Evening
Just a question, I am looking at getting into a franchise and am looking to find an investor to come up with up to 250k.
Does anyone have any suggestions on where to find an investor that would be a ‘silent’ partner in the business and the debt would be paid back in approx 3 years??
Is there any forums, magazines, businesses or anything else that will be able to steer me in the right direction?
PS- I am not putting this post up to try and get anyone off the forum to contact me, so I dont consider this as advertising…
Any help would be appreciated.
Cheers [grad]
Dev* [kid]
What’s in it for the investor? If they are to invest $250,000 and then recieve $250,000 back in 3 years, it doesn’t seem like a very enticing investment. It is more of a burden really where they are actually losing money over the 3 year period.
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
Jacob
Thanks for your reply.
Whats in it for the investor? This investor (as a partner in the business) would obviously be taking some of the risk involved with the business and therefore the rewards. Given that the franchise is internationally recognised, and with a solid, detailed and accurate business plan, I would expect that this could be quite attractive to investors who may want a good return on their investment.
Dev* [kid]
….and to clarify, the investor would have no part in the day-to-day operation of the business and the contract would state the period of time in which (I) would pay back the initial debt. There is however, a possibility that there MAY be an agreement in place where the investor DOES have a part in the daily operations, in which case one party would have to ‘buy out’ the other party at an agreed time (say 3 years as initially proposed).
We are here to learn, advise and feed from each other’s experience and knowledge.
I take it you didn’t appreciate my input. lol. Sorry to offend mate.
Next time I’ll keep my 2 bobs worth to myself and pass up the opportunity to learn something new, now that would be insulting my intelligence.
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
From memory there is a magazine dedicated to Franchising available at newsagents. I dont know much about it but it might be able to point you in the right direction.
Also from what I know of personally, silent partners are fairly common in the franchising industry. Good Luck with your endeavours…G7
Hi Devil
It is possible to get loans for some of the big franchises. Maybe around 60% is possible for some like seven eleven, gloria jeans etc.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Devilcv8
Yes like Terry i must admit i was suprised you havent decided to get a lender to fund a portion of the investment.
Depending on whether the franchise is recognised by the lender i have done deals upto 70/75% of the value. Admitedly they need to be an acceptable name.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Hey Dev,
With your proposed franchise, sounds like you’ll be sweet to organise a loan if you end up without a silent partner. Go for it mate.
Cheers,
Jacob.‘Stay Happy and you’ll be Perfectly Fine’ – Jack
With the franchise I am intending on purchasing, I can borrow up to 60% from a Bank (which is what I intend on doing)… Having funds tied up elsewhere at the moment prevents me from getting the other 40% myself, which is the reason for the search for a private investor. Sorry, I should have clarified this in my original post. [laugh2]
Dev* [kid]
Dev
Sorry i think we were all under the impression that you had zero Bank funding.
60% is low dependant on the Franchise you should be able to get more than that.
To be honest unless you are going to allow the investor to be active in the business so he can see where his or her funds are going i think you are going to struggle.
Cheers Richard
[email protected]
http://www.yourstatefinance.comIP funding and US property finance
our specialityRichard Taylor | Australia's leading private lender
Richard
Thanks for your reply. When I say ‘active’ in the business, I mean this person wouldnt have to participate in the day to day activities. This sort of person may have another career and wants to simply ‘invest’ his or her money. This person would be regularly (weekly or monthly) be informed on the progress of the business and have the right to view all financial statements (of course).
60% I thought, was quite good from what I understand… Is there any lender you know offering more? The franchise is an international operation and they have around 270 locations in OZ…
Cheers
Dev* [kid]
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