help me with an investment opportunity (1 Viewer)

[belljr]

Short story. Brother in law is looking into opening a store. It would be a franchise name without owning a franchise. Not sure all the specifics. He sent me info. Anyway long story short he is looking for a "silent partner" it would be about 1/3 of the initial startup costs.

what should I look for in return? What questions to ask?

putting that money up would stretch me for a couple years.

I have no worries about my bil making this work. He is a hard worker , smart and wants to become self sufficient.

The only issue is he lives 1000 miles away.

I've never done anything like this. Tia

 

[Abraham]

Lots of hard workers go out of business every day. hTh

 

[belljr]

Lots of hard workers go out of business every day. hTh

lol trust me I know I'm just wondering what i should be looking for.

 

[Dentist]

Lots of hard workers go out of business every day. hTh

lol trust me I know I'm just wondering what i should be looking for.

you should be looking for a way to say no

 

[Binky The Doormat]

I agree with all that has been posted about the riskiness. What kind of business is it? How much related experience does he have? What did he was the competition?

Just interested but would help knowing.

 

[timschochet]

The distance is problematic. I wouldn't do it. Normally you want to know the location, the demographics, what competition there is in the area, why the franchise would succeed, what kind of sales projections, etc. But the main problem is that 1000 miles away, you can't see anything for yourself. It's just too far.

 

[timschochet]

The other point is that it's best not to do business with family members. Then if something goes wrong there won't be any lasting resentment. Your business partners should be people you trust, but it's best if it's not family or close friends.

 

[belljr]

It's a nutrition vitamin store like a gnc.only experience I know is he body build

he currently is a warehouse manager for a large furniture company.

he had flipped 2 houses on his own.

 

[Binky The Doormat]

It's a nutrition vitamin store like a gnc.only experience I know is he body build

he currently is a warehouse manager for a large furniture company.

he had flipped 2 houses on his own.

NFW.

 

[belljr]

It's a nutrition vitamin store like a gnc.only experience I know is he body build

he currently is a warehouse manager for a large furniture company.

he had flipped 2 houses on his own.

NFW.

that's how I feel but it does intrigue me on possibly missing out

 

[Buddy Ball 2K3]

It's a nutrition vitamin store like a gnc.only experience I know is he body build

he currently is a warehouse manager for a large furniture company.

he had flipped 2 houses on his own.

NFW.

/endthread

 

[[icon]]

This market (GNC/supplements) is being crushed by online guys like A1suppliments and bodybuilding.com. I would be looking to cash OUT of any B&M supplement retail space right now.. Not move into it. I have a LOT of meathead/powerlifting buddies and they are all highly price conscious and shop online.

Look at GNC's stock YTD...

Unless there is an angle/USP/opportunity here... No way I jump into this. Especially with a newbie just getting his feet wet. Sounds like a guy sick of "working for the man" and trying to find help subsidize him turning his hobby (lifting) into a career. Sorry... Just how it feels from this side.

 

[baymen]

It's a nutrition vitamin store like a gnc.only experience I know is he body build

he currently is a warehouse manager for a large furniture company.

he had flipped 2 houses on his own.

NFW.

/endthread

 

[chet]

If you lend him the money, you should get 15-20%+ in interest/year.

If you buy part of the business, it's more complicated and depends on a number of things. He will argue that since he's working there, he deserves more than your pro rata investment since it's his idea etc. I'd argue that he wouldn't be getting the store without my money. As you can see, it can lead to awkward conversations which is why it's difficult to do this type of deal with family.

 

[The Duff Man]

Stay far away from this.

If a stranger brought this to you it is a no brainer NO!

Consider whether you are analyzing this situation objectively...what about his history indicates he can run a successful startup/store?

 

[The Duff Man]

Why dont you fund him flipping more houses? Was that successful?

 

[belljr]

Why dont you fund him flipping more houses? Was that successful?

We've talked about it. Yes/no he made money. Not as much as he wanted and was very stressful since he did most of the work on his free time

 

[kutta]

I "loaned" my brother some $$ for house flipping. It just so happened that the ones he flipped with my $$ didn't do so well. It's all cool, but it puts a weird strain on the relationship, one neither one of us wants.

I would suggest staying far away. Even if you are "OK" with losing your money, it will forever change your relationship if this thing goes south.

 

[Raider Nation]

Run this by Eminence first.

 

[tommyGunZ]

Sounds like a great opportunity. If the business blows up you'll feel like a fool being on the sideline while your BIL stacks Benjamin's.

Go all in and GET PAID!

 

[johnnycakes]

It's a nutrition vitamin store like a gnc.only experience I know is he body build

he currently is a warehouse manager for a large furniture company.

he had flipped 2 houses on his own.

