HI Everyone,
Thanks for reading this post. I am trying to buy a Franchise called Ezy DVD. Unfortunately banks will only lend 50% and then at a high interest rate.
I have about 70-90k I can use to purchase this franchise, but I need 165k (50 if the value)
I have called numerous banks and they all need propeoty as security to purchase this business.
I have two questions (1) Does anyone know a company/ person who will let me borrow more of the business?
(2) Does anyone know of someone who is looking to go a silent partner in this deal.
Thanks in advanced for the help
Jason
Hi Jason,
Sorry can’t help with the advice ur looking for but I would recommend that you check if it is suitable for you to put a ezy dvd where you are located.
For example, I chatted with an employee/manager of a ezy dvd store in a fairly busy shopping centre and asked him if it usually is busy, he replied that it usually is busy in christmas time… based on my observations, the store is relatively quiet day in day out.
Personally, I would just hate owning a franchise or a business in that matter if it didn’t do well.
NB. If you really must, i’d say have a chat with the locals and subtly bring out if this ezy dvd would do well there.
Just another thought to take on board.
btw, good luck
Hi
This is slightly off the track. I bought a franchise business 9 years ago.I did my due dillagance and was prepared to pay the asking price.
I sought advice from an accountant recommended by a friend.The accountant convinced me that I would be paying a bit too much ($25K) and he also pointed out some industry insights that I would have learned over many years.
See a good accountant and they should be able to advise on price and the risks,and perhaps finance, good luck.
hrm
Hi Jason
Not sure if this is your first business or not but i’ll take it is.Have you tried the dvd company using there bank.
banks hate franchising and thats the profitable ones.I don’t think you are going to open your mail box and get flooded with people wanting to get in to a dvd business so neither are they.
If your think it’ll work then they are your best avenue if they are reluctant then I would be if I were you.
post me a reply to [email protected]
and evaluate.here to help
It is very hard to get finance for franchises. 50% is probably a good LVR. Try Bankwest and/or NAB to see what they can offer.
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
Thanks to everyone for their responses… Yes I will definately see an accountant. There are and they are returning over 20% PBT so doing quite well.
I am definately going to also do my due dilegence and marketing to make sure the business is viable.
Thanks to everyone for their responses… Yes I will definately see an accountant. There are 72 franchises opened with more following and they are returning over 20% PBT so doing quite well.
I am definately going to also do my due dilegence and marketing to make sure the business is viable.
Thanks to everyone. I hope if anyone can help they can email
20% PBT is not much. Is this amount common with Franchises? I guess there are less risks then starting up on your own, so the expected rate must be lower.
And is this assuming you don’t work in the business and are paying someone a wage to run it?
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
Anyone,
What does PBT mean please?
hrm
Yeah what is PBT??
Cmon – we want to know?? You have piqued my interest now.
Is 20% good?
Giddohi all
pbt is (profit before tax)
and yes 20% in the norm for some,
macs is about 15% red rooster is 20%.
I can send a list if requested but not sure if you want all that info.
Couple of questions you need to ask not the pbt but your return on investment( when everything is taken out) and your involvement in that return.setup costs and do you have to use there people.
% back to master franchise amd advertising costs.
franchise term and cost of renewal.
safegardes for down turn in profits and cost of out clauses.
One of my businesses is a chicken chain as the email suggests.
For all the budding business people out there franchising is the fastest growth industry currently and more take it up per capitor in australia then in the us.
My other claim to fame is that we will be the first fast food chain to export a food chain to the us.
here to help
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