| Rick D |
08-19-2012 09:06 AM |
Quote:
Originally Posted by John510
(Post 431313)
He is not nuts at all. You will have to pay triple net, you will need a personal guarantee, and the reason he is asking to make sure you have 5 years is to check your net worth. Normally they don't ask for 5 years of rent in the bank but they WILL want a minimum net worth to make sure that you can afford the place to begin with. It is not like renting a house. If your credit is bad or you have a very small net worth then it is also common for them to make you have multiple personal guarantors on the lease. The triple net can and may have a 3% increase each year.
|
John I understand the net worth, and I asked that same question to him. If you are looking to see my assets list I can provid that, but his answer was No I have
had the last two business go out because they couldn't afford the rent when times got slow. No can flow?? I understand the personal guarantee most everyone wants that today, I'm ok with that. But he wants to see almost $400k in the back liquid?? Or he won't rent out the building. It really don't matter on that part as the place is really to big to start out any. As far a triple net Im good with that, that's just how renting goes today, was just stating what he wants :thumbsup:
Quote:
Originally Posted by John510
(Post 431313)
Were both of those bike stores super busy? Busy enough to justify a third bike store? Maybe they don't stock stuff because it doesn't sell. Bikes are not something people buy everyday.
|
It's hard to say it was a Friday in the middle of the day, so know they were not "busy" but both had a few customers in them. I understand on inventory of the bikes but not much in the way of accessory, which is where most of your day to day cash flow would come from in this type business. Also both shops were on the smaller side so their over head would not be as much as a bigger store.
Quote:
Originally Posted by John510
(Post 431313)
I can tell you how to franchise a store but you will need a successful store first. People aren't going to buy a franchise unless they can make money from it. Once you get a store you will need an attorney to do the Franchise Disclosure docs for you. This is NOT cheap. 30-50K in attorney fees (you were asking at the beginning where to get money for inventory, where would you get the attorney money?)
|
First the reason I was asking about the money for inventory was I would need what I have to get the place off the ground and be able to keep the place going for awhile, as you know it takes time for people to start to come in and for the cash to coming back in. So I was looking for what others have done with this. I should have been more specific on what I was looking for! And yes I know it takes money to make money!! :lol:
As far the franchise deal, of corse I would have to have a successful business model first, but in the industry that I'm from I could get that up and running and successful rather quickly, that's why I have been thinking of just staying the industry I have been in for the last 25 years. As far attorney go that's not an issue life long friend :yes: He doesn't charge me full retail :lol:
Oh and not two bikes shops try 6 in three towns along the bike trial :willy: Yes I would be rethinking where to start the place up if I stay on this path.
Thanks for all the info good stuff for sure. And John thank you for your in depth answers :thumbsup: |
