to me when it runs out & shes leaving, as she said she would prefer me as I know the customers & they know me, but now she wants me to buy the business off her instead.

If I went & bought the tables, equipment, bath ect it would probably cost me about £2000, I know custom base is also what I would be paying for as it is a well established shop & she probably wouldn't let me take half of my customers with me if I got a other shop as I made them there.

Where sole traders not a limited company.

She said I can speak with landlord when he's back in are area for him to tell me the same as she has.

As I said the shop is well established with a great reputation, rent is also low amonth & is only round the corner from my house.

I know it's understandable for her to want to sell her business but am unsure if it's worth that. Also she wanting me to let her know by June coz if am not taking it she'll sell to someone else for 10-15k. So then I couldnt take lease through landlord without buying business off her 1st.

I can't get a vehicle to work from as I don't drive.

I know it would cost me about £2000 for everything I need to work with & if I rented a different shop I'd be responsible for rent, lecky, water, insurance, phone line, bin man & small business rates, does anyone know if I would have to pay council a amount of money to start up?

 

[IanSuth]

I know it's understandable for her to want to sell her business but am unsure if it's worth that. Also she wanting me to let her know by June coz if am not taking it she'll sell to someone else for 10-15k. So then I couldnt take lease through landlord without buying business off her 1st.

Remember it is worth LESS to someone else as you will likely walk (or they have to assume you will) with all of your regulars leaving them to set up from scratch.

I know you are likely fiends with this lady but try and put that to one side and be dispassionate - think of it this way. If she kicked you out tomorrow and the shop was suddenly being run by someone you don't know who was looking to get out which would leave them with no business (as just them running it) what would you be prepared to pay to ensure even with a dip in business and a rise in interest rates and utility bills it washed it's face and paid you a decent wage.

 

[Newchodge]

Hi thank you so much for all your advice so far. Here's more info incase this helps.

The agreement between us for 9yrs is that she would transfer the lease to me when it runs out & shes leaving, as she said she would prefer me as I know the customers & they know me, but now she wants me to buy the business off her instead.

If I went & bought the tables, equipment, bath ect it would probably cost me about £2000, I know custom base is also what I would be paying for as it is a well established shop & she probably wouldn't let me take half of my customers with me if I got a other shop as I made them there.

Where sole traders not a limited company.

She said I can speak with landlord when he's back in are area for him to tell me the same as she has.

As I said the shop is well established with a great reputation, rent is also low amonth & is only round the corner from my house.

I know it's understandable for her to want to sell her business but am unsure if it's worth that. Also she wanting me to let her know by June coz if am not taking it she'll sell to someone else for 10-15k. So then I couldnt take lease through landlord without buying business off her 1st.

I can't get a vehicle to work from as I don't drive.

I know it would cost me about £2000 for everything I need to work with & if I rented a different shop I'd be responsible for rent, lecky, water, insurance, phone line, bin man & small business rates, does anyone know if I would have to pay council a amount of money to start up?

I think there are a couple of things you should think about.

The agreement between us for 9yrs is that she would transfer the lease to me when it runs out & shes leaving, as she said she would prefer me as I know the customers & they know me, but now she wants me to buy the business off her instead.

It is a shame she has changed her mind, but, unfortunately that happens. You need, for a bit, to forger her promises and think about what is on offer.

If I went & bought the tables, equipment, bath ect it would probably cost me about £2000, I know custom base is also what I would be paying for as it is a well established shop & she probably wouldn't let me take half of my customers with me if I got a other shop as I made them there.

She has abasolutely no right to prevent you doing anything about your customers unless there is a legally binding written agreement. If there is an agreement there are people on here who can have a look and let you know what the implications are.

Also she wanting me to let her know by June coz if am not taking it she'll sell to someone else for 10-15k. So then I couldnt take lease through landlord without buying business off her 1st.