I agree with the above comments re "nfw" and the competition, especially online, will make profit in that industry very difficult, especially for a newcomer. The only way he could possibly make any money, or even break even, would be if he were to sell anabolic steroids under the table to other body builders. Tell him you're going to save your relationship by declining this opportunity to lose your shirt.

 

[eoMMan]

Don't do it.

 

[mr roboto]

Nope. I'm in franchise development so if you have any questions about that PM me.

I really don't get the 'franchise name without being a franchise' thing.

 

[FUBAR]

The other point is that it's best not to do business with family members. Then if something goes wrong there won't be any lasting resentment. Your business partners should be people you trust, but it's best if it's not family or close friends.

Very much this. Especially as you either wouldn't have any control and every decision you disagree with becomes a sore point if it loses money; or if you do have some sort of control, the relationship would be at risk.

In all honesty though, if my sister's husband went into business, I might help him with a loan for some stock, but only money I could afford to lose, it would be very clear up front what my rights are (probably just to get paid a certain dividend each year) and I'd only use money I could afford to lose without worrying about it (so it wouldn't be much). That's only because he's been a successful CEO of a non-profit for the past 15 years and while we have a good relationship, we don't have a close one. I trust him, but it's not like we'd be talking all the time. My sister's brother, I wouldn't give any money to because he hasn't proven himself as a leader - good dude, good worker, but not a visionary.

If you do it, you risk losing money and a relationship. If you see each other at Christmas and other holidays, or more often, either have a clear rule of not discussing the business over dinner, or prepare for a rough time.

 

[Ignoramus]

I say go "all in."

 

[johnnycakes]

Nope. I'm in franchise development so if you have any questions about that PM me.

I really don't get the 'franchise name without being a franchise' thing.

What can you tell me about a Snip-Its franchise, or similar kid's hair cutting place in that industry? I'm thinking of setting my wife up with something like that. She used to own a fashion store in China, so she's used to the hard work and she's good with kids. tia.

 

[[icon]]

I really don't get the 'franchise name without being a franchise' thing.

Vitamine Shoppe?

 

[mr roboto]

Nope. I'm in franchise development so if you have any questions about that PM me.

I really don't get the 'franchise name without being a franchise' thing.

What can you tell me about a Snip-Its franchise, or similar kid's hair cutting place in that industry? I'm thinking of setting my wife up with something like that. She used to own a fashion store in China, so she's used to the hard work and she's good with kids. tia.

I don't know much about that opportunity but what I tell people is this: if the concept is good and the leadership is solid, you have a good brand. The ultimate success of the individual unit comes down to the business owner. No franchise runs itself. Our best franchisees could run a restaurant or manufacturing plant and be successful. It's basic business skills that make an operator successful. Read Item 6 and 7, 1 and 2 in the FDD closely (startup costs and leadership/any financial bankruptcy etc). Item 19 is where they disclose financial performance. If they dont have one that's not necessarily bad (we don't either because we are younger). When you speak with franchisees ask them if they would do it again and if the results matched their expectations.

 

[mr roboto]

I really don't get the 'franchise name without being a franchise' thing.

Vitamine Shoppe?

The sentence makes no sense at all.

 

[Otis]

Sounds like a pretty terrible idea.

 

[belljr]

Pm sent roboto

 

[chet]

Do you even lift, bro?

 

[BobbyLayne]

Should probably change the title to "need help with sizeable gift to family member".

Your BIL may end up being successful. It's not beyond the realm of possible outcomes. But quite honestly, I think a good starting point would be "OK, worst case, this thing fails in 2 years and I'm out $X". Not being snarky or mean here, I'm just saying the odds are pretty good this doesn't turn out exactly as planned.

How would that make you feel? How would that impact your relationship with your BIL? I think it makes sense to carefully consider all possible outcomes.

I probably missed this, but is this your sister's husband or your wife's brother.

Anyway, good luck.

 

[johnnycakes]

Nope. I'm in franchise development so if you have any questions about that PM me.

I really don't get the 'franchise name without being a franchise' thing.

What can you tell me about a Snip-Its franchise, or similar kid's hair cutting place in that industry? I'm thinking of setting my wife up with something like that. She used to own a fashion store in China, so she's used to the hard work and she's good with kids. tia.

I don't know much about that opportunity but what I tell people is this: if the concept is good and the leadership is solid, you have a good brand. The ultimate success of the individual unit comes down to the business owner. No franchise runs itself. Our best franchisees could run a restaurant or manufacturing plant and be successful. It's basic business skills that make an operator successful.Read Item 6 and 7, 1 and 2 in the FDD closely (startup costs and leadership/any financial bankruptcy etc). Item 19 is where they disclose financial performance. If they dont have one that's not necessarily bad (we don't either because we are younger). When you speak with franchisees ask them if they would do it again and if the results matched their expectations.