She may wish to sell it to someone else for 10-15K. She would have to find a very gullible buyer. If there is no other buyer the lease will end and the landlord willl have to look for a tenant. Naturally the landlord would rather not to have to do that, but there is no guarantee that the rent will stay the same, whether you buy the business or negotiate a new lease with the landlord.

I would sit down and do some sums. You don't have to pay the council anything to set up, unless a dog grooming business has to be licensed. I am fairly sure it does not. You will have to pay all the things you mentioned. I would imagine you would need to find eithe an employee or someone to take the same role as you, otherwise your only income will be from your own clients, with much higher outgoings.

Once you have done your sums you could make her an offer. perhaps £3,000 - £500 for the second hand value of the equipment and the rest for 'the business'. But, please, make sure you do the sums first. if you need any help with that you can get help here.

 

[MBE2017]

If you have been renting a table and working as self employed, they are YOUR clients already.

Work out the figures and see if they work, ask her for three years accounts to see how well she is doing, and base any offer on the figures and nothing more. If you like the location and the site, allow for a percentage of HER clients possibly deserting you on a buy out. You might feel it worth making an offer, but always bear in mind how much would it cost to start on your own and don’t over pay.

She might want £10k with an answer by whenever, you can always increase your offer, but you cannot go down. I would make any offer contingent on hearing by a certain date as well, plus go through an independent solicitor working for yourself. They could save you a fortune.

 

[kulture]

I agree with all the above regarding doing your sums and making a lower offer IF the sums add up. What I will add to the above is that the business is WORTHLESS if the Landlord does not provide a new lease. You could end up with equipment and no property. You need to talk to the Landlord and include themin any deal. You need to know and agree the new rent and include that in any calculation. The current business is UNSELLABLE with no lease and no certainty over a lease and rent.

 

[Ozzy]

You need to talk to the Landlord and include themin any deal. You need to know and agree the new rent and include that in any calculation. The current business is UNSELLABLE with no lease and no certainty over a lease and rent.

Worth keeping this in mind @littlelaura because the landlord is likely under no obligation to renew the lease to the current business (the person who wants to sell you their business), and the landlord may well prefer to start a new lease with you anyway under new terms.
So you could buy the business and then find the landlord says goodbye and moves someone new into the property if that's what he wants to do.

 

[japancool]

I know it's understandable for her to want to sell her business but am unsure if it's worth that.

As she's a sole trader, there's no "business" to sell per se, so I'm not sure what the landlord is on about, You'd be buying the assets. It's up to you to decide whether it's worth it, but factor in the cost of fitting out if you buy tables/chairs and whatnot from elsewhere.
0
Since the lease is coming to an end, I fail to see what the landlord is expecting. As sole traders, he would have to agree a new lease with a new legal entity anyway (i.e. you).

 

[The Byre]

Please do not do anything. The coming months and years are going to see some very profound economic changes and probably not particularly good changes at that! It could be that come October, the High Street will be littered with empty shops. Commercial rents are under a great deal of downward pressure already.

Many businesses will fail and now is the worst time (IMO) for anyone to be making long-term commitments such as signing a nine-year lease!

I would like to be optimistic and for the long run, I am indeed extremely optimistic - but the next few years are going to be a time to weather the storm and come out the other side fit and ready for new boom years.

 

[HFE Signs]

The lease is coming to an end for the existing business and therefore it is available for negotiation by you with nothing to do with the existing business. Sounds to me like she is trying to get some money for the goodwill (clients that will naturally come to you).

What's to stop you moving to new premises and doing it independently?

 

[Clodbuster]

I went self employed & rented a table off her

The customer base is already yours besides a customer base is of no value. It sounds like she is now playing hard ball so don't feel obliged to pander to her, business is business and must not be mixed up with friendship.

 

[WaveJumper]

Hi thank you so much for all your advice so far. Here's more info incase this helps.

The agreement between us for 9yrs is that she would transfer the lease to me when it runs out & shes leaving, as she said she would prefer me as I know the customers & they know me, but now she wants me to buy the business off her instead.

If I went & bought the tables, equipment, bath ect it would probably cost me about £2000, I know custom base is also what I would be paying for as it is a well established shop & she probably wouldn't let me take half of my customers with me if I got a other shop as I made them there.

Where sole traders not a limited company.

She said I can speak with landlord when he's back in are area for him to tell me the same as she has.

As I said the shop is well established with a great reputation, rent is also low amonth & is only round the corner from my house.

I know it's understandable for her to want to sell her business but am unsure if it's worth that. Also she wanting me to let her know by June coz if am not taking it she'll sell to someone else for 10-15k. So then I couldnt take lease through landlord without buying business off her 1st.

I can't get a vehicle to work from as I don't drive.

I know it would cost me about £2000 for everything I need to work with & if I rented a different shop I'd be responsible for rent, lecky, water, insurance, phone line, bin man & small business rates, does anyone know if I would have to pay council a amount of money to start up?

Lets be clear here (barring all the good advice above) the lease is coming to an end, she is not going to renew it as she's leaving the business, unless of course she is going to renew it keep on working and hope someone is going to come along and buy the business. Which reading between the lines she does not want to do and has this hope you are going to fall for the "buy it off me" she won't have a lease to sell when it runs out and if you decided to take it on it would be for you to negotiate with the landlord for your own terms ......but of course before you did this you would follow my previous advice and get proper legal assistance so you fully understand the finacial commitment you would be making.

I also agree with the above taking on a lease and the liabilities that go with it certainly is a massive risk in the current climate and I would recommend the looking at working from home option (my wife's best friend does this and makes a great living out of it) or as also suggested go mobile.

 

[HFE Signs]

The business has very little or no value to anyone else, you are her only option to sell, if you really want to buy it I wouldn't pay anything over the value of the assets - that might be enough to make her happy anyway, her other option is to walk away with nothing.

 

[littlelaura]

I worked for her employed for 9yrs & made my customers through her shop before I became self employed renting a table off her in the last year, so she classes as my customers being the shops, I know alot of them would try follow me if they had contact info for me, which I'm going to start passing out to them now.

Between us both we bring in about £1100-£1600 aweek depending, but then as someone has said it would only be me working so I'd only be bringing in between £600-£800 a week.

The landlord said he'd be happy for me to take over lease as he's known me so long but hes telling her she has to sell the business or she's losing out.

Any fitting of bath or decorating ect would be free as my boyfriend & dad can do it all so that cost isn't a worry.

I know I've got a lot to think about & also need to arrange to see landlord & ask what he's meaning by what he's said to her.

 

[littlelaura]

I worked for her employed for 9yrs & made my customers through her shop before I became self employed renting a table off her in the last year, so she classes as my customers being the shops, I know alot of them would try follow me if they had contact info for me, which I'm going to start passing out to them now.

Between us both we bring in about £1100-£1600 aweek depending, but then as someone has said it would only be me working so I'd only be bringing in between £600-£800 a week.

The landlord said he'd be happy for me to take over lease as he's known me so long but hes telling her she has to sell the business or she's losing out.

Any fitting of bath or decorating ect would be free as my boyfriend & dad can do it all so that cost isn't a worry.

I know I've got a lot to think about & also need to arrange to see landlord & ask what he's meaning by what he's said to her.

Also there is nothing saying I can't take my own customers, I only have a contract stating what date I started self employed & how much I pay weekly on table

 

[kulture]

Beware of doing this work at your home. Being mobile and going to your customers home is fine. Around here there is a very busy mobile dog groomer who parks at the customer home and grooming the dogs in the van so no mess in the customers home.

Bringing customers and dogs who may bark, to your home may well cause your neighbours to complain and get the council involved.

If there is enough business for two groomers at the property, then would you be able to find a second person, whom you can trust, to share the work? If the income is halved by just having one groomer, then can you sensibly afford the property? It may be that having a detailed conversation with your friend going through ALL the figures. it may well become apparent to both of you that this does not add up, especially with an initial purchase price. That way it makes it easier to say no, or to agree a different way forward with your friend.

It is important to keep this businesslike, and professional, but if she really IS your friend then she will see where you are coming from. It would be nice if you could help each other sensibly, but you must put yourself first.

 

[littlelaura]

Beware of doing this work at your home. Being mobile and going to your customers home is fine. Around here there is a very busy mobile dog groomer who parks at the customer home and grooming the dogs in the van so no mess in the customers home.

Bringing customers and dogs who may bark, to your home may well cause your neighbours to complain and get the council involved.

If there is enough business for two groomers at the property, then would you be able to find a second person, whom you can trust, to share the work? If the income is halved by just having one groomer, then can you sensibly afford the property? It may be that having a detailed conversation with your friend going through ALL the figures. it may well become apparent to both of you that this does not add up, especially with an initial purchase price. That way it makes it easier to say no, or to agree a different way forward with your friend.

It is important to keep this businesslike, and professional, but if she really IS your friend then she will see where you are coming from. It would be nice if you could help each other sensibly, but you must put yourself first.

My house isn't suitable to do it from home & I have my own 2 dogs to think about & they wouldn't like strange dogs coming into were they live.
I also couldn't do mobile as I don't drive.
I have thought about getting someone else to work with but that would be a later in future thing as I would have to find someone as you say that I could trust, I'd have to like how they handled the dogs & like there work, also find someone who I could work with daily

 

[MBE2017]

I worked for her employed for 9yrs & made my customers through her shop before I became self employed renting a table off her in the last year, so she classes as my customers being the shops, I know alot of them would try follow me if they had contact info for me, which I'm going to start passing out to them now.


I know I've got a lot to think about & also need to arrange to see landlord & ask what he's meaning by what he's said to her.

It doesn’t matter what she thinks, you are self employed, you rent the table, they are your clients.

As for the landlord, if you WANT the premises, just discuss the potential lease, and ensure a solicitor checks the lease out BEFORE you sign anything. Never fall for the friendly landlord act, he is in business as well, get things in writing, and learning from another thread on here, get a report on the condition of the building is in, you will be expected to hand it back in at least as good a condition.

If work needs doing to bring the premises up to spec you have a potential negotiation tool, some rent free period for instance.

 

[japancool]

Is the unit next door available?

 

[littlelaura]

Is the unit next door available?

No there is no empty shops avaliable on that road at the min & I've looked into other shops in area & am finding it difficult to find what am after at a reasonable price

 

[Socio South West]

@littlelaura Be very careful with the property dilapidation clauses in the lease - Current leaseholder could hand you a property in need of a lot of remedial work if you literally take over the lease.

The current lease needs to end, with any dilapidations charged to the current leaseholder, and rectified before the lease that you will have begins. A good surveyor who can understand a lease will be worth his weight in gold at this time.

 

[Duke Fame]

@littlelaura Be very careful with the property dilapidation clauses in the lease - Current leaseholder could hand you a property in need of a lot of remedial work if you literally take over the lease.

The current lease needs to end, with any dilapidations charged to the current leaseholder, and rectified before the lease that you will have begins. A good surveyor who can understand a lease will be worth his weight in gold at this time.

Very good point, also do not sign a PG. Dilapidations are known as the landlords's pension and letting agents can be utter sharks

 

[Carbtec]

Some good advice here littlelaura & some that's frankly diabolical.

My groomer is 3yrs into her own parlour from scratch & hasn't looked back once. I think you already know that you're going solo & I think all your worries can & should be narrowed down to just that lease !

Concentrate on the lease & don't let the internets confuse you about your future career as a groomer. Please take advice from a professional BEFORE you make your decision, you will make many mistakes in business but making a mistake on the lease on the premises can be fatal to any future business . . . . & I would place the "goodwill" of the current owner as highly important.

Good luck.