Thanks... the bit about the FDD was particularly helpful.

 

[johnnycakes]

Pm sent roboto

What did it say?

 

[belljr]

Should probably change the title to "need help with sizeable gift to family member".

Your BIL may end up being successful. It's not beyond the realm of possible outcomes. But quite honestly, I think a good starting point would be "OK, worst case, this thing fails in 2 years and I'm out $X". Not being snarky or mean here, I'm just saying the odds are pretty good this doesn't turn out exactly as planned.

How would that make you feel? How would that impact your relationship with your BIL? I think it makes sense to carefully consider all possible outcomes.

I probably missed this, but is this your sister's husband or your wife's brother.

Anyway, good luck.

My wife's sister and her husband. I have no doubt he will do everything in his power to succeed but I know that doesn't mean he will. He is a go getter for sure. Anyway I may not have described it right but it was brought up last night for the first time. His best friend had to back out last minute. I have not even begun with discussing what does my money get me etc etc because I had no idea what would be "normal"

 

[timschochet]

Sounds like you're eager to do this despite all the advice you've been getting to the contrary. If that is the case, good luck and I hope it works out against the odds.

 

[belljr]

Sounds like you're eager to do this despite all the advice you've been getting to the contrary. If that is the case, good luck and I hope it works out against the odds.

nope not at all. I have had approximately 4 hours to take it in.I haven't even spoken to him yet on what my money would mean. I did find out he is short on liquid assets. The bank for his loan needs 40% he has about 30%.

I'm most likely going to pass but just gathering info as this is a world I'm not familiar

 

[chet]

Should probably change the title to "need help with sizeable gift to family member".

Your BIL may end up being successful. It's not beyond the realm of possible outcomes. But quite honestly, I think a good starting point would be "OK, worst case, this thing fails in 2 years and I'm out $X". Not being snarky or mean here, I'm just saying the odds are pretty good this doesn't turn out exactly as planned.

How would that make you feel? How would that impact your relationship with your BIL? I think it makes sense to carefully consider all possible outcomes.

I probably missed this, but is this your sister's husband or your wife's brother.

Anyway, good luck.

My wife's sister and her husband. I have no doubt he will do everything in his power to succeed but I know that doesn't mean he will. He is a go getter for sure. Anyway I may not have described it right but it was brought up last night for the first time. His best friend had to back out last minute. I have not even begun with discussing what does my money get me etc etc because I had no idea what would be "normal"

What do you think is fair? Also, are you talking a loan or an equity stake?

 

[belljr]

Should probably change the title to "need help with sizeable gift to family member".

Your BIL may end up being successful. It's not beyond the realm of possible outcomes. But quite honestly, I think a good starting point would be "OK, worst case, this thing fails in 2 years and I'm out $X". Not being snarky or mean here, I'm just saying the odds are pretty good this doesn't turn out exactly as planned.

How would that make you feel? How would that impact your relationship with your BIL? I think it makes sense to carefully consider all possible outcomes.

I probably missed this, but is this your sister's husband or your wife's brother.

Anyway, good luck.

My wife's sister and her husband. I have no doubt he will do everything in his power to succeed but I know that doesn't mean he will. He is a go getter for sure. Anyway I may not have described it right but it was brought up last night for the first time. His best friend had to back out last minute. I have not even begun with discussing what does my money get me etc etc because I had no idea what would be "normal"

What do you think is fair? Also, are you talking a loan or an equity stake?

posted above

 

[chet]

Should probably change the title to "need help with sizeable gift to family member".

Your BIL may end up being successful. It's not beyond the realm of possible outcomes. But quite honestly, I think a good starting point would be "OK, worst case, this thing fails in 2 years and I'm out $X". Not being snarky or mean here, I'm just saying the odds are pretty good this doesn't turn out exactly as planned.

How would that make you feel? How would that impact your relationship with your BIL? I think it makes sense to carefully consider all possible outcomes.

I probably missed this, but is this your sister's husband or your wife's brother.

Anyway, good luck.

My wife's sister and her husband. I have no doubt he will do everything in his power to succeed but I know that doesn't mean he will. He is a go getter for sure. Anyway I may not have described it right but it was brought up last night for the first time. His best friend had to back out last minute. I have not even begun with discussing what does my money get me etc etc because I had no idea what would be "normal"

What do you think is fair? Also, are you talking a loan or an equity stake?

posted above

You'd better pass.

 

[Keerock]

Should probably change the title to "need help with sizeable gift to family member".

Your BIL may end up being successful. It's not beyond the realm of possible outcomes. But quite honestly, I think a good starting point would be "OK, worst case, this thing fails in 2 years and I'm out $X". Not being snarky or mean here, I'm just saying the odds are pretty good this doesn't turn out exactly as planned.

How would that make you feel? How would that impact your relationship with your BIL? I think it makes sense to carefully consider all possible outcomes.

I probably missed this, but is this your sister's husband or your wife's brother.

Anyway, good luck.

My wife's sister and her husband. I have no doubt he will do everything in his power to succeed but I know that doesn't mean he will. He is a go getter for sure. Anyway I may not have described it right but it was brought up last night for the first time. His best friend had to back out last minute. I have not even begun with discussing what does my money get me etc etc because I had no idea what would be "normal"

Money and family don't mix... this is a bad idea. In addition, and I'm not jinxing you or your SIL, but there are several ways that this guy could no longer be your BIL... which makes this an even worse idea.

 

[johnnycakes]

Should probably change the title to "need help with sizeable gift to family member".

Your BIL may end up being successful. It's not beyond the realm of possible outcomes. But quite honestly, I think a good starting point would be "OK, worst case, this thing fails in 2 years and I'm out $X". Not being snarky or mean here, I'm just saying the odds are pretty good this doesn't turn out exactly as planned.

How would that make you feel? How would that impact your relationship with your BIL? I think it makes sense to carefully consider all possible outcomes.

I probably missed this, but is this your sister's husband or your wife's brother.

Anyway, good luck.

My wife's sister and her husband. I have no doubt he will do everything in his power to succeed but I know that doesn't mean he will. He is a go getter for sure. Anyway I may not have described it right but it was brought up last night for the first time. His best friend had to back out last minute. I have not even begun with discussing what does my money get me etc etc because I had no idea what would be "normal"

What do you think is fair? Also, are you talking a loan or an equity stake?

posted above

You'd better pass.

I'd go with the run.

 

[Keerock]

Should probably change the title to "need help with sizeable gift to family member".

Your BIL may end up being successful. It's not beyond the realm of possible outcomes. But quite honestly, I think a good starting point would be "OK, worst case, this thing fails in 2 years and I'm out $X". Not being snarky or mean here, I'm just saying the odds are pretty good this doesn't turn out exactly as planned.

How would that make you feel? How would that impact your relationship with your BIL? I think it makes sense to carefully consider all possible outcomes.

I probably missed this, but is this your sister's husband or your wife's brother.

Anyway, good luck.

My wife's sister and her husband. I have no doubt he will do everything in his power to succeed but I know that doesn't mean he will. He is a go getter for sure. Anyway I may not have described it right but it was brought up last night for the first time. His best friend had to back out last minute. I have not even begun with discussing what does my money get me etc etc because I had no idea what would be "normal"

What do you think is fair? Also, are you talking a loan or an equity stake?

posted above

You'd better pass.

I'd go with the run.

punt

 

[Henry Ford]

Never invest in a business you can't go watch in operation.

 

[chet]

Never invest in a business you can't go watch in operation.

 

[belljr]

I would definitely be in if he flipped another house.

this not so much

guess I'll stick with the lottery

 

[Jobber]

Should probably change the title to "need help with sizeable gift to family member".

Your BIL may end up being successful. It's not beyond the realm of possible outcomes. But quite honestly, I think a good starting point would be "OK, worst case, this thing fails in 2 years and I'm out $X". Not being snarky or mean here, I'm just saying the odds are pretty good this doesn't turn out exactly as planned.

How would that make you feel? How would that impact your relationship with your BIL? I think it makes sense to carefully consider all possible outcomes.

I probably missed this, but is this your sister's husband or your wife's brother.

Anyway, good luck.

My wife's sister and her husband. I have no doubt he will do everything in his power to succeed but I know that doesn't mean he will. He is a go getter for sure. Anyway I may not have described it right but it was brought up last night for the first time. His best friend had to back out last minute. I have not even begun with discussing what does my money get me etc etc because I had no idea what would be "normal"

That's because his friend was given good advice to pass on this "opportunity" at the weightliftingguys.com forums.

 

[FUBAR]

Never invest in a business you can't go watch in operation.

meaning - never put money in a small cap stock index because you can't watch all the companies in operation?

 

[DaVinci]

Nope. I'm in franchise development so if you have any questions about that PM me.

I really don't get the 'franchise name without being a franchise' thing.

See, they're McDonald's... I'm McDowell's. They got the Golden Arches, mine is the Golden Arcs. They got the Big Mac, I got the Big Mick. We both got two all-beef patties, special sauce, lettuce, cheese, pickles and onions, but their buns have sesame seeds. My buns have no seeds